Stimulus Impact on Monterey County Home Buyers

By mhodges | Published: March 21, 2009

A quick summary on the stimulus Bill of 2009 as it relates to home buyers in Carmel, Carmel Valley, Pebble Beach and other areas of Monterey County.

> First Time Homebuyer’s Credit – First time homebuyers (which is defined as not owing a home within the past three years), are now eligigle for a tax credit of $8,000 or 10 percent of the purchase price, which ever is less. The entire $8,000 should apply for Monterey County as we’re not likely to see many sales below $80,000. Purchasers have until November 30th to purchase their primary residence. The credit does not apply to second homes or investment properties and is a direct $8,000 reduction in your Federal Tax liability. To apply is as simple as filling out your 2009 Federal Tax form next year. The National Association of Home Builders, www.nahb.org has information on their web site about the tax credit. Please consult a tax profession to be certian you qualify.

> 2008 Jumbo Agency loan limit of $729,750 has been restored for Monterey County. This may be the bigger boost to the Monterey housing market as the most recent Jumbo Agency limit has been $483,000. The “jumbo agency” loan category applies to “Fannie Mae,” “Freddie Mac” and “FHA” loan products. Guidelines and rates are similar to standard programs. These products will be a helpful boost to the mid-range housing market, i.e. $500,000 — $950,000. The $729,750 limit will be effective for the 2009 calendar year.

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1 March 2009 Carmel Real Estate Market Update

By mhodges | Published: February 28, 2009

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

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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.

Real Estate Market Chart by Altos Research www.altosresearch.com

Real Estate Market Chart by Altos Research www.altosresearch.com
 

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.

 

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Carmel River School Boundary Discussion

By mhodges | Published: February 25, 2009

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

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The Stimulus Package and its impact on Carmel, Pebble Beach, Carmel Valley

By mhodges | Published: February 16, 2009

Admittedly many of the homes that sell in Carmel, Pebble Beach, Carmel Valley and over the hill in Monterey and Pacific Grove are priced such that most buyers need a “jumbo” or “non-conforming” loan. “Jumbo” loans are the loan product that has been most changed by the current credit crunch. The cost of these higher principal loans is much higher and the hurdles that have to be overcome to be approved can be extremely tight.

Lenders used to make these loans to a home buyer and a short time later sell them to investors on the secondary market. The collapse in demand for these loans (turned into securities) has made lenders much less enthusiastic about lending.

“Conforming loans” on the other hand conform to government guidelines (set by the Office of Federal Housing Enterprise Oversight (OFHEO)) and can therefore be purchased by Fannie Mae and Freddie Mac, the two Government Sponsored Enterprises that are charged with facilitating the flow of credit.  Fannie and Freddie are continuously in the market for conforming loans. 

The Relevance To The Monterey Peninsula?

In 2008 the loan limits were raised to $729,750 for Monterey County. This allowed buyers to use conforming (less costly) loans to purchase higher priced homes. In January the loan limit for Monterey County reset to $483,000 while “high priced counties” reset to $625,500. Monterey was lower because of the high number of transactions in the Salinas Valley that pulled the median sale price for the year down.

Any increase in the conforming loan limits will be welcome news to buyers looking at $500,000 or more listings.

The First-Time Buyer Credit

 The bill also moves the first-time buyer credit up to $8,000 (from $7,500) and more importantly removes the requirement that it be paid back as long as the buyer stays in the home for at least three years. The credit is available for first time home buyers that purchase a home before the end of 2009.

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Pebble Beach AT&T—and How It Impacts Real Estate

By mhodges | Published: February 15, 2009

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.

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Zeppelin Ride—-A New Way to Look at Carmel, Pebble Beach Properties!

By mhodges | Published: February 5, 2009

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

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23 January 2009, Pebble Beach Real Estate Update

By mhodges | Published: January 23, 2009

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.

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Pebble Beach Golf Resort Discount

By mhodges | Published: January 1, 2009

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:

Golf Course Regular Price (with Cart) Discounted (with Cart)
Pebble Beach Golf Links $530 $375
Spyglass Hill $365 $185
Links at Spanish Bay $295 $135

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.

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True story of a Carmel Home Buyer

By mhodges | Published: December 21, 2008

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.

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November 2008 Home Sales Compared to 2007 in Pebble Beach, Carmel, Carmel Valley

By mhodges | Published: December 11, 2008

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.

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