Merrittâ€™s Market Update Monterey Peninsula December, 2012
ÂŠ2012 Merritt Ringer
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Famous architects dressed as their buildings in 1931.
Table of Contents
The Big Picture…………………….…….………... 3-4 Local Potpourri….……………………….………… 5 Financing………………………………….……….. 6 Carmel………………………………...….….…… 7-8 Carmel Valley…………………………..….……… 9-10 Pebble Beach………………………...……….…… 10-11 Pacific Grove…………………………….…….…..12-13 Monterey…………………………………....….…..14-15 Monterey-Salinas Corridor………………...……. 16-17 Seaside & Marina ………………………...……… 18-19 An Agents Life …………………...….…...…….…..20 End Note …………………………………………....21
Caveat: I’m no economist (despite the performance of most, this is not a boast). I also lack the gift of prophecy; from the evidence, I’m not alone. But our real estate market is buffeted and buoyed by all manner of larger forces, so I do watch the horizons. I also dig into our local market. The information here is as reliable as I can make it, but nothing like comprehensive. The opinions are just mine and only opinions.
THE BIG PICTURE I won’t bore you stiff with the “fiscal cliff”. You’ve heard enough. One thing that has slowed the recovery is new home construction and sales. Existing home sales parted ways with new homes in 2008 because the new could not compete with low-priced distress sales (the so-called “distressing gap”), as the chart below shows. But construction of new homes is a much more important driver of economic growth than resales. New home sales are inching upwards now.
Below is an interesting long-term chart. It shows how much equity Americans have had in their homes since 1952. While a wonderful view of big trends, it masks a couple important facts: a little over 30% of homeowners have no housing debt, so millions of homeowners are in good shape, while the 52+ million homeowners with mortgages have a lot less than the 45% equity suggested here. Meanwhile, over 10 million households still have negative equity.
LOCAL MARKETS POTPOURRI Short Sale Train Wreck Coming? The Mortgage Debt Relief Act, which allows short sellers to avoid taxation on their debt relief, will expire at year’s end This affects all of us. For the markets this magazine covers, 47% of all properties currently in escrow are short sales (they sit for months in the pending inventory, so you won’t see this ratio expressed in any one month’s new escrows). Over the past year, almost one out five actual Peninsula closings has been a short sale and they have ranged in price up to $3.450M. If the Act is not extended, we can expect that many owners will abandon their properties to foreclosure rather than selling short and facing an unaffordable tax liability. So . . . it’s in the hands of Congress. Feel better? *
The chart below shows all northern California’s falling inventory and undulating sales over 13 months. Falling inventory is a national trend.
Rates Rates fluctuate by the second and different lenders offer various packages, so the numbers below are just a snapshot. The rates below are for loans without points. Up to $417,000 30 year fixed: 3.375% 5/1 ARM: 2.675% Jumbo (over $483,000 here) 30 year fixed: 4% 5/1 ARM: 2.75% The addition of a point reduces the rate .125-.250%.
CARMEL: NEW ESCROWS Carmel saw 18 new escrows in November, a little lower than recent months but a solid performance for what has always been the onset of our slower season. Ten of the homes were listed over a million (& two others were listed at $995K), as the higher end continues to strengthen. Only one sale was bank-owned and there were three short sales
CARMEL CLOSED HIGH & LOW
This classic Carmel Point home on Isabella/Scenic, overlooking the Carmel River State Beach, offered 4BR/3Ba, almost 3200 sf and lots of charm. It came on the market at $6.195M and sold for just lower a million less at $5.175M.
The lowest priced sale in town (there was a $860K sale in Carmel Meadows) was this 2BR/2BA, 1,340 sf fixer on Monte Verde near 12th. It sold in 2007 for $1.425M. It came back on the market last year at $1.289M. The owner then lost it to foreclosure and the bank just sold it for $950K.
CARMEL VALLEY: NEW ESCROWS Volume in the Valley feel considerably last month, sliding 48% from the 27 new escrows in October (4 of which fell out, hence the lower number on the chart below) to a mere 14, the same volume as November of 2011. Of course, October’s surge was unusually strong for so late in the year. If we compare even the revised October + November totals for this year with the same months last year, we see a 28% increase, so I’m not inclined to read too much into November’s drop in volume. Only one new sale was listed over a million (for $1.295M), another swerve from October, when we saw lots of activity over a million. One of the new sales was bank-owned and 4 were short sales.
CARMEL VALLEY CLOSED HIGH & LOW
The Preserve captured top spot with this attractive contemporary 3BR/3.5BA, 5,070 sf home built 4 years ago and on 13 acres. It was originally listed in early 2010 for $5.495M. They eventually worked their way down to asking $4.250M and then accepted a million less to close at $3.250M.
