As we move into March there are 240 homesfor sale in the greater Carmel area (Carmel-by-the-Sea and the surrounding area), with properties taking about 180 days to sell…. These days, the number of sellers that “give up” is well above past years. This is reflected in the higher number of expired and canceled listings.

As the Carmel real estate market has softened I have seen buyers shift their attention from areas such as Carmel Woods or south east neighborhoods of Carmel-by-the-Sea to closer to town and into the “golden rectangle.” Properties are still selling in all neighborhoods but buyers are looking for the perfect home or the near perfect deal.

This Week’s SnapShot

 

Market Profile

Carmel remains firmly at the “buyer’s market” end of the spectrum. Since January first I have seen an uptick in buyer activity. The median list price has fallen $100,000 since the first of the year.  Successful sellers are those that adjust to the changing market by pricing their homes to differentiate themselves from the competition. If a home meets a buyer’s needs, they should submit a well prepared offer with supporting comparables.

The Market Action Index

The Market Action Index (MAI) measures available supply relative to the current level of demand. Index values above 30 indicate conditions favor sellers, below 30 favors buyers.

Median Price Per Square Foot

Homes in Carmel are not typically priced by “square foot” as there can be a 1,600 square foot home worth $900,000 a block from a home exactly the same size that might be worth $1,800,000. Nevertheless, median and average price per square foot are useful for tracking trends.

Looking at the market by Quartiles

To more accurately describe the sub-markets within Carmel, I report the median price in quartiles. The most expensive 25% of homes make up the first quartile, the next 25% the third quartile, the next 25% the third, and the least expensive 25% are the fourth quartile.

While the upper quartile is well off of what we saw in 2005, at the end of 2008 it was these higher priced properties that lifted the overall market.

Recent Sales

There were 25 closed escrows in Carmel in the last 3 months. They ranged in price from a low of $575,000 for the house on the corner of Highway 1 and Ocean Avenue to a high of $5,433,863 for a 3,100 square foot home on San Antonio Blvd and 8th Avenue. (Carmel Home Sales in the last 3 months) There are 20 Carmel properties currently in escrow. (Carmel Pending Home Sales)

Tracking Sales and Comparables

The easiest way to track comparables and properties of interest, is to use the Private Client MLS System to identify favorite properties. Once identified, the system will track and report on price changes, status changes, and the ultimate sale price when the property sells. You can also take a quick look at MLS listings for Carmel.

Carmel’s Schools

Anyone living in Carmel, or interested in moving here, with children knows Carmel School District is one of the best public school districts in the state of California. The district consists of three elementary schools (Carmel River Elementary, Tularcitos Elementary School and Captain Cooper Elementary School), one middle school and one high school.

Last night’s school board meeting was well attended and everyone acknowledged that the district is a victim of its own success. I have real estate clients from as far away as Atlanta interested in moving into the district, our schools being a major reason. As the price of homes has fallen, and rental rates have dropped as well, buyers and renters are moving into the district when possible. [Monterey school district spends $8,000 per student per year while Carmel spends $16,000.]

All three elementary schools are exceptional. Tularcitos was recently identified as a blue ribbon school and all three schools repeatedly score in the highest category used by a number of rating services. All California public schools undergo yearly testing. The Carmel district repeatedly scores well above the state average. Carmel CST scores.

The Issue

Carmel River has seen an unanticipated influx of new students in the last year which has prompted the district to consider a boundary change, adjustment in class sizes, a change in the school day, and other ideas.

Moving the boundary between Tularcitos and River was opposed by nearly everyone in attendance. Tularcitos is located in Carmel Valley Village (a 15 to 20 minute drive from the mouth of Carmel Valley) and any shift in the boundary would have  a major impact on the families affected.

The Solution Proposed by the District Administration

There was an audible sigh of relief when the administration stressed that they were not recommending a boundary change to the School board. It is still an option but there appeared to be near unanimity among the board, the administration, and certainly the audience that it was the least appealing option.

The administration is proposing allowing up to 25 students in each of the River School kindergarten classes (although the number will probably be less), up to 23 in the second grade (rather than 20) and up to 22 in third grade.  The cost of this “first scenario” supported by the administration could be as high as $60,000 in “penalties.”

