Even with 10 million cubic yards of rock threatening to fall on them, the residents of this fashionable seaside community are refusing to give up their renowned adherence to the mellow California lifestyle.

While state engineers nervously monitor the 500-foot section of slowly crumbling cliff, Malibu's residents-including movie stars, realtors, restaurant owners and beachcombers-are adjusting to the inconveniences brought on by the rockslide and the closing of Pacific Coast Highway with casual ease.

In fact, virtually no one in this communtiy of 20,000 seems to be talking of leaving the area, which over the years has been afflicted with fires, mudslides and tidal damage to go with the current geological instability.

"I don't think property values will go down," said actor Stuart Whitman, fresh from filming a movie in which he plays Peoples Temple cult leader Jim Jones. "Because, regardless of the inconvenience, the insurance problems, the taxes, the fires, the floods-we've got the ocean. "That's why people keep coming."

There has been no letup in people seekings to move to Malibu despite the current dangers, according to area realtors.

"What effect does a catastrophe have," asked Jerry Pritchett, a local realtor. "It's here today, gone tomorrow. People forget. "We've been through this so many times."

In recent years some controls have been imposed by local and state Coastal Commission officials to prevent building on geologically unsound areas. But, despite this, some 50 to 100 people have chosen to build on clearly unstable areas after signing waivers of their legal rights in the case of naturally caused damage, according to Los Angeles County building and safety officials.

Some Malibu residents acknowledge that it may well be the construction boom in the area- and particularly the building of the four-lane Pacific Coast Highway-which set of the geologic fissures in the crumbling cliff.

"Way back in the early '30s, when they built that highway, they cut off the toe of that cliff," said producer-director Robert Wise, a long-time Malibu resident. "We heard long ago that they cut into the support for the palisades. Then, with time and wear, they just began to come down."

Officials at the California Department of Transportation, who still refuse to guess at the real causes for the slide, believe the situation may now be "stabilizing". Dick Robison, Caltrans' executive assistant, says he hopes to be able to open at least two of the highway's four lanes next week, but insists it is impossible to speculate on the movement of the mercurial hillside.

"We're not out of the woods yet," Robison said. "Our geologists know it's ready to unburden itself. It's simply a question of when and how much."

While Caltrans waits, however, most Malibu residents seem perfectly willing to go with the geological flow. Robert Yuro, owner of the popular Alice's Restaurant on the beach, believes the slide, which has cut his business 90 percent, may all be for the best.

"This jerks you back to reality," Yuro said. "You get a chance to rectify your past mistakes. It's like starting all over again."

But for other residents, probably more numerous, the appreciation of reality is hardly the benefit they seek from the rockslide. With the road closed, they are enjoying watching deeply tanned skateboarders instead of hordes of tourists whizzing along the main highway.

"I don't like it in town anyway, so it's good excuse not to go in," said Jerry Shapcotte, a Los Angeles developer."I'd say a goodly portion of California is sliding into the ocean. There's no question that's what it's doing."

But even the prospect of becoming a 20th century Atlantis does not disturb Shapcotte and many other Malibu residents. "I don't think it will happen in my lifetime," he said confidently, "and as far as death it concerned, driving on the highway's worse." CAPTION: Picture, Malibu-area children, walking to catch bus, pass small rock slide.