The Monterey Peninsula Market: Shifting Rates and the Cost of Precision Pricing

Wow, it’s already an interesting real estate season! With the new Iran action and the ongoing AI uncertainty in the equities market, I’m thankful to announce that our market here is still showing more “teeth” recently. Inventory that sat stagnant for some months has begun to go under contract, and a new wave of buyers are sensing a possible stabilizing the market and re-engaging searches they may have put off in the last 12-18 months.
 

All that being said, we’ve been seeing a sustained gap between homes that enter the market priced with precision and those that don’t. Properties aligned with current buyer psychology — condition, pricing, and marketing working together – are moving. Homes that miss that mark are meeting resistance quickly. Buyers today are more informed, more selective, and less forgiving of initial overpricing. The most serious of whom will preview a property online, compare it carefully to recent sales, and decide whether it’s worth seeing in person long before they ever step through the door.
 

That means pricing strategy matters more than ever. When a home enters the market too high, the market responds swiftly – extended days on market reduce negotiating leverage and often lead to lower final pricing than if the home had been positioned correctly from the start. The takeaway is simple: when something isn’t working early, the smartest move is to react quickly. Adjusting sooner preserves leverage.
 

What else is happening on the ground? The Peninsula market has come down roughly 8% to 10% over the last 10 or 11 months, before appearing to restabilize, at least by the coast. While super-prime locations, legacy properties and one-off products haven’t been affected quite as much, the broader market has shifted. And while overall inventory is still tight for high-quality, turnkey luxury homes, buyers have been much more discerning, albeit showing signs of life again.
 

Rates have come down, but it is happening slowly. Notably, Jumbo rates are hitting levels we haven’t seen in nearly three years:

• Jumbo: 5.99%

• Conv: 5.875%

• Hi Bal: 6.00%

• FHA: 5.125%

Unless another new reality presents itself, this could be a sensible moment in time to buy or sell. My wife and I just personally purchased a property in Carmel, so my bet is that this is a good time.
 

If you’d like to discuss the state of the market, or if you want an honest, no-sugarcoating assessment of what your property is worth today, let’s chat.
 

Cheers,

Ryan.