Over the last few months, the tides seem to have materially changed in our local real estate enclave. With most of the first two months of the year continuing the same slow patterns from 2022, March and April picked up with a steady stream of buyers reentering the market. Our team had a number of transaction sides in Carmel to indicate that same trend. This week the FED raised rates again- however this time only a quarter point- and appeared to change their rhetoric on future rate hikes, all but promising they were done for the foreseeable future. Sellers are starting to see that they must price accurately and without padding their asks, in order to achieve a sale, and buyers seem to be reacting to that while acclimating to current rates.

What’s happening on the ground? Prices have finally gotten to a point where we as local professionals can make an argument for some degree of adjusted prices across some of the product types we have here. In other markets like much of the South Bay in Silicon Valley, we saw much earlier and deeper value movement between like-kind products. I can’t say for sure why the Monterey Peninsula held value better than more historically prime markets, but it’s the case.

There is opportunity for buyers out there as sellers who want to sell begin to price their homes accurately, in the case of well maintained, sometimes somewhat dated homes. Finished, very updated and very charming homes closer to prime areas, are tending to hold value closest to the peak and sometimes still very near or at it. Properties that have one or more terminal flaw, ie location, water issues or other issues affecting title or future use of the property, are sometimes having to be priced under previously accepted market.

Some numbers- Carmel had 29 sales in March and only 18 in April. Overall, Carmel is down 49% in number of sales YTD. Inventory is starting to pick up and is sitting at 105 Active listings versus 82 this time last year. The main price tier that continues to move with normalcy is $3M and under. Months supply of inventory grew to 5.9 months, which would be considered relatively at buyer/seller equilibrium. Essentially this means there is finally opportunity for both buyers and sellers as we arrive at this point and experience an uptick in sales velocity. When a seller prices correctly in a low inventory area, such as the Country Club MPCC area of Pebble Beach, you can still see multiple offers for some product types. LP / SP (list price to sales price) ratio is down to 93.4% overall. In the office, our company transaction coordinators are busier than they have been in the last 12 months.

Last but not least, I have to always remind people it is crucial not to be data junkies in real estate. Individual homes are not commodities- especially in Carmel and Pebble Beach. What we are looking for is momentum in one direction or the other, and to compare individual home sales to other like-kind home sales last month, last quarter, etc… For example, Pebble Beach is showing an average sale price drop of 50% and the median is down 19% over this time last year. Does that mean home values have dropped 50%? Heck no!!!
It just means that the homes selling this year are in a lower price tier compared to the more expensive inventory that was moving last year.

That’s about what I’ve got this month. Please scroll down for more data, in addition to some of our recent sales activity.

Cheers,
Ryan