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.

In early December I had the priveledge of being the first Realtor to book a Zeppelin charter for some of my more adventurous real estate clients to look at their recent purchases from the air.  The twelve of us, plus the two pilots, departed Monterey airport and headed south east towards Carmel Valley. In advance I was able to provide the pilots with the GPS coordinates for a few of the passenger’s homes so we could more easily find them from the air.

The Zeppelin is Coming Back to Monterey…..

The Zeppelin is usually based in San Jose at Moffett Field from where it provides air tours of San Francisco. It also occasionally travels to Napa Valley. And, it will be back over Monterey, Pebble Beach, and Carmel on Thursday February 12th–The Thursday of the AT&T Golf Tournament.  [More information about schedule and costs below]

Our Trip

We headed out to just past Carmel Valley Village and on the way overflew the Del Mesa Development which is a short distance from the mouth of Carmel Valley on the North side.  [See CarmelValleyReport.com for market updates on the Valley.]

Cruising at about 40MPH we flew 1,000 feet above the ground past the village and the now closed Carmel Valley Airport.

We buzzed a few homes in Carmel Valley and then made our way west and flew over Carmel.  My two sons were able to identify their elementary school and we were able to easily identify the Sunset Center and a few other Carmel landmarks. [Carmel Real Estate info at www.carmelreport.com]

From Carmel we headed to Pebble Beach. [PebbleBeachReport.com] Looking back at Carmel Beach you get a sense of the view from the windows.

The airship is surprisingly quiet– much quieter than inside a commercial airplane. It is interesting to note that in addition to the large windows on each side, there are two windows that remain open. Given that you are only traveling at 40 MPH there is almost no wind noise but you don’t want to get to close without a hand on your hat.

There are no “bad seats” on the airship.

Except for takeoff and landing everyone is free to move around the cabin, discuss what they are seeing and even interact with the two pilots.

It is an amazing way to spend an hour and gain a whole new perspective of the Monterey Peninsula.

Information about Schedules and Flying

The Ship is scheduled to return to the Monterey area on Thursday the 12th. There are a couple of one hour tours scheduled about midday and a bit later in the afternoon. The standard rate is $495 per seat for the hour tour plus tax. However, they are running a special for this visit of “buy one and get the second one at 50%” and buy 5 get the 6th free.

If one wants to charter the entire ship (12 seats) the cost is $4,950 plus tax, equivalent to paying for 10 seats with 2 free.

If you would like to fly on the 12th drop me an email at malone@malonehodges.com or call my cell phone at 831-601-4740 and I can tell you more about our experience on the flight, the schedule for the 12th and set up a reservation.

 The airship website is at airshipventures.com. If you contact them directly mention my name and the discount offer. I hope to see you on the 12th!

Malone

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.

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.

As I have stressed in my Carmel Report and Pebble Beach Report, the credit crunch has made it difficult for many Carmel and Pebble Beach buyers that in the past would have opted for “no-doc” or “low-doc” loans.

My friend Steve Woods at Blue Adobe Mortgage has provided the following update on the state of the mortgage market. Steve can be reached by email at stevew@blueadobemortgage.com or by phone at 831-917-4462. Give him a call for a quick quote and advice on how to best structure a loan in this market.

New 2009 Conforming Loan Maximums

The temporary jumbo conforming mortgage loan limit of $727,750 has expired. The new jumbo conforming limit will be based on 115 percent of the County median sales price, not to exceed $625,500.

Jumbo conforming loan limits for our regional market area will be as follows:
• Monterey County  $483,000
• Santa Cruz County  $625,500
• San Benito County  $625,500
• Santa Clara County  $625,000

Most of the San Francisco Bay counties received the highest designation. Monterey County which used to have a median price similar to Santa Cruz has seen a 50 percent reduction in the median price and will see the lower $483,000 loan maximum. The standard conforming loan limit will remain at $417,000 for all of the above counties.

In addition, FHA loans have been increased along the same line as jumbo conforming. Monterey will have a new FHA jumbo loan maximum of $483,000 and Santa Cruz, San Benito and Santa Clara Counties will receive $625,500. FHA loans are important for our market due to their low down payment requirement and easier underwriting guidelines. As of January 1st, 2009 the down payment for FHA loans will be 3.5 percent. FHA allows a parent or relative to give the down payment as a gift to a potential purchaser and is an excellent program for the first time buyer. Young professionals in our market area are encouraged to learn more about FHA financing.

The Jumbo Secondary Mortgage Market no longer exists (loans over $625,500) Due to the “sub-prime” and “Alt-A” market meltdowns, lenders no longer package loans above the “super conforming” loan limits for sale to various investors. There are a few regional banks who are offering “short-term” adjustable loans up to loan amounts of $5 million,  however these loans are fully documented income with credit scores of over 720 and reasonable cash reserves.

The “stated income, stated asset” loan type no longer exists and is blamed for the credit meltdown we have seen over the past 15 months. We are back to the 1970’s with respect to loan underwriting.

For more information about mortgage financing feel free to give Steve a call directly, or you can reach me at 831-601-4740 or malone@malonehodges.com to discuss a specific property or area.

It is imperative that you have the financing piece of the puzzle in place to make the most effective offer possible.

Nineteen properties have sold in Carmel Valley, including those in escrow, since August 1st of 2008. Carmel Valley includes Cachagua, the next valley to the south from Carmel Valley. The Sales are listed below, by list price.

As you will notice, many of these properties saw a price decrease from their original list price. As with elsewhere, sellers and their agents are reducing list prices in an effort to find the market.  

Tomorrow I will be posting updated Carmel Valley analysis, with a discussion of pricing and absorption rate. Carmel Recent Sales over the last few months have seen price reductions as well. 

If you would like more detail on any of these sales, drop me an email. You can also sign up for the Private Client MLS Search Tool and track new and existing listings, and receive emails when properties you identify close escrow.

At the beginning of every week I email a Market Report for each community on the Monterey Peninsula.

Carmel Valley Sales

Better Here Than Elsewhere, But….

Nearly all of our markets are discretionary. People choose to live here.

When they come to the Peninsula,  buyers are often acting on their dream of owning a second, or even a third home.   Most of our buyers are sophisticated and successful and pay attention to appreciation potential and the cost of money. They track the market and pay attention to statistics.

Given the lack of urgency, many buyers are holding back in hopes of catching the bottom of the market.   Others are identifying the home they want, and using their power as strong buyers to negotiate exceptional deals.

Successful sellers are pricing their homes based on today’s comparables not those of 18 months ago. They are staging their homes and paying attention to the details of how a home shows.  A home has to look and feel great through photos, brochures, and in person.

It is extremely important that the home is well positioned on the internet and that the brokerage community is educated on its value.

Within the last couple of weeks I put these two properties in escrow, representing the seller. In both cases we made a concerted effort to prepare the homes for the market and create a sense, which was correct, that they wouldn’t last long.

Ocean view home in Carmel

Ocean View Carmel Home

Teapot Cottage Carmel

Carmel Cottage for Sale

I strongly advise buyers to submit a detailed approval letter from a lender and proof that they have the downpayment with their initial offer. Make the case that you are qualified and able to close escrow. It will strengthen your hand considerably.   My clients and I recently prevailed in several multiple offer situations because we presented clean, well supported offers.

If you would like to discuss strategy, or the market, give me a call on my cell phone at 831-601-4740 or send me an email at malone@malonehodges.com.