In The Malibu Real Estate Market, Strategic Buyers Know When To Strike
Right now, the Malibu real estate market is experiencing a rare moment, one that won’t be here forever. Fire related disruptions, the PCH closure, and homes on trend to stay longer on the market in 2025 may lead buyers to believe that the Malibu real estate market is slowing down. However, these short term setbacks reveal a more powerful truth, especially for buyers: more leverage, more inventory, and the perfect storm for a buyers market. Those willing to take advantage of the market conditions in Malibu right now are in the best possible position for investing in Malibu luxury real estate.
The Numbers Don't Lie, This Is A Buyers Market
(Home Available For Purchase Here)
In early 2025, the Malibu real estate market experienced a considerably slower market than it has since the most recent post covid years. February brought only 2 closed inland sales (compared to 11 in 2024), and while the activity beachside has seen a slight uptrend in terms of activity, the overall volume beachside remains low. At the same time, inland inventory jumped 22%, while beachfront listings dropped due to fire damage. Now what does this mean for buyers?
- Homes are sitting longer: The average is 93 days inland and 113 days for coastal homes.
- Buyers have more negotiating room: Sellers are getting around 93% on their listing price. (However for sellers, well prepared and correctly priced homes still attract strong offers)
- Inland buyers have more options than they've had in years.
This is an ideal buyers market, and the savy investor will know that now more than ever is a perfect time to invest in Malibu real estate. To find out more about the current market conditions in Malibu, check out our article here.
Temporary Market Conditions Create Permanent Opportunities For Malibu Real Estate Investment.
With the global economy in flux right now it is easy to assume the slowdown in the Malibu real estate market is a cause of economic conditions. However Malibu is a luxury market, and the trend with luxury real estate is to remain relatively stable despite market conditions.
The truth is that the issue is logistical. Road closures and fire damage have made it physically difficult to access Malibu, schedule showings, and attend open houses. But these are short term temporary obstacles, and a real estate investment is permanent. Once full access returns to Malibu, so too will the competition.
That means for buyers there is a narrow window to act. While prices are down, and competition with other buyers is light, motivated sellers will be open to negotiation.
Luxury Real Estate: Resilience, Scarcity, and High Demand:
(Home Available For Purchase Here)
Malibu isn't just a pretty location, it's a prime global investment hub. Luxury properties in Malibu benefit from decades of steady appreciation, prestige, and global desirability. According to Knight Frank's Prime Global Cities Index, Cities like LA saw luxury property prices rise 14% in a single year during 2021. While this was attributed to the mass migration to Malibu during and post covid, Malibu home prices remain stable and saw a 3.4% price increase during the last quarter of 2024. Malibu properties are not just homes, you are also buying a piece of art. Many of these properties are architectural masterpieces built by notable architects creating a strong foundation for appreciation and investment. Also Malibu stands out from other luxury markets in terms of its location. It is situated by the coast with expansive nature preserves in the Santa Monica Mountains. It is also only a 30 minute drive to Los Angeles making it the perfect spot for working at home or commuting to Silicon Beach.
Here are the key factors to consider why Malibu luxury real estate has historically proven to be a strong investment:
- It out performs lower end markets during downturns
- It retains its value thanks to exclusivity
- Homes appreciate steadily overtime, especially in land/inventory limited regions
In other words: the fundamentals are strong. This dip in pricing and competition isn’t a real estate market slowdown, it’s a short momentary pause (largely due to logistics and not the market).
All Roads Lead to Longterm Gains:
(Home Available For Purchase Here)
Even if you're not planning on living in Malibu full time, investment real estate comes with many benifits and is always a strong and viable option when deciding to purchase a home.
- Rental Income: Malibu homes, especially those near the beach, are ideal for premium short-term rentals, with strong seasonal demand and limited competition. In extreme cases, some homes in Malibu even rent for 350K a month (here for more information).
- Luxury Flipping: With homes sitting longer and selling under list price, buyers can acquire and upgrade undervalued properties, then re-enter the market when demand rebounds. This is especially true on homes inland or landside.
- Buy-and-hold: Malibu homes offer lasting lifestyle value alongside long-term appreciation. Many investors choose properties they can enjoy now, rent occasionally, and sell years later for significantly more.
While making an investment can be a huge decision for most people, here's our advice for the cautious investor. If there is one word to describe luxury real estate its "stability". Unlike mass-market properties that rise and fall with economic trends, Malibu homes hold their value better because they are irreplaceable. There's only so much coastline, and even less of it zoned for dream homes.
Malibu As A Tax Haven
(Home Available For Purchase Here)
Here’s a little-known secret with big implications: Malibu is not subject to Los Angeles’ mansion tax under Measure ULA. While LA city sellers are on the hook for up to 5.5% in transfer taxes on homes over $5.15 million, Malibu Real Estate is tax-free in this regard.
That means:
- A $10M home in LA = $550,000 in tax
- The same home in Malibu = $0
This exemption makes Malibu one of the most financially strategic places to purchase high-end property in Southern California. Especially for buyers already eyeing properties in Santa Monica, Brentwood, or Beverly Hills.
In a place where homes routinely sell for $8M–$14M, any dip in prices or surge in negotiation room is an opportunity, not a warning. The fires will pass. The roads will reopen. And when they do, Malibu's luxury market will snap back quickly, as it has in the past. So if you’ve ever considered buying in Malibu, now is not the time to wait. It's the time to act.
Whether you're searching for a family retreat, a smart investment, or a legacy property, we're here to help you. At Shen Realty, with over 20 years of experience specializing in Malibu Real Estate, we promise to offer you the services of the best real estate agent in Malibu. To find out more about the Malibu real estate market or wish to contact us for a consultation, please reach out here.