These penalties are actually a reduction in “incentives” offered by the state for keeping the average number of students in each class in those grades under 20.44 students.

While the district would rather keep those penalty dollars, there was an acknowledgement that the other alternatives (boundary change, split day kindergarten, and several others) all have financial costs as well (impact on families, subsidizing busing etc.)

What Next

The administration is working with a demographer to better estimate future enrollment and the board will again discuss the issue at its next meeting.

An Audit

There is a belief that there are a number of students attending schools in the district that do not live in the district. It is difficult to say if this is an urban myth or a real problem. The district is proposing a student audit. Under the proposal, each family at River School will have to prove residency later this spring. That will be followed by random “house checks” in a couple of select grades to confirm residency. The district also intends to publicize a “tip line” for anonymous tips that someone may not be a resident of the district.

The district has modeled its audit on that used by the Palo Alto district.

Other info

I’ll post links to the board minutes once they are available.

The Monterey Herald Article about the Carmel School Board Meeting

California Department of Education STAR results for Carmel School District

Great Schools (a source of data on school districts)

The School District Web page

I recently put another Carmel home in escrow.  I had been working with these clients for quite some time-looking for their perfect house. As with many buyers, my clients were hesitant to make a move given the economic uncertainty and credit crisis. However, when they found their house, it was clear that the time to buy was now. We knew this because several months ago I set them up on my Private Client MLS system and together we have been watching the real estate market.

Every couple of weeks I would receive a phone call from them about a new listing or I would send them a note about a pocket listing that might have been of interest. Over the weeks we looked at half a dozen properties, none of which were a perfect match.

With each showing we refined our search criteria.  We explored different neighborhoods, and the pros and cons of Carmel vs Carmel Valley or Pebble Beach.

When we found interesting properties, they would save them their “favorites” folder and we would track them as the listings expired, sold, or had price reductions.

Two months ago we selected a property and made a well defended, clean offer, albeit well below the list price. We failed to “reach a meeting of the minds” with the seller and moved on.

Three weeks ago we identified a house that struck them as a nearly perfect match. Over a weekend we were able to put it in escrow, in competition with another buyer, and are now moving towards a close of escrow early next year.

The moral of the story? In this market be conservative as to price, take your time, learn the neighborhoods that most match your personality, but be open to finding a near perfect fit. When you find it, act.

Yes, houses are investments, but they are not interchangeable. If you find the house that speaks to you, make an educated and defensible offer. Owning a “good investment” is smart -living in the house you love is the real point of buying a home.

November is over. Certainly a slower real estate market on the Monterey Peninsula than in the months leading up to it.

Carmel Valley

Carmel Valley saw only two homes go into escrow. Then again, in November of 2007 there were only three home sales in Carmel Valley in November. The difference?

This year list the list price of Carmel Valley properties were $699,000 and $550,000. Last year: $2,850,000, $1,650,000 and $1,475,000.

The orange line represents Median Price 1 Year ago, the black line this year. The plateau we saw from May through mid September of this year has faultered in the last few weeks.

Carmel

Three homes went into escrow in Carmel in November. $599,000, 799,000, and $1,995,000. In November of 2007 nine properties went into escrow ranging in price from $1,190,000 to $8,999,999.

In the case of Carmel, list price was climbing a bit over the last couple of months. However, in November prices began trending downward at the same price levels as this time last year.

Pebble Beach

Six properties went into escrow in November of 2008 compared with 4 in the same month last year.

This years sales had list prices ranging from from 1.1 million to 3.775 million. Three of the six sales were listed above 3 million.

Two of the November 2007 sales were listed at just above 1 million and two where between 3.5 and 4 million.

As with all our markets, the listing or sale of a high priced home can “pull” the data one directon or another. This is especially true in Pebble Beach.

There are 150 properties for sale in Carmel, with properties taking over 180 days to sell….when they sell. These days, the number of sellers that “give up” is well above past years. This is reflected in the higher number of expired and canceled listings.

