Our official selling season is here and along with it an unusually warm and sunny start to summer. The San Francisco Bay Area is in the midst of huge buyer demand coupled with low inventory, resulting in a steady increase in sales prices. The Monterey Peninsula typically lags behind the Bay Area by 6-9 months and we are slowly seeing that energy trickle down this way. This is felt strongest in Carmel-by-the-Sea, where activity is fueled by demand from vacation home buyers. In general, we’ve seen a pick-up from the doldrums of the downturn. Prices may not be on a rapid rise, but it’s refreshing to say activity has picked up. While every neighborhood does act differently, it is important to dissect the three market segments I cover.
Carmel-by-the-Sea
With a new mayor, Jason Burnett, and a recent visit to Sunset Center by Vice President Joe Biden, Carmel-by-the-Sea is enjoying some lime light. Carmel is also ready to play host to some of its most anticipated summer events such as the Carmel Bach Festival & Concours on the Avenue. Still our market leader, Carmel-by-the-Sea enjoys the bulk of demand, where up to 80% of the Golden Rectangle properties are vacation homes. Inventory under $1.7M is low, especially in the walk-to-town locations. Sales prices have stayed relatively stable since the beginning of the year, but are on an upward trend of about 5% from 2011.
Carmel Valley
The Carmel Valley market is flat, but the spring did witness an increase in buyers. Buyers, however, that are still looking and not yet pulling the trigger. With the increase in buyer demand we also have a shortage of inventory in the Valley. The number of closed sales for the first half of 2012 is on par with the first half of last year. Only 9 sales, out of 35 in April, May & June, were over $1M. Communities, such as Carmel Valley Ranch, did see a sudden pop in sales. Other good news for the Valley – Quail Lodge, owned by The Hong Kong & Shanghai Hotels, solidified the purchase of leased land where holes #12 & 13 sit, as well as announced plans to re-open the hotel. Sales of raw land, however, remain stagnant not only in the Valley, but throughout Monterey County.
Pebble Beach
The Coastal Commission finally granted the Pebble Beach Company approval to develop a new 100 room hotel, expand both the Spanish Bay Hotel and The Lodge and sell 90 new home sites. Granted all of this will take years to come to fruition and not all 90 home sites will likely be put on the market at once. There were 5 sales over $2M, out of a total of 26 during April, May & June: $14M, $5.7M, $5.155M, $4.7M and $3.625M. These sales were located in the Lodge/Central Pebble & Country Club West regions. Compare that to the first quarter of this year with 12 sales over $2M, the highest sale at $6.75M. The number of properties selling in Pebble Beach is up this year over last, but prices are down. So far this year, 60 homes sold with an average sales price of $1,722,012, as compared to 37 for the same time period last year with an average of $2,232,959.