As expected, the Coastal Commission has approved Pebble Beach Company’s revised development plan, most recently rejected in 2007. The plan is a departure from the original intent years ago to build another golf course. The approved plan includes the construction of 90 new homes. News Coverage of the approval. The Staff Report that was the basis for the vote runs 195 pages.
US News released their ranking of public school across the nation today. Carmel High School ranked fairly high in the standings based on test scores, availability of Advance Placement classes, student teacher ratios and other metrics.
The high quality of the Carmel School district schools (three elementary, one middle school and the high school) has a material impact on home values within the district as families rent or buy to send their children to the schools. I am a father of two Carmel school district students (one in elementary and the other at the middle school) and like many parents am involved in the school and the ancillary services and activities the district provides to the students.
You can read about the study on the US News website of school rankings.
The 5th Annual Pebble Beach Food & Wine is the premier epicurean lifestyle event on the West Coast.
Brings 5000 national and international attendees to Del Monte Forest in Pebble Beach, CA; one of the most picturesque strips of coastline in the world.
Hosted primarily at Spanish Bay, the scope of the event encompasses every property in Pebble Beach and uses local and regional staff to create a hedonistic four-day event that matches 250 acclaimed wineries with 75 celebrity chefs, and includes wine and beverage tasting, cooking demonstrations, and some of the most exclusive, unusual dining opportunities available in the world.
To learn more about the Pebble Beach Food and Wine event click here.
To submit your personal photos from the event and a chance to win a prize click here:
The “Valley” is the most geographically diverse of our real estate markets with lots ranging from a few thousand feet in the neighborhoods located close to the mouth of the valley and near Carmel Valley village, to large equestrian properties and vineyards of tens to hundreds of acres. Within Carmel Valley are there are several developments including the Santa Lucia Preserve, Tehama, and Carmel Valley Ranch. Each of these developments has distinctive qualities and unique market characteristics that impact the broader Carmel Valley numbers.
Total inventory in Carmel Valley declined through the latter half of 2011. First quarter inventory of 264 homes compares favorably with 336 homes on the market during the first quarter of 2011. Average days on market also fell from 231 days in the first quarter of last year to 173 days in the first quarter of this year.
Average Sale price climbed in November and December of 2011, held relatively steady in December and January, and has declined in March. The first quarter of 2011 saw an average sale price in the Valley of $830,878 while this year the first quarter average was $722,100. It is important to keep in mind that with the wide range of property values in the Valley the addition or subtraction of one or two high priced properties can have a big effect on overall market statistics.
Given the range of property and home sizes in Carmel Valley, it is helpful to divide the market into equal fourths or quartiles.
| Quartile | Median Price | Sq. Ft. | Beds | Baths | Age | Days on Mkt |
| Top/First | $2,800,000 | 4256 | 4 | 4 | 22 | 308 |
| Upper/Second | $1,020,000 | 2845 | 3 | 3 | 30 | 168 |
| Lower/Third | $699,000 | 2197 | 3 | 2 | 26 | 130 |
| Bottom/Fourth | $454,000 | 1431 | 2.5 | 2 | 40 | 182 |
The table demonstrates the range of the Carmel Valley market. The median price of homes in the top 25% of the market is six times the median price of homes in the lowest 25%. The most expensive homes are also three times as large as the least expensive. It is interesting to note that the fastest moving quartile of homes is the third quartile. These homes are closing in an average of 130 days on market versus the less expensive quartile at 182 and the most expensive quartile at 308 days.
With a median price of $699,000 the third quartile is positioned to take advantage of the historically low interest rates and the higher than national average FHA loan amount of $729,750.
Monterey was the Spanish and then Mexican capital of “Alta California” from 1777 to 1846 before California was claimed by the United States, in a ceremony at the Monterey Customs House. Monterey was home to the first newspaper in the state, first theater, first public library, and first public school and is the current home to the Monterey Bay Aquarium, Cannery Row, Fisherman’s wharf, The Monterey Institute of International Studies, Naval Post Graduate School, The Defense Language Institute, award winning restaurants, scuba diving, surfing, sailing, first class shopping and wonderful neighborhoods.
