The luxury real estate market in California should be expecting a significant rebound in 2024 following the colder period if felt in late 2022 and into 2023. There are a few key factors that may influence more activity and an overall positive trend within the luxury real estate market in Malibu in 2024 including lower interest rates, lower inflation, and a surging economy all creating a hotter market making buying and selling a home much more appealing for buyers and sellers in the 2024 Malibu real estate market.
The Cold Winter of Malibu Real Estate:
The Malibu real estate market has been historically defined by robust growth and an increase in the median home price against a landscape of high demand, given the smaller inventory of real estate listings in Malibu CA. This was especially clear during COVID, when there was a massive surge in the Malibu real estate market as buyers were more easily able to afford some of the higher-priced real estate given the lower interest rates. However, from 2022 through 2023 when interest rates were raised to balance inflation and correct the overall market, the Malibu real estate market saw one of the coldest periods it has seen since the 2008 crash. Thankfully, in Q4 2023 the market recovered quickly, and the new year started with a bang. Recent data as of July 2023 has shown a promising upturn with the statewide median home price increasing consistently over the three months following (all sources used are provided at the bottom of this article).
A Bright Outlook for the Future:
According to the California Association of Realtors, spring is on the horizon. The median home prices in California are expected to rise by 6.2% reaching $860,300 in 2024. This trend is expected to especially impact the luxury real estate market in Malibu due to its high demand and unique appeal. In 2024 expect to see a large increase in buyers looking for Malibu real estate as mortgage rates continue to decline throughout the year.
Supply and Demand:
Jennifer Branchini, the President of the California Association of Realtors hopes for a more balanced market in 2024 with more homes on the market and easier entry for new buyers. The lower costs of borrowing, paired with more homes coming onto the market, show a trend for revitalization of the California real estate market in 2024. However, despite an anticipated 10-20% increase in inventory, the number of homes on the market are still expected to be below average. This is especially true in small luxury communities like Malibu where demand is so high and inventory is low so expect an increase in prices for the year of 2024. Prices won't soar to the levels they were during COVID as the interest rates will still remain higher than they were then, but with the lower interest rates compared to 2022 and 2023, prices will increase from the following years.
Mortgage Rates:
Jordan Levine, the Vice President and Chief Economist from the C.A.R predicts that the Federal Reserve's response to a softening economy in 2024 will lead to a more lenient monetary policy and by effect, lower mortgage rates. Optomistically, by the end of 2024, the 30-year fixed mortgage rate could be as low as the mid 5% range. Mark Fleming from First American Title and Jessica Lautz from the N.A.R. foresee the lower mortgage rates to be especially beneficial for luxury real estate markets like Malibu California as easing the borrowing cost will make these much sought-after locations much more affordable.
Conclusion:
The Malibu real estate market is set for a revitalization in 2024, buoyed by favorable mortgage rates, an increase in housing supply, and a stabilizing economy. This will create a much anticipated trend towards favorable market conditions for both buyers and sellers, signaling a return to the dynamic and competitive market California is renowned for. However, with interest rates lowering and more people looking for homes, Malibu will be a much sought after location with home prices most likely rising because of the low inventory and high demand.
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Sources:
California Luxury Real Estate for 2024 and Beyond – What to Expect