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Merritt’s Market Update Monterey Peninsula March, 2012

Š2012 Merritt Ringer


Read & Heard

“D’you sometimes believe that nothing in the whole world matters?” “Oh, Ann, but surely simply everything has supreme importance, if it happens.” From Henry Green’s Doting

It’s not true that life is one damn thing after another it’s one damn thing over and over. Edna St. Vincent Millay


Table of Contents

The Big Picture…………………….…….………... 3 Distressed Properties……………….…….………... 4 Prices…………………………………….………… 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 BIG PICTURE As oil prices rise, here’s a reminder that the implications aren’t exactly what they once were. Still, it’s a headwind we could do without.

Unemployment claims continue their descent.


DISTRESSED PROPERTIES The San Francisco assessor examined over 400 foreclosures, the first rigorous look at foreclosure practices in California, and found that 84% (!) involved violations of the law; and 67% had at least 4 violations. Because few of our foreclosures require judicial review, few have had close scrutiny until now.

The chart below shows the moderating - but still elevated - delinquency rates for two of the most common types of mortgages.

The best estimates hold that 5.8 to 6.1 million homeowners are delinquent or in the foreclosure process. Meanwhile, 27.8% of mortgaged homes are underwater and this number has been rising as national prices continue to decline.


PRICES Nationally, real home prices (adjusted for inflation) are at, or a bit below, where they were in 1999. “Lost decade” sounds dramatic, but we have now spent over a dozen years making a round trip.

So far, our Peninsula has largely tracked the national averages. It remains to be seen whether the unusual affluence and demographics of our buyers will trigger a departure from national trends. As you read ahead, you’ll see that local activity is up noticeably.


FINANCING

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: 3.875% 5/1 ARM: 2.875%

Jumbo (over $483,000 here) 30 year fixed: 4.250% 5/1 ARM: 3%

The addition of a point reduces the rate .125-.250%.


CARMEL

February rocked: 30 new house escrows (plus, 3 condos)! Despite being a shorter month, this is well above recent norms. The chart below shows the pokey pace to which we’ve been accustomed (it covers only houses, not condos). Last year, we saw an early lift, also, but this time was much more pronounced.

Ten of the sales were distressed, split 50/50 between bank-owned and short sales. 13 sales were asking over a million.


CARMEL CLOSED HIGH & LOW

Yes, the highest priced closing of last month had dinky photos on the MLS. You may not recognize this home since the agent did not photograph the handsome and familiar faรงade from Scenic and there was no sign. This beauty was a towering Mediterranean overlooking the beach and ocean, 4 doors south of 8th. Originally listed at $15M, it closed for $8.1M.

On Flanders, just east of Hwy 1, this 1727 sq. ft. 3 bed/2 bath home closed at $470,250. In 2007, it sold for $995K.


CARMEL VALLEY

Carmel Valley had 12 new escrows last month (including 2 condos). 7 of the new sales were distressed properties, 4 bank-owned and 3 short sales. The top quarter of new sales had asking prices ranging from $900K to $995K. The Valley was a bit out of step with the rest of the Peninsula, where new escrows rose quite a bit.

The chart below offers historic perspective (note that it covers only houses, not condos).


CARMEL VALLEY CLOSED HIGH & LOW

One Phelps Way, this 3,960 sq. ft. 4 bedroom/3 bath beauty on an acre started by asking $1.495M and, after a price change, closed at $1.325M.

A home on Dorris, behind the Mid-Valley shopping center, with 4 beds/3baths, was a short sale and fetched $525K, well above the asking price of $485k. It sold in 2007 for $939K.


PEBBLE BEACH Pebble enjoyed a lift in February as 15 houses and a condo went into escrow. While not as dramatic as Carmel’s surge, the chart below (which covers houses but not condos) shows that this is roughly 50% better than recent history. Four of these sales were bank-owned, including one listed at $1.749M (not all foreclosures are at the low end). One was a short sale.


PEBBLE BEACH CLOSED HIGH & LOW

$6.750 bought this single-level 7,000 sq. ft. home on 17 Mile Drive, near the Lodge. It had 5 bedrooms/7 baths & a 9-car garage. They started their journey to a sale back in 2008, asking $16.750M (sic.); it’s not often we see a $10 million drop from asking to sales price.

$535K was the closing price of this short sale on Larkin Road.


PACIFIC GROVE PG soared to 31 new escrows, almost double January’s and way above the teens in which we’ve been stuck these many months. Sales occurred across the spectrum, ranging from $309.9K to $1.575M. (asking prices).

Six of the new escrows were short sales and 2 were bank-owned.

The chart below offers historic perspective (note that it covers only houses, not condos).


PACIFIC GROVE CLOSED HIGH & LOW

This handsome home on Balboa featured ocean views and had 3 bedrooms/ 2 1/2 baths in 2294 sq. ft.. It closed for $1,185K. They started at $2.295M and took 508 days to march through 9 price adjustments before they sold.

This unfinished project on Spruce was a foreclosed property that sold for $288.5K.


MONTEREY Monterey had 30 new escrows last month (including 8 condos). This was a big rise over recent months. Prices spread from a Glenwood Circle condo for $189K to a home on El Dorado at $2.750M (both asking prices).

Four sales were bank-owned and 7 were short sales.

The chart below offers historic perspective (note that it covers only houses, not condos).


MONTEREY CLOSED HIGH & LOW

This 3 bedroom/2 1/2 bath Harrison Street home had 1,915 sq. ft. and closed for $663K

A humble abode on Airport Rd with 2300 sq. ft. and 3 beds/2 baths was bankowned and closed for $240K.


MONTEREY-SALINAS CORRIDOR (east to San Benancio) The corridor (to San Benancio) had 6 new escrows, with asking prices ranging from $489K to $2.947M,

One new sale was bank-owned and one was a short sale.

Current databases give me few choices for charting the geographic area I cover here (most graphs include lots of the Salinas market). So, this graph is not of closed sales, not new escrows.


MONTEREY-SALINAS CLOSED HIGH & LOW

San Benancio Rd. had the highest closing at $699K. This 4 bedroom/3bath home had 3,316 sq. ft. and sat on an acre. It had a solar-heated pool, a tennis court, and artist’s studio. It sold for $1.525M back in 2005.

This 3 bedroom/2 bath home off San Benancio sold for $300K.


SEASIDE & MARINA Seaside and Marina are, of course, very different cities. But buyers for one always look at the other, as well. So, I’ll combine them here and offer varied snapshots each month.

Marina combined with Seaside to rack up 38 new sales. Nine were bank-owned and 17 were short sales. Just 2 sales were condos. Half the sales were in Marina and half were in Seaside.

Below, for historical comparison, is a chart of sales (pended) for Seaside.


MARINA CLOSED HIGH & LOW

The bank owned this home on Sirena Del Mar in Marina. It had 4 bedrooms/3 baths in 2,129 sq. ft. and sold for $382K. Unlike some homes in other parts of the Peninsula, which have dropped millions, this wasn’t so much lower than its 2002 price of $445K.

An unprepossessing 2/1 short sale on Mortimer Lane closed for $175K.


An Agent’s Life

February-by-the-Sea

Some days, an agent’s life is like this: sunny skies and calm seas with just enough white water to add interest.


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


Merritt’s Market Update March, 2012

Š2012 Merritt Ringer


Merritt's March Update