The residential real estate market in Monterey, like all Peninsula markets, is well off the highs seen in 2006 and 2007. Beginning in the summer of 2011, a drop in available inventory and increase in buyer interest led to a relatively flat median price curve in late 2011 and early 2012. In fact, the first months of 2012 have seen an uptick in median pricing partly driven by the seasonal fall off in available inventory along with a growing sense that the market may have reached a pricing equilibrium. Current inventory is approximately 60 homes whereas a year ago Monterey had about 100 homes on the market.
The average number of days on market for homes currently listed in Monterey is about 127 days with 40% of the homes currently listed having undergone at least one price reduction during their time on the market. In February of this year the sale price to list price ratio was 98.2% meaning that sellers were receiving on average of 98% of their final list price. That is, the list price at the time the property was sold, which in 40% of the cases was lower than the original list price. Effective pricing remains critically important for sellers as they work to attract buyers.
The overall Days on Market for Monterey is in the neighborhood of 127 days; it is the $300,000 to $600,000 priced homes that are seeing the quickest time to sale. In contrast, homes listed between $1,400,000 and $1,600,000 took an average of 422 days to sell over the last 12 months. This makes sense given the historically low interest rates and the higher FHA limit for Monterey County of $729,750 (while other counties have limits in the 300,000 and 400,000 dollar range.)
Monterey has always been a wonderful place to live, and has again become affordable for many buyers who were priced out of the Monterey Peninsula in the past. As lending becomes more rational and interest rates remain low, people are returning to Monterey not only to enjoy the quality of life on vacation, but to become homeowners as well.
Carmel Valley pricing slipped in mid 2007 and early 2008 and then suffered an additional decline from late 2008 through the spring of 2009. By giving back value early, Carmel Valley pricing while not appreciating did appear to have found a plateau in 2010 into early 2011 with a slip in values in late 2011. Much of the pricing variability is in the highest end of the market, discussed below. The “Valley” is the most geographically diverse of our markets ranging from lots of 5,000 to 8,000 square feet in the neighborhoods located closer to the mouth of the valley, to large equestrian properties and vineyards of tens to hundreds of acres. Included in the Valley are several developments including Tehama, Carmel Valley Ranch, and The Santa Lucia Preserve.
There is a significant delta between homes in the top 1 fourth of the Carmel Valley and those in the bottom fourth. The median price of a home in the upper tier is 3.2 times that of a home in the lowest quartile. That upper quartile home is also 2.5 times larger than the least expensive quartile.
Carmel Valley inventory fell from July to January of 2011, as it did the year before, a trait that hasn’t been as pronounced in the valley since the summer of 2007. As with all of our area markets, there has been the expected uptick in inventory as we begin 2012. Expectations are that it will return to the levels that have been typical in the valley over the last few years.
Days on Market in Carmel Valley continues its seasonal swing. It is interesting to note the divergence of the different quartiles as the velocity of sales of the lesser priced homes separates from and comes back together with the higher priced homes at various times over the last few years. As 2012 begins the highest priced homes are looking at 392 days on market versus a still long but much less painful 170 days for the third quartile.
The median price across all price points has been relatively balanced with slight decline in the lower half of the market over the last two years. The pricing variability is much more pronounced in the upper half of the market. This is somewhat driven by sellers trying to find the market and the inevitable swing of statistics with a relatively small sample size that has broad variability.
The graphs below show the decline and relative balancing of the overall median price over the last few years, and the median price by quartile. The most expensive quartile includes homes in the Tehama and Santa Lucia Preserve areas as well as higher priced homes throughout the remainder of the valley. Both Tehama and the Preserve have seen reductions in value but the statistics can also be somewhat misleading given the few number of homes at these higher price points. 2011 saw both the most expensive sale of a home in the Santa Lucia Preserve (a 7,900 square foot home at $7,500,000) and the least expensive (a 2,239 square foot home at $1,900,000.)
Of the 129 homes that sold in the valley in 2011 there were 25 homes that sold for under $250 per square foot and eight that sold for over $500 per square foot.