This home on Val Vista, just east of the Village, had 3BR/2BA and 1214 sf plus pretty good mountainside views from its 2 acre parcel. It sold inside a week for cash at $514K.
PEBBLE BEACH: NEW ESCROWS Pebble Beach volume climbed by a third from the previous month to 12 escrows. The upper end of the market was especially lively, with 9 new escrows listed over a million. The highest successful list price was $3.595M on the corner 17 Mile Drive and Spyglass Hill. Not a single new escrow was a distressed sale.
PEBBLE BEACH CLOSED HIGH & LOW
Some homes have held their value. Perched on almost an acre over the 14th hole of the Pebble Beach golf course, with wide open ocean views, this 9,630 sf home with 5BR/8BA home sold for $10.750M in 2008, a date the normally spells trouble for sellers. It just sold for $10.583M, a loss but a tiny one.
This 2BR/1BA post adobe near the shore and the country club had 1,669 sf. It was sold in 10 days for its full list price at $750K.
PACIFIC GROVE: NEW ESCROWS
PG had 16 new escrows in November, a decent showing for late in the year. Not a single new sale was listed over a million. The highest priced successful property was at 905 Egan, with nice golf course & ocean views; listed at $979K, it sold in 10 days and closed inside 3 weeks for $916K. Only one new sale was bank-owned and 4 were short sales.
PACIFIC GROVE CLOSED HIGH & LOW Both our high and low sales in November sold over their asking prices.
This ocean view home on Balboa offered 3BR/2.5BA and 3,332 sf. It was extensively remodeled in a very contemporary way. It sold in 4 days just over the list price, closing at $2M even.
This townhome in Glen Heights had 3BR/2.5BA and 2,062 sf. It sold in 2006 for $950K. The owner tried to sell it unsuccessfully in 2008 and lost it to foreclosure. The bank listed it at $549.5K and it sold in 9 days for $100K more, closing at $650K.
MONTEREY: NEW ESCROWS
Another brisk month in Monterey with 28 new escrows. Only one, in Deer Flats, was listed, barely, over a million and 20 were listed under $500K. Monterey had just one bank-owned sale and 6 short sales.
MONTEREY CLOSED HIGH & LOW
A Craftsman on West Franklin, built in 1913 on almost half an acre, with 6BR/4BA and lots of regrettable wallpaper, but also bay views, claimed the top spot, selling for $1.250M.
This shack near Casa Verde looks the part of the lowest priced sale. It was a teardown on 6,098 sf lot that sold for cash (Iâ€™m sure no bank would lend) at $130.5K
MONTEREY-SALINAS CORRIDOR: NEW ESCROWS (east to San Benancio) The part of the corridor we watch 9 new escrows last month, a fair showing for late in the year. Four homes were listed over a million with $1.549M being the highest. A third of the new sales were bank-owned.
MONTEREY-SALINAS CLOSED HIGH & LOW
Pasadera claimed the top spot with this 3,440 sf home overlooking the 7th fairway. Last year, it sold for $910K. The new owners then did an extensive remodel and put it on the market at $1.295M. It just closed for $1.087M.
This 5BR/3.5BA home on San Benancio was the lowest priced sale. It had a checkered past, spending about 6 years total on the market at prices cascading down from $1.450M and passing from the owner to the bank along the way and also through the hands of 6 different real estate agencies. It finally sold for $351K.
SEASIDE & MARINA: NEW ESCROWS Seaside and Marina are, of course, very different cities. But buyers for one always look at the other, as well. So, Iâ€™ll combine them here and offer varied snapshots each month.
Marinaâ€™s sales volume slowed sharply to just 8 new escrows, 2 of them bankowned and 4 short sales. One reason for the lower volume may be plain lack of inventory: as I write, there are 5 homes available in all of Marina. Prices are going to go up.
Seaside went slightly nuts last month with 24 new escrows. 6 were bank-owned and 3 were short sales.
MARINA CLOSED HIGH & LOW
Right near Locke Paddington Park, this home was built in 2007 and had 4BR/3.5BA and 1,843 sf. It sold just over the list price for $417K.
A 2BR/2BA condo, also near Locke Paddinton Park, had 1,100 sf. It sold last year for $120K. This time it went UP in value, closing at $166K, another little sign that Marina is turning around.
An Agentâ€™s Life
Christmas celebration in Carmel Plaza right after the lighting of the big Christmas tree. If youâ€™ve never attended, you should: a very festive, village affair.
Thank your for taking a few minutes with my e-magazine. Your comments & questions are welcome. Let me know about issues you’d like to see addressed here or stories and facts you’d like others to know. Know anyone thinking of buying or selling, someone who would benefit from informed & straight counsel? Please keep me in mind. Referrals like yours are the heart of my practice.
© Merritt Ringer 2012
Merrittâ€™s Market Update
ÂŠ2012 Merritt Ringer