Billionaires are increasingly gravitating toward the luxury real estate market in Southern California’s beach cities, particularly in Malibu, despite the skyrocketing property prices and escalating risks associated with climate disasters. This trend isn’t limited to Malibu; it’s also evident in coastal hotspots like Palm Beach and Miami.

Industry experts indicate that these ultra-wealthy individuals are largely insulated from the usual obstacles that hinder home buying. They can invest in top-tier disaster protection and frequently own multiple residences to escape severe weather conditions.

A recent report from Realtor.com highlights some remarkable transactions: James Jannard, the founder of Oakley, set a record by selling his Malibu mansion for an astonishing $210 million in June. Meanwhile, supermodel Karlie Kloss and her husband, Joshua Kushner, acquired one of Malibu’s most renowned beachfront properties for nearly $30 million. Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs, expanded her Malibu estate portfolio with a $94 million waterfront acquisition. Additionally, music icons Jay-Z and Beyoncé purchased a Malibu mansion for $190 million the previous year.

These affluent buyers often emphasize quick occupancy, showing minimal interest in waiting for renovations. They are eager to settle into their new homes without delay. When it comes to worries about natural disasters affecting property values, experts contend that billionaires remain untroubled; they can simply fly to another residence to dodge hurricane or flood seasons or retreat to northern summer homes during the heat.

In contrast to the challenges faced by average buyers due to soaring home prices and elevated mortgage rates, billionaires have the advantage of leveraging their assets to obtain favorable loan rates or even paying in cash, thereby avoiding the pinch of high mortgage costs. Many of the ultra-rich view the current economic instability as a prime opportunity to secure prime real estate deals, thanks to their significant cash reserves.

Meanwhile, as wealthy buyers rush to acquire luxury homes, everyday people’s purchasing power has been diminishing since last year, resulting in price declines in some areas. A June report from Realtor.com revealed that, among the 50 largest cities in the U.S., home prices have dropped in 20 of them since last year. As of May, the national average home price rested at $442,500, with certain regions like Miami experiencing notable decreases, averaging an 11% drop.