Last week Forbes published their “by zip code” analysis of the most expensive zip codes. As expected, the median price of homes for sale in most zip codes fell over the last year.

A year ago California accounted for 96% of the top zip codes, this year…less than 50%. Of the California zip codes still on the 500 most expensive zip codes, 83% had median prices that stayed the same or declined.

Pebble Beach

Pebble Beach experienced an 8% decline in median price from the previous year with a ranking of 42 on the most expensive zip codes list. While this number gives a general idea of the health of the Pebble Beach market digging a bit deeper offers more insights.

First, Pebble Beach is a relatively small market, with properties of drastically different size, location (views and proximity to golf courses etc,) and list prices, that the addition or removal of a couple of homes can skew statistics dramatically. Nevertheless, one can see the trends. The graph below compares the last 12 months with the previous 12 months.

Even more dramatic than the recent trends in pricing is the continuing increase in average days on the market for Pebble Beach homes.

If you break down the average days on market, not surprisingly, you see that the higher end homes are taking the longest to sell. The average days on market for the most expensive quartile (the top 25% of homes by price) is just under 300 days. The lowest quartile of Pebble Beach homes (the least expensive) is averaging 220 days on the market.

Percent with a Price Decrease

Pebble Beach, and markets like it, tend to have more sellers that are able to withdraw from the market and “wait for a better day” or hold more firmly to a list price than other markets where seller’s are running out of resources to hold on.  The graph below shows the percentage of homes on the market, at each point in time, that have experienced a price reduction from their initial list price. It is interesting to note that the lowest percentage of price reductions is among the highest priced homes.

Forbes observed in the article,

“Potential buyers increasingly fall into one of two categories: Those who have seen their net worths damaged by the financial crisis and those who realize they could probably get a better deal in a year’s time.”

I concur with their opinion. I also believe, as do they, that the lack of liquidity in the credit market for the high value mortgages that are often needed to buy these homes has had a huge impact. I have clients that are supremely qualified that have gone through loan processes that required hours of document collection and multiple appriasals and reviews. It is clear that lenders would much prefer to make 5 smaller loans than 1 large one.

We need credit to flow again to bridge the gap between ready and willing buyers and sellers.

The AT&T Golf Tournament mostly escaped rain on Friday and Saturday with 24 year old Dustin Johnson taking the lead. Every year as the tournament approaches I am asked by potential sellers what impact the event has on efforts to sell a home in Pebble Beach, Carmel, or the other peninsula communities.

The AT&T golf tournament and other events such as the Concours d’Elegance in August are very important because they bring people to town and remind those who watch the events on TV or read about them in the media that the Monterey Peninsula is a special place.

While a few homes will go into escrow during this weekend, the reality is that most attendees who are here for the tournament are far more interested in the golf, restaurants, and other activities than they are in looking at homes for sale. What happens most often is visitors for an event such as the Pro-am have a great few days here and decide to visit again in a few weeks or months on a follow up visit. It is on their return trip that they are more likely to learn a bit more about the different communities and explore the possibility of buying a home here.

This year the tournament fell on the same weekend as Valentine’s Day which is unfortunate for local commerce and for real estate as well. A Valentine’s weekend that doesn’t have any other major event will bring folks to town who are interested in walking on the beach, a romantic dinner, and exploring Carmel’s art galleries, Pacific Grove’s coastline, playing golf at Pebble Beach, and…..visiting a few open houses.

With any luck, next year we can all take long romantic walks through town-without rain-on Valentine’s Day, and enjoy the AT&T tournament on an equally sunny but different weekend.

Market Profile

There are currently 5 Pebble Beach properties in escrow ranging in list price from $1,745,000 to a vacant lot listed for $300,000. (Current Pebble Beach Pending Sales) There have been 13 closed sales in Pebble Beach since October 1, 2008, ranging in sale price from $3,150,000 to $675,000 (Pebble Beach Sales since 10/1/2008).

As with other Peninsula markets, Pebble Beach remains firmly at the “buyer’s” end of the spectrum with 207 average days on market.

While Pebble Beach is certainly healthier than many other high end markets, a telling statistic is the percent of listed properties that have seen a price decrease, discussed below.

Pebble Beach Market Action Index

The market remains firmly at the “Buyer’s end” of the Market Action Index (MAI). An MAI above 30 typically indicates a Seller’s market with prices tending to rise. An MAI below 30 implies a buyer’s market with a great deal of inventory, increased days on the market and weakening prices. 

Pebble Beach Median Price

Pebble Beach has a range of housing stock (the lowest priced listing at the moment is a lot at $470,000  while the highest is a front line estate at $35,000,000). This fact makes Median price of limited value. One high end listing coming on, or going off, the market skews the numbers. 

By breaking the market into quartiles the data is a little more enlightening.

Most of the large fluctuations in list price occur in the upper quartile. However, if you look only at the bottom half (quartile three and four) you see that the lowest priced homes have trended downward since 2007.

As properties come and go the characteristics of these four quartiles changes. Each quartile represents 25% of the market, so Quartile 1 and 2 combined is the upper half, while Quartile 3 and 4 is the lower half.

Tracking Pebble Beach Properties

The easiest way to track properties of interest is to use the Private Client MLS tool which lets you select properties of interest and track them through the sales cycle, including their final sales price.  You can take a Quick Look at Pebble Beach listings on the MLS.

Insights

Buyers remain mostly on the sidelines. While many are concerned that the market may continue to settle, others are willing buyers  but unable to secure credit. There has been a decided uptick in showings and interest since the first of January.

There is a sense in our markets that we will settle into the bottom of the value curve over the next few months and then remain relatively flat for some time.

Buyers who find the home that fits their needs should act, and present a well supported clean offer. 
Sellers must do everything they can to make their home the “exceptional deal” for an “exceptional home.” Proper pricing, home staging, quality photography, and a strong internet presence are all imperative.

Normally my posts focus on homes for sale in Pebble Beach, Carmel or Carmel Valley but once in a while I stray from that topic.

The folks over at golfvacationinsider.com  recently posted an insider tip that Pebble Beach is offering play at Spyglass Hill and the Links at Spanish Bay at a 50% discount and the Pebble Beach course at 30% without having to be a guest at a Pebble Beach hotel.

The discount is offered to members of the Northern California Golf Association (NCGA membership costs $25 a year) and residents of Northern California. Members of recognized golf associations elsewhere in the country can join the NCGA. Info at ncga.org.

Many of us, including my 9 year old and 6 year old, are members of the NCGA. Keep in mind that members can play Poppy Hills for between $55-70 versus the regular $200. In fact, the NCGA offices are at Poppy Hills.

According to golfvacationinsider.com the discounts are as follows:

Most importantly you don’t have to stay at the lodge to secure these rates and a reservation. There are blackout dates on January 16,17, and 18th.

The special only runs to the end of January. Pebble Beach reservations number is 800-654-9300.

I can’t vouch for how many spots are left over the coming weeks, but the weather is beautiful at the moment…

After your round of golf, give me a call and we can take a look at a few of the discounts on homes for sale in Carmel and Pebble Beach.

The story at golf Vacation Insider.

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.