Good morning Friends!

Last weekend was the Carmel Meet the Makers Art & Wine Walk. We headed downtown with some friends and hopped around to see all the local art galleries that we seemingly forget about sometimes! Carmel has such a cool and vibrant art scene for a small village, from paintings to sculptures, to modern art to photography galleries. There were quite a few local wineries represented, too. Event goers we chatted with were often talking and asking about the real estate market, and for any deals or special properties around town. Real estate seems to be top of mind around here.

Big changes in town! Carmel’s city council has decided to finally give each home a proper, numbered address. I will miss the cute addresses such as Carmelo 2W 10th (example only), but in the new world of Amazon delivery and digital everything, too much is seen as falling through the cracks. It makes sense, but it will be a bittersweet end.

With regards to real estate, we are forecasted to see additional slowing in the market over the next year. Just this week, Fannie Mae reported that they see sales over the next year dropping by 21%, with mortgage loan originations dropping by 18%. I want to emphasize that those numbers are as to sales unit volume, and not as to prices. Fannie Mae predicts home prices to fall by just 1.5%. That’s not to say that they won’t come down further over time, but the opinions differ on whether the drops there will be very substantial, or whether they’ll come more so in 2024 if a global recession materializes. For now, we can say with certainty that demand will continue falling off commensurate with the continued FED rate increases, so sellers will see less of that same upward thrust of asking and over asking offer numbers, in most cases. After all, mortgage rates have jumped from under 3%, at the beginning of the year, to almost 7% today.

So what’s happening on the ground? Market cadence itself continues to slowly return to more “normal” market conditions. Our team deal size average has come down a lot due to inventory shortages in the downtown Carmel market, which is our specialty neighborhood. Prices of new construction, cherry and one-off properties continue to stay firm, with special emphasis on new or newer construction, becoming less crucial in neighborhoods where inventory is and has been low for a very long time, i.e. the Golden Rectangle in downtown Carmel. Carmel Valley and Pebble Beach have softened a bit more. Sellers are staying on market longer, and the most active buyer profile is becoming that buyer with a need versus a want. For now, the front runner buyer profile, continues to be a buyer that wasn’t able to compete with multiple offers, or move fast enough, over the last year or two, and is now getting renewed opportunity. In any case, regardless of data, Carmel and the surrounding area continue to be in high demand around the world, and inventory remains at historically low levels.

As always, please reach out if you or a loved one is in need of representation, and please scroll down for more activity and data.

Cheers,
Ryan & Team