In its early stages of development, the Los Angeles beach town of Malibu has always been reserved for the rich and famous.
But in the past few years alone, even millionaires have now been left out — and the community has become a staple of just the ultra-rich.
Larry Ellison, the tech titan who made significant investments in the city nearly three decades ago, started the Malibu trend of pushing the region’s real estate values through the roof.
Combined with a raging coronavirus pandemic, the uncrowded beaches and relaxed vibe of the surf town has sent Malibu’s house prices soaring — attracting the wealthiest of the rich.
In the past year alone, venture capitalist Marc Andreessen and his wife, Laura Arrillaga-Andreessen, have purchased three separate Malibu estates for a total of $255.5 million.
Rapper Kanye West paid a whopping $57.3 million for a sculptural concrete house designed by Japanese architect Tadao Ando.
In 2019, WhatsApp co-founder Jan Koum bought two adjacent buildings in the Paradise Cove area for a total of $187 million.
The skyrocketing prices can be attributed to a low supply for which few have the resources to outbid others, causing a dramatic change in what was once known as a tight-knit community.
In an interview with the Wall Street Journal, Beverly Hills native Andy Stern revealed the changes he’s seen since he first moved to the city to raise his young family.
“There’s less of a sense of local community because the people aren’t here,” Stern, 69, a two-time mayor of Malibu and real estate agent of Coldwell Banker Realty, told The Journal.
Stern recalled fond memories of block parties with children playing in the street together. Now, he explained, he barely sees his neighbors — who are rarely there all year round.
The families that once lived in the area have been largely replaced by celebrities and billionaires, including Chicago-born real estate billionaire Sam Zell, Miami Heat president Pat Riley and Torstein Hagen, the Norwegian billionaire founder of Viking Cruises.
Many of his new neighbors own three to four properties in the area and use these homes as getaways.
The Malibu market ” took off as a rocket ship,” Stern added.
And despite long-time residents adjusting to many of the celebrities and billionaires who move there, they say they are still shocked by the latest round of buoyant home sales, which old locals are now claiming is losing its bohemian character. that lured to the city in the first place.
“Malibu always had a typical village feel, even if there were rich or famous people here too,” lifelong Malibu resident Mikke Pierson, 62, and also a former mayor, told The Journal. “But it had much more of a working-class feel and many residents had small horse ranches. They are now almost completely gone.”
Pierson added that the prices paid for these homes are “out of control”.
The number of home sales that cost $5 million and more than rose to 81 last year — up from 39 in 2019, according to valuation firm Miller Samuel. In the first quarter, the median price for a single-family home was $6.99 million, compared to $4.25 million in the same period of 2021, according to The Journal.
Meanwhile, Malibu’s population stands at 10,429 as of July 1, 2021 — a 17.5% drop from April 2010, according to US census data.
While some of the population decline can be attributed to the Woolsey fire in 2018 that destroyed several homes, it is also attributed to the fact that many homes are owned by part-time residents.
According to a report from the city of Malibu, there were about 2,500 children in public schools in 2003-2004. This year there were less than 1,100 students.
Stern explained to The Journal that he believes Malibu’s best-practice privacy practices lure these business magnates and high-net-worth celebrities.
“People you normally see on TV are all dressed up, here they don’t shave or comb their hair,” Stern said. “People can be themselves a bit more here.”
Meanwhile, Ellison — worth an estimated $97.6 billion — isn’t just leaving a footprint in Malibu. Most recently, Oracle’s founder donated a record $173 million for a Palm Beach spread.
And for his Hawaii home base, Ellison signed more than $300 million for 90 acres on the Hawaiian island of Lanai.