Why Oceanfront Estates in Malibu are Inflation and Recession Proof

Why Oceanfront Estates in Malibu are Inflation and Recession Proof

  • Mark Gruskin
  • 01/2/23

Given the current state of the economy and the volatility in the housing market, many people are wondering how safe their real estate investments are. Oceanfront properties in Malibu and the surrounding area feature several qualities that make them exceptionally resistant to economic issues, such as inflation and recession. Here are a few reasons from expert Realtor® Mark Gruskin why you should feel comfortable with the value of your Malibu home—both now and in the future.

1. Homes are hard assets

A hard asset is something that is tangible and has visible value. Hard assets are different from other investments, such as stocks. These types of assets are better equipped to handle market volatility and are more likely to maintain their worth over time because their value is easy to see. They are easier to sell for this same reason. Soft assets (like stocks) are more susceptible to market variances. Their value can sometimes change by the day. Home values are much different. While you might have to wait months or years before you see your home value move significantly in one direction or the other, patience is a virtue that will pay off immensely if you let the investment grow over time.

2. The market always bounces back

SOLD! 22514 Pacific Coast Hwy., Malibu. Offered at $20,750,000. Photo courtesy of Mark Gruskin.
Home values have risen faster than inflation over the past 100 years. This means that home prices have not only stayed consistent with inflation, but they have increased in value even after you take inflation into account. This is a crucial point to remember during a time when a recession appears likely. If you look back over over the past 100 years, you’ll notice that the market has survived through multiple significant recessions or economic depressions. One such issue was the Great Depression in the late 1920s and the early 1930s. Another example is the market crash of 2008. Home prices may have dipped during these times, but things evened out in the long run, and home prices began to rise again.

3. There will always be a demand for oceanfront property

SOLD! 25006 Malibu Rd. Offered at $11,995,000
The conversation about the value of oceanfront properties in a premier location is unique. In some ways, demand is affected by the overall state of the market. In other ways, it’s a different conversation entirely.

Across the board, Malibu is a highly desirable locale, as real estate seekers will always want to live in Malibu and be near the beach, with the sandy shores easily accessible. There will always be qualified buyers who emerge and have an interest in investing in these types of properties. The values of homes may fluctuate based on current market trends and the overall state of the economy, but it’s highly unlikely that prices would ever plummet or that demand would be minimized or eliminated completely. Because of this, investing in oceanfront estates is a reliable way to strengthen your portfolio for long term future gain.

4. Interest rates won’t stay high forever

In 2020, interest rates dropped close to 2% across the nation. Many potential buyers took advantage of the opportunity to secure loans at these unprecedented lower rates, and the market thrived as a result. Things have changed in recent months, as interest rates are hovering around 7%. This has caused demand for homes to cool and is one reason why a recession seems likely for both the national real estate market as well as the economy as a whole. While this has many people concerned, it’s important to remember that history shows us that interest rates fluctuate and are likely to return to lower levels. Furthermore, the industry has demonstrated an ability to tread water through these difficult seasons and come out better than what it was before.

5. People always need places to live

As rampant inflation continues to lead to a higher cost of living in most places, many people may begin to cut unnecessary costs from their budget in an effort to save expenses. Housing isn’t one of those expenses, though, because you will always need a place to live. Even if home prices continue to rise and the recession that experts are predicting takes place, there will always be real estate seekers looking for properties especially in luxury markets like Malibu. In addition, life changes and important new milestones, such as a growing family or a new job, death or divorce don’t always offer the luxury of waiting for the market to pick up.

6. You can take steps to add to your home’s value

If you want to ensure that your investment is savvy and future-proof, there are several things you can do to your home that will help it grow in value over time. For example, one widespread concern among many of today’s homebuyers is energy efficiency. When it comes time to sell, prospective buyers may want to know how much you have spent on energy and utility costs over the past year. Adding energy-efficient features, like double-paned windows, smart thermostats, new window shades, and more, is an excellent opportunity for you to improve your home while also taking on projects that will save you money during the time when you occupy your property. You can also upgrade your appliances to newer models that don’t require as much energy to operate, and of course solar power is a great long term option as well. 

Ready to get started?

If you are interested in investing in the oceanfront real estate scene and enjoying all the benefits and lifestyle it affords, you want to work with only the best. Mark Gruskin is an expert when it comes to Malibu, from Carbon Beach real estate to Point Dume to Broad Beach and beyond.  Mark works hard to exceed the expectations of buyers and sellers throughout this gorgeous area. He has received numerous awards for his work and is frequently recognized as one of the top-producing agents in the entire country. He would love to partner with you when you’re ready to begin touring beach front and ocean view when your ready. Call today to schedule an appointment.

*Header photo 27352 Pacific Coast Hwy., Malibu SOLD! Offered at $13,995,000. Photo courtesy of Mark Gruskin

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My goal is to give every client insightful and intelligent advice, get them the best value possible, and serve professionally and with the utmost integrity. If Malibu is where you live or would like to live, then give me a call and let’s talk real estate.

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