At its early developmental stages, the Los Angeles beach town of Malibu has always been reserved for the rich and famous.
But in the last few years alone, even millionaires have now been shut out — and the community has become a staple for the ultra-rich only.
Larry Ellison, the tech titan who has invested significantly in the town since nearly three decades ago, started the Malibu trend of sending area property value through the roof.
Combined with a raging coronavirus pandemic, the uncrowded beaches and the relaxed surf-town vibe have sent Malibu home prices soaring — luring in the wealthiest of wealthiest.
In the past year alone, venture capitalist Marc Andreessen and his wife, Laura Arrillaga-Andreessen, have purchased three separate Malibu estates for a combined $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 purchased two neighboring compounds in the Paradise Cove area for a total of $187 million.
The sky-high prices can be attributed to low inventory that only few have the sources to outbid others for, causing a dramatic change to what was once known as a close-knit community.
In an interview with the Wall Street Journal, Beverly Hills native Andy Stern revealed the changes he has witnessed from when he first moved to the town 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 Malibu mayor and Coldwell Banker Realty real-estate agent, told The Journal.
Stern recalled fond memories of block parties with children out in the streets playing together. Now, he explained, he barely sees his neighbors — who are rarely there throughout the year.
The families that once lived in the neighborhood have largely been replaced by celebrities and billionaires that also include Chicago-born real-estate billionaire Sam Zell, Miami Heat President Pat Riley and Torstein Hagen, the Norwegian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 like a rocket ship,” Stern added.
And despite longtime residents adapting to many of the celebrities and billionaires moving in, they say they are still shocked at the latest round of lavish home sales, which longtime locals now argue is allowing the neighborhood to lose its Bohemian character that lured to the town in the first place.
“Malibu always had sort of a typical-small-town vibe, even though there were wealthy or famous people here as well,” lifelong Malibu resident Mikke Pierson, 62, and also a former mayor, told The Journal. “But it had much more of a blue-collar feeling and a lot of the residents had small horse ranches. Now, those are almost entirely gone.”
Pierson added that the prices being paid for these homes are “out of control high.”
The number of home sales costing $5 million and over swelled to 81 last year — up from 39 in 2019, according to appraisal firm Miller Samuel. In the first quarter, the median price for a single-family home reached $6.99 million, compared with $4.25 million during 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 the US census data.
While some of the population decreases can be attributed to the 2018 Woolsey fire that destroyed several houses, it is also attributed to many homes being owned by part-time residents.
In a report by the city of Malibu, children in public schools consisted of around 2,500 back in 2003-2004. This year, there were fewer than 1,100 students.
Stern explained to The Journal that Malibu’s optimal privacy measures are what he believes lure these business moguls and high-net-worth celebrities.
“People who you normally see on TV all dressed up, here they don’t shave or comb their hair,” Stern said. “People can be themselves a little bit more here.”
Meanwhile, Ellison — worth an estimated $97.6 billion — isn’t only leaving a footprint in Malibu. Most recently, the Oracle founder shelled out a record-breaking $173 million for a Palm Beach spread.
And for his home base in Hawaii, Ellison signed over $300 million for 90 acres on the Hawaiian island of Lanai.