Continuous market upturn in prime locations
Santa Monica and Malibu rank amongst the most glamorous residential locations in the world. The market is characterised by very prestigious properties. Many celebrities from the worlds of sport and business, and notably film actors from neighbouring Hollywood, own a residence here. Particularly high in demand are the limited locations directly on the Pacific, which can reach prices of over 50 million euros (approx. 42 million pounds).
The premium locations in Santa Monica include Ocean Avenue, Montana Avenue and the directly adjoining neighbourhoods to the north and the immediate south, as well as the Santa Monica Mountains. For homes with six bedrooms or more, buyers here have to part on average with around 5.1 million euros (approx. 4.3 million pounds). In neighbouring Malibu, the average prices for top properties in prime locations are now in the double-digit millions bracket. Properties on Broadbeach Road, Malibu Colony, Carbon Beach and the Encinal Bluffs are especially desirable there. Proximity to the beach and spectacular sea views are an important purchase criterion for most buyers in Malibu and Santa Monica. In addition to exclusive detached family homes, condominiums are also extremely popular, especially in Santa Monica.
The real estate market in Santa Monica is in a continuous state of growth, and has long since reached its pre-crisis high once again after a temporary phase of stagnation, in some cases significantly exceeding this pre-crisis high. The strong level of demand for exclusive real estate is seeing home prices rise, as well as confidence in investing in secure assets such as property. Compared to the previous year, prices in all property categories have risen considerably by 10 to 15 percent.
In Malibu, more than fifteen properties have sold for prices above 7.4 million euros (approx. 6.3 million pounds) over the last 18 months. This includes the highest sale of this year at 55.4 million euros (approx. 46.9 million pounds) and at least five sales over 12.6 million euros (approx. 10.7 million pounds). The average sale price for homes in prime locations in Malibu is up approximately 22 percent year-to-date as compared to the annual average in 2012.
Engel & Völkers has observed the greatest potential for appreciation in value with luxury properties in locations close to the beach. The ratio of foreign buyers in the region is around 40 percent. The strongest international buyer groups include Europeans, Asians, and South Americans.
Due to the high level of demand and the very low level of new developments in both regions, the time-to-market for homes has decreased significantly. Top properties in prime locations are usually on the market for less than 30 days in fact. In good locations, the average time-to-market is one to two months. The surrounding districts such as Pacific Palisades, Venice Beach, and Marina del Rey are also profiting from this high level of demand, as they are increasingly forming the focus of attention for those buyers who do not strike it lucky in Santa Monica and Malibu.