Is Now The Time To Buy Your Malibu Home? Deeper Research Shows Malibu Market Is Least Vulnerable

by ritasimpson on May 14, 2012

in How's The Market

In today’s Wall Street Journal Report on “Squaring Off On Personal Finance” one of the questions debated by experts was: Is it time to Buy, or  will prices continue to slide? Opposing opinions are correct for different markets. Here is why It’s time to Buy property in Malibu:

On one side ,some argue that homes are more affordable than they have been in decades due to the adjusted prices and the historically very low-interest rates, with mortgage payments lower than the rents the homes now command in the market.

On the other side, pessimists insist that prices will continue falling as more foreclosures are added to the inventory of homes for sale. The problem with the question is that the correct answer varies by location! The conclusions for Malibu for example, might vary wildly from the overall national picture portrayed in these debates.

Consider Malibu, a small town, with less than 14,000 inhabitants. and 322 homes currently on the market and 103 homes under stress, 67 of which have already been foreclosed on. The potential impact that the additional 36 homes (a mere 11% potential increase in Malibu inventory, now in the Pre-foreclosure state) could have on the Malibu Real Estate prices, if they actually get foreclosed on, should be far less than the risk posed by the shadow inventory (pre-foreclosure properties and foreclosed properties off the market) in places like Riverside, where the number of properties on the market is 1,631  with 874 distressed properties. If the 874 properties are added to the inventory in the next few months that would increase their inventory  by 54%. That is the BIG difference!

Therefore, depending on the city you are interested in buying, make sure you understand the relative impact the foreclosure volume may have on that specific market’s inventory. Generalities cannot help you. If it’s relatively low, prices will not be as vulnerable as the pessimists predict and if you have been thinking of buying your Malibu home and take advantage of the unique opportunities the Malibu Real Estate market offers you today, or else you may hear yourself saying: ‘ I should have, when I could!”

Here is a glimpse to some selected Markets for the Comparative RISK:

City Active Listings Foreclosed Properties Potential Foreclosures Potential increase of listings on the Market by addition of Potential Foreclosures
Los Angeles 12,902 4,782 2,467 19%
Pacific Palisades 130 28 22 16%
Malibu 322 67 36 11%
Beverly Hills 264 74 48 18%
Santa Monica 179 86 44 24%
Newport Beach 766 192 70 11%
Riverside 1,631 1,380 874 54%
Palmdale 1,390 942 629 45%
San Diego 7,521 2,487 1,815 24%






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