Market Hot But Is It Cooling? -3rd Quarter Report 2016
Paul Brocchini & Mark Ryan
Most years the second quarter is the strongest period of the year in all of the key real estate categories: dollar volume, total transactions and price. This year the third quarter was almost as good as the second, only eight fewer sales and $4 million less in volume. On the whole it was a rousing quarter.
It is hard to get a good fix on median sales prices as they jump around so much due to the small size of the databases. Seven of the eight markets surveyed had healthy price gains over last year. Only Carmel-by-the-Sea had a lower median sales price. Looking back to the second quarter of the year the Carmel-by-the-Sea median sales price was an out-of-sight $1.8 million. The relatively low third quarter number is an anomaly which will be balanced out when we have a full year of numbers, which we will have in our next report.
The Market Barometer plants the seeds of doubt going forward. The high end markets of Carmel-by-the-Sea, Carmel Area, Carmel Highlands and Pebble Beach have low Barometer numbers reflecting a growing inventory of unsold properties.
It is nothing to get excited about yet. The year-to-year inventory growth in the eight surveyed markets was 32 properties, an eight percent gain over last year. Still, it is worthy of our attention, and we will keep an eye on it.
In our last report we noted how much prices had gone up this year in contrast to last year’s hot market but essentially flat prices. The question one must ask now is: have they risen too far too fast? Overly ambitious asking prices eventually dampen or even kill rising markets.
The Amazing and the Surprising
A source of continuing amazement is the percentage of sales over one million dollars. In the quarter, 115 of the 286 transactions exceeded one million dollars, an impressive 40%. Sixty eight per cent of the sales in Carmel-by-the-Sea topped one million. In the Carmel Area it was 73%, Carmel Highlands 100% and Pebble Beach 91%.
It is probably time for us to cease to be amazed and realize that this is the new reality around here.
The surprise is Seaside, a major investment opportunity during the collapse. The
median sales price jumped to an unexpected $500,000. Behind that surprising figure was tremendous action in Seaside Highlands, an area that was next to dead during the down turn. It is percolating now as it is a neighborhood where families can find homes of sufficient size to accommodate them for under the dazzling million dollar figure.
As we move into a slower period of the year we do not see any great changes on the horizon. There may be a correction in the wind but at this point it is still a hint, not a certainty.
Paul Brocchini and Mark Ryan are real estate agents with Carmel Realty Company, NE Corner of Dolores & 8th, Carmel-by-the-Sea. They can be reached at either 831-238-1498 or 831-601-1620.
The charts are based in whole or in part on data supplied by MLSListings.com, our Multiple Listing Service (MLS). Neither the Monterey Association of Realtors nor the MLS guarantee or is responsible for their accuracy. Data maintained by the MLS may not reflect all real estate activity in the market.
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