News SECOND QUARTER 2005 REPORT First Published in The Carmel Pine Cone July 2005

Contents Market Barometer Median Sales Prices Gross Dollar Volume Sales by Quarter Distribution of Sales

Market Begins to take a Breather


Second Quarter Report

The market is still amazing just not to the degree that first quarter augured. Dollar volume was $477,208,000, the second highest in history surpassed only by the second quarter of 2004 which topped $500 million in sales.

Dollar Volume Digging into this number we find that the big money markets of Carmel, Carmel Valley and Pebble Beach were all down in comparison to the Second Quarter of 2004 by 32.8%, 9.6% and 33.6% respectively. Big dollar volume gains in Marina, Seaside and the Salinas/Monterey Highway largely offset these losses. The overall percentage decline was only 9.3%. Unit sales, 393 for the quarter, were down 17.6% from last year with the largest declines in Carmel, down 42.4%, and Pebble Beach, off 38.6% Prices The "breather" in action has had no effect on prices. So far, they are maintaining their relentless climb to the stratosphere. The median sales price in every market, except South Coast, was up in the second quarter over the first quarter. In comparison to the second quarter of 2003 we find that Carmel is up 23.5%, Carmel Valley up 8.9%, Marina up 25.5%, Monterey up 13.6%, Pacific Grove up 16.8%, Pebble Beach up 22.5%, Salinas Highway up 29.3% and Seaside up 24.5%. Supply needs to begin to outstrip demand for prices to soften. Even if that begins to happen it will take a while for a price correction to set in. Sellers are quick to understand value increases and take advantage of them. They are slower, on the other hand, to react to declining markets. It is not easy for owners to give up on perceived gains when reality changes Given the nature of our market, little or no growth in housing, an attractive retirement and second-home community and the depth and wealth of the Baby Boomer generation, a significant downward price correction seems unlikely. There will be too many people and too much money chasing our scarce properties to allow a substantial price decline. A flattening of the incredible upward spiral, however, appears likely. A sign that the price surge may be easing in our immediate future is found in the inventory numbers. On April 1, there were 378 active listings without sales contracts. By July 1 that number had grown to 451 active listings, an increase of 19.3%. The number of non-pending listings in Carmel grew from 61 on April 1 to 101 on July 1, an increase of 66%. If the inventory continues to build the leveling of prices that we foresee should happen. We will be watching this and reporting on it. Distribution of Sales The distribution of sales chart is a dramatic illustration of just how expensive Monterey Peninsula real estate has become. Of the 393 closed transactions in the second quarter only five were under $500,000, and all of those sold in the $400,000 range. A mere 21 sales were under $600,000. One hundred thirty five sales topped $1,000,000 and another 43 were $2,000,000 or more. The million dollar plus sales accounted for 45% of the closed deals during the quarter.

The Northern Jewel

It appears that in these reports we popularized the term Golden Rectangle for the Carmel area from Dolores to Scenic and Ocean Avenue to Santa Lucia. Inasmuch as many of our buyers are from out of town, it is natural that the Golden Rectangle is often on the top of their dream list. South of Ocean Avenue and on the beach is where most visitors end up. When they decide to buy here, that is where they want to be.

What the uninitiated buyer does not know is that Carmel has many attractive areas each of which has its own charm. Good examples are Carmel Woods, the area near the Forest Theater and Hatton Fields. One area we find attractive is north of Ocean Avenue from Lincoln to San Antonio. We have longed called this area the Northern Jewel. It has the major attributes of the Golden Rectangle - near town and beach - with less traffic. The tourist traffic in Carmel, whether on wheels or foot, tends to migrate south of Ocean Avenue.

This extremely attractive area on average can be purchased for a bit less than comparable Golden Rectangle properties. For example, in the second quarter the median sales price of the 19 properties sold in the Northern Jewel was $1,600,000. The highest priced home sold for $3,286,000.

In the Golden Rectangle the median sales price during the quarter (excluding properties on Scenic Rd. which is a market unto itself) was $2,250,000, and the highest sale was $4,500,000.

There are many Carmels, and the Northern Jewel is one example of an exciting alternative to the South of Ocean Avenue mystique.

The charts are based in whole or in part on data supplied by the Monterey County Association of Realtors' Multiple Listing Service (MLS). Neither the Association nor the MLS guarantees or is responsible for their accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market.

Please Call Us

We have lived on the Monterey Peninsula since 1978 and in the heart of Carmel since 1986. We know the market and have deep experience assisting both buyers and sellers.

Many of our buyers are from out of town and before they act they need to gain an understanding of our local market. If you are an out-of-town buyer, you are extremely dependent on your agent for guidance. We are skilled at assisting you up the learning curve so that you can make sound decisions. The way we prosper is by putting our buyers into good, solid situations.

We know the market and would be happy to evaluate the value of your house at no charge. We know how to help you get ready for market to get the best price for your property. Selling a property is a cooperative effort between the seller and his or her agent. We will guide you on the team approach to success.

Please email us, call us at 831-622-4642, or write us at PO Box 350, Carmel, CA 93921.