Pebble Beach is known internationally for its golf courses, magnificent estates, the Pebble Beach Lodge, and 17 mile drive. It may come as a surprise to learn there are 2,900 developed lots in Del Monte Forest (Pebble Beach) the majority of which are homes under 2,800 square feet. While there are homes of larger size and higher price throughout the forest, the majority of the more expensive homes are located closest to the coast, the Lodge, on one of the golf courses and on those streets with ocean views. As with our other markets, there is a great deal of price variability based on location, and home size.
Eighty two homes sold in Pebble Beach for a volume of $151,834,099. In the previous year there were 75 homes sold valued at $159,179,850. Pebble is a small enough market that the sale of a single high priced listing can swing the statistics. It is also an area that frequently has off market sales that are not incorporated in the year to year statistics gleaned from the Multiple Listing Service. For example,Carmel Realty Company represented both the buyer and seller on an $11,000,000 transaction that was confidential and does not appear in the market data.
If one divides the market in fourths, it is clear that the velocity of sales at the lower end of the range is much greater than amongst the Pebble Beach estates for which the area is famous. The upper quartile, with a median price of $6,725,000 has averaged 494 days on the market while the faster moving bottom quartile has a Days on Market metric of only 183 days. Twenty of the sales in 2011 were at prices at or above $2,000,000 while 33 were at or below $1,000,000. [For comparison, in 2006 there were 75 homes sold in Pebble Beach. Thirty of those sales were at or above $2,000,000 only five were at or below $1,000,000.]
The difference between each quartile in Pebble Beach is much more pronounced than in Carmel. In Pebble Beach the average top/first quartile home is 3.5 times larger than a home in the bottom/fourth quartile. In Carmel the average top/first quartile home is just over twice as large as the bottom/fourth cottage.
The seasonal drop of in inventory in late 2011 was greater than in previous years. As inventory rises over the first quarter of 2012 it will be interesting to see if it will settle at a level similar to 2011 and 2010. The Pebble Beach market would certainly benefit from a higher absorption rate and less inventory.
As was clear in discussion of the market by quartile, the velocity of sales in the upper half of the market is lethargic. Generally higher priced homes in a given area do take longer to sell than homes in the lower quartiles, but in the case of Pebble Beach the delta between each quartile has grown over the last few years.
The median price graph for Pebble Beach is distinct from our other markets. Carmel Valley and to a lesser extent Carmel both begin their downward trajectory in late 2007 with a degree of acceleration in early 2009 and again in early 2010 with relatively flat pricing through 2011. In contrast Pebble Beach remained relatively flat until February of 2010 when a steep angle of decline in median price began and continued through the early fall of 2011. Pricing over the last several months has shown an inflection but given the limited total number of properties listed it would be unwise to predict a reversal in the trend. The uptick in pricing appears to be in the second/upper quartile of properties with an average list price just under $3,000,000.
There is no question that listing a home on the Multiple Listing Service is the most effective way to present a property to the greatest number of buyers. However, some sellers are looking at the market and opting to make their Carmel or Pebble Beach homes “discretely available” through our website, mailings, and agent networks. While this might not reach the greatest number of home buyers, it does allow a seller to let a select group of qualified buyers know the home is for sale.
If you are in the market for a home it is important to let your Carmel Realty agent know what qualities you are looking for so that we can provide you with insights on both the “MLS properties” and those that may be quietly available. Drop me an email to learn about our current list of “off market” properties.
On Nov. 17 Congress reinstate the loan limit formula and maximum cap for FHA insured loans for two years. This is especially important to home buyers in Carmel, Pebble Beach, Carmel Valley and other Monterey Peninsula communities as our FHA loan lmits dropped from $729,750 to $483,000 on OCtober first when the previous extension expired; the largest reduction of any county in the country.
After transforming itself from a small firm just a few years ago into one of the big players in upscale Monterey Peninsula real estate, Carmel Realty is now also No. 1 with Pine Cone readers, our award winning local newspaper. We would like to thank all our clients, friends and neighbors for voting.
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