This newsletter would have typically gone out closer to the beginning of the month, however with a full week or more of power outage here on the Peninsula, and being in a constant state of crisis with flooding and fallen trees everywhere, it just wasn’t my priority! I feel fortunate to be able to report that we did not have any major damage to any of our friend’s or client’s homes this last round of storms, more-so just general trees down and water leaks. The weather did, however, manage to keep most would-be buyers off the Peninsula. I will look to see if the market picks back up as we get into smoother skies…. That said, we still have slower but relatively healthy traction in town. Our team also closed a couple of different deals over the last month or so.

Other factors – There is quite a bit of outside influence on the real estate market this quarter, from non-stop wind and rain, to the collapse of Silicon Valley Bank, which affects our 2nd largest local real estate buyer pool. While that may be true, there is some silver lining. Many of our reservoirs are filling back up for the first time in years, the federal government has agreed to step in and back all deposits at SVB, well beyond the FDIC insured levels, and the FED has begun slowing rate hikes, after seeing the adverse effects on regional banks (they did raise rates a quarter point on Wednesday, as I’m sure most of you know). While inflation continues to be a problem, many continue to see real estate as a primary place to protect their cash, and demand continues to simply outpace supply. And Carmel and the overall Peninsula continue to be a primary lifestyle choice, often more important to buyers than timing that market. It helps to be the best place to live in the world! 

What’s happening on the ground versus what we see in the news and in the data? If you looked at the average price per square foot in Carmel in January, you would have seen $1,750 /ft and thought the market had come down significantly. But if you looked at that same indicator in February, it would tell an entirely different story at $3,036 /sq ft. Did prices rise 73% in one month? Obviously not, but I have had several clients who are accustomed to reading data be confused by this. Although the data shows many areas as having had come down in value, the truth is that most prime areas have remained somewhat static, with some product types and locations having had gone up (so far).  Carmel city (93921 zip) is down to 1.3 months of supply inventory, down from 2.4 months supply this same time last year. In addition, with only 8 sales showing in 93921, YTD, versus 62 the same time last year, the average sales price in the data can be misleading. Most of these sales have also occurred at the lower price points. From a comparable analysis between like-kind product and like-kind product, you see that we in fact do not have prices coming down for several prime area product types in Carmel- sure, some less desirable pockets and dog locations, you may be able to make an argument that they’ve softened, but those desirable walk to town / walk to beach locations are continuing to be in low supply and high demand.

As always, I encourage you to reach out to discuss the market, or to chat possibilities around marketing your property this Spring or Summer.

Cheers,
Ryan