February Newsletter

Wind and rain described the environment of the past few weeks on the Monterey Peninsula, bringing seemingly less destruction and a bit less rain than the previous year (for context, last year we had 4 Pine trees come down across our home access road by this time; this year, we’ve had none). Some places in town with more unattended trees or the more dense Del Monte Forest, did have trees down and a bit of property damage occurred. The annual AT&T golf tournament, with it’s new format and Signature Event status (almost no celebrities anymore and no movie stars, but more top pros), appeared to be a very successful event, however the rain came in Saturday, forcing us to spend most of that day hunkered down in the Beach Club, watching on TV. Sunday was cancelled due to rain, and eventually the tournament was called, skipping the last round. I can’t say a little weather wasn’t exciting, though!

As for the real estate marketplace, the year is off to another slow start, in part due to the weather. I suspect now that the temperatures are heating up, we’ll see more movement on our way into Springtime. After two years of a shrinking market, the industry seems to be buoyed by the prospect of rate cuts and a healthier forecast. There are of course those out there who are waiting for mortgage rates to come down, but without much luck yet, as the labor market continues to be tight. I think it could be a couple of months before we see anything, and potentially we only see something like 3 rate cuts this year, versus the rosier outlook of 4-5. Goldman Sachs’ annual briefing to the Sotheby’s International Realty US brokerages, a couple of weeks ago, made it clear they think the worst is actually behind us in 2023, with home prices over the US poised to increase 5% this year. Whatever your strategy, it is important to be aware than inventory levels are roughly half or 60% of what they were pre-pandemic, and likely to stay that way, or get worse, as rates come down, and more buyers enter an already depleted inventory environment, driving prices up further.

What’s happening on the ground here in Carmel? Well, there are currently only 9 active listings in the city of Carmel, and only one closing, year to date. If you’re a potential city seller (I’m waiting on a few of you to get going!), then the landscape there is already prime for you to position in the market, especially closer to the beach inventory. We do expect inventory in prime Carmel to roughly double in time for the Spring season. That creates a better environment for buyers, although we also expect rates to create some more competition on the buy side of things. For sellers, it could mean double the competition to sell. For the time being, we are experiencing some seasonality. For context, in 2023, by this time we had 3 closings in the city of Carmel, and 10 YTD in 2022. The greater Carmel market is seeing some of the same.

In Pebble Beach, there are 2 closed sales this year compared to 12 by this same time last year. I do think we are seeing some real impact from the recent storms, too. There are 27 Active listings and we do expect that number to rise by Spring. We also have quite a few buyers out there who have seen everything, and are waiting sideline for active or even off-market inventory, once sellers give us the green light to show. Lastly, we continue to see multiple offers on turn-key and new or freshly redone homes. So, the demand is there but the choices aren’t!!

Please reach out to me with any questions or to talk about your home’s value. We need inventory at this time.

Cheers,
Ryan