As the market has softened I have seen buyers shift their attention from areas such as Carmel Woods or south east neighborhoods of Carmel-by-the-Sea to closer to town and into the “golden rectangle.” Properties are still selling in all neighborhoods but buyers are looking for the perfect home or the near perfect deal. There is no particular sense of urgency on the part of buyers.

Market Profile

Carmel remains firmly at the “buyer’s market” end of the spectrum. We had an uptick in activity in late August and early September, unfortunately that has cooled with the ongoing economic crisis. There has been some indication as we move into mid November that buyers are returning to the market. (See the Market Action Index below)

The Market Action Index

The Market Action Index (MAI) measures available supply relative to the current level of demand. Index values above 30 indicate conditions favor sellers, below 30 favors buyers.

I predict we will see an improvement in the Market Action Index, and a reduction in inventory as we move towards the holidays. While I hope to see an increase in sales, much of the improvement will be a result of sellers pulling their homes off the market before the holidays.

Median Price Per Square Foot

Homes in Carmel are not generally priced by square foot, but it can be informative to track the square foot price as an indicator of the market’s trend.

Median Price by Quartile

To more accurately describe the sub-markets within Carmel, I report the median price in quartiles. The most expensive 25% of homes make up the first quartile, the next 25% the third quartile, the next 25% the third, and the least expensive 25% are the fourth quartile.

While the upper quartile is well off of what we saw in 2005, in the last few months it was these higher priced properties that have been lifting the overall market.

Recent Sales

There were seven properties that closed escrow in Carmel since the 10th of October ranging in sale price from a low of $815,000 on Upper Trail to a high of $2,700,000 on Camino Real. A PDf of Carmel Solds is here:

Carmel Solds.

Carmel Solds from July through October.

Tracking Sales and Comparables

The easiest way to track comparables and properties of interest, is to use the Private Client MLS System to identify favorite properties. Once identified, the system will track and report on price changes, status changes, and the ultimate sale price when the property sells.

I was showing clients property yesterday and the topic of “real estate areas” again came up. I always start a tour with a copy of the area map and an explanation of how it works. They were surprised to learn about “areas” although they had bought and sold several homes in Carmel and Pebble Beach.

To help organize properties, the local real estate boards create “areas.” In theory the homes within a given area are more alike than not: built at the same time, on lots of similar size, similar square footage. This theory brakes down in certain areas of the Monterey Peninsula, but the system is still useful in searching for properties and doing  broad comparisons of different neighborhoods.

For example, the “golden rectangle” area of Carmel is also known as area 143. Carmel Point is in area 145 and Hatton Fields is defined as area 147.

Click on  carmel-area-map-in-color to see a pdf of Carmel’s real estate areas.

If you know the area number for the neighborhoods you are interested in, it can make using a search tool much more effective. In my Private Client MLS tool you can search by city, but you can also search by area.

If you would like a copy of the area map for Pebble Beach, Carmel Valley, or other Monterey peninsula communities, drop me an email.

While the graphs and statistics I post offer insight into the health of the Carmel real estate, frequently my clients are tracking a specific property and want to know how it was received by the market. The best way to track properties is to use my Private Client MLS. You can save properties of interest into your favorites folder and be notified when they sell, and their sales price. Send me an email if you would like me to set up the property search tool.

Here are the sales in Carmel in the last three months. If you would like more information about any of these sales, let me know.

I recently had discussion with several clients about how the market “feels” compared to last year.

I decided to run some comparisons and see what the numbers say about the Carmel real estate market:

Pretty clear that this year is quite a bit different from last. The orange bar is the 90 day median price trend line from a year ago. The black line is this year. It is interesting to see the inflection of the black line over the last few months.

Let’s explore that for a minute. If we look at the median price in Carmel by quartile (that is, divide the entire population of sold properties into 4 equal parts. It appears that the inflection is do to movement in the upper end of the market.

Back to the year to year comparison.

If we crunch the data for median price per square foot we would expect to see a similar curve, and here it is:

And finally, again as one would expect inventory for the greater Carmel area is well above levels seen a year ago. The rate of increase has declined and there has even been a bit of leveling in the last could of weeks. I, and many of my colleagues, have put more properties in escrow and entertained more offers in the last couple of weeks than in the previous month.