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Merritt’s Market Update Monterey Peninsula November, 2012

Š2012 Merritt Ringer


Read & Heard

Happiness is neither virtue nor pleasure nor this thing nor that, but simply growth. We are happy when we are growing. ~ William Butler Yeats

You will become way less concerned with what other people think of you when you realize how seldom they do. ~ David Foster Wallace

Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that's creativity. ~ Charles Mingus


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 how most have performed, 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 A retrospective glance at the impact housing had on our national slump. The chart below estimates the downdrafts from drops in residential investment, consumption supported by all that home equity we once had, and by cash pulled out of mortgage refinancing: each factor pulled almost a percent off GDP

This chart actually understates the downdraft by ignoring dimensions like the positive ripple effects of construction in the job market and how the impact of the downturn on bank balance sheets affected (which has slowed our recovery). .


DISTRESSED PROPERTIES The number of foreclosures is falling nationwide. San Francisco saw a decrease of 36% from a year ago. But we still have some distance to travel. From 2000 through 2006, the nation averaged 21,000 homes lost to foreclosure per month; this September, the number was still 57,000.

One reason foreclosures are down is because short sales are up: distress by another name. Nevertheless, the overall picture is one of gradual improvement.


PRICES Are sales prices starting to rise? It is too soon to be sure. In tract markets, with maybe six types of home, it’s easy to compare last year’s sales with today’s to see changes. Our diverse housing dooms such efforts. And the sample of homes that sold last year and just resold is still too small to be a reliable guide. I once analyzed 100 homes that sold in 2004-06 and then resold in 2011: the average price decline was about 32%. Until we have a big enough sample of resales, we can only use proxies. Median prices are unreliable with small samples but the chart below is a big one: the entire Peninsula except Seaside and Marina (outliers due to their volume of distressed sales). This chart shows median prices rebounding from the lows. It’s only a suggestion; but it’s a positive one.


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: 3.375% 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 24 new escrows graced the activity boards last month. The transactions pretty much spanned the whole range of our market from a house listed at $499k to one at $3.195M. Ten of the homes were over a million. In a switch from recent trends, a third were distressed sales: 3 were short sales and 5 were bank-owned.


CARMEL CLOSED HIGH & LOW

A delightful Carmel Point home captured top spot last month. With 3BR/4.5BA, this whimsical 3000 sf home, built in 1920 and remodeled in the ‘90s, closed for $3.4M.

The photo shows the view from our most affordable sale last month, a 2BR/3.5BA two-story condo at Arroyo Carmel. In 2008, it sold for $645K. Those buyers lost it to foreclosure and the bank just sold it for $500K.


CARMEL VALLEY: NEW ESCROWS The Valley is catching fire with 27 new escrows last month. Ten of these sales were listed over a million (the most expensive, a $5.495M home in Tehama might be considered just outside the Valley, but the MLS includes it). The level of distressed sales also continues to moderate with only 4 short sales and none owned by banks.


CARMEL VALLEY CLOSED HIGH & LOW

Prado del Sol had last month’s highest sale. This 3BR/2.5BA home offered 3,870 sq. ft. and a flat acre of land. Originally listed at $2.925M, it took a year & a half, and several price adjustments, to close for $1.760M.

Hacienda Carmel offered the most affordable housing last month. This 625 sf 1BR/1BA condo sold for $275K back in 2004; this time, it was a short sale and closed for $180K.


PEBBLE BEACH: NEW ESCROWS Pebble saw just 9 new escrows last month. Four were listed over a million (but one, listed at $1.1M, has already closed for $965K). Not even one transaction was a distressed sale.


PEBBLE BEACH CLOSED HIGH & LOW

A townhome at Spanish Bay claimed top spot last month. This 3BR/3.5BA home had over 3400 sf. It sold almost instantly at full price: $2.179M.

A condo at Ocean Pines, the marketing of which is fairly represented by this MLS photograph, was the lowest sale. It was a 3BR/3BA place with almost 2000 sf. After a bit over a year on the market, it closed for $490K.


PACIFIC GROVE: NEW ESCROWS

PG had 21 new escrows last month, with successful asking prices ranging from $369K to $919K. Refreshingly, only one was a distressed sale: a single short sale on Junipero.


PACIFIC GROVE CLOSED HIGH & LOW

Spazier gave us our highest sale. Just over 2400 sf, this 4BR/2BA sharp home sold in one day for full price: $1.255M.

This was not quite the lowest sale (which was $19k less on Walnut) but I note it because it also was on Spazier.. At 1287 sf, it has 2BR/BA. It sold a year and a half ago for $545K and was little changed but for appliances. In another sign that our market is improving, it closed for $614K.


MONTEREY: NEW ESCROWS

Monterey saw 18 new escrows last month (I have no idea why the chart below, usually so accurate, shows 16). Only one, on Alta Mesa, was listed over a million. While there were no bank-owned sales, we did see 9 short sales; so, half our new transactions were distressed sales.


MONTEREY CLOSED HIGH & LOW

Unobstructed ocean views across Monterey State Beach made this La Playa condo last month’s high-priced seller. Starting at $995K, it took this 2BR/3BA unit 213 days to reach escrow. It closed at $793.450K.

Another condo, on Casanova, locked in the lowest priced sale. This 2BR/1BA 860 sf condo sold for full price at $117.5K.


MONTEREY-SALINAS CORRIDOR: NEW ESCROWS (east to San Benancio)

Our section of the corridor saw 11 new escrows last month. Six of these sales were over a million, ranging up to a home listed at $3.698M in Monterra; three of these six, however, were distressed sales. We saw a total of 6 distressed sales: two bankowned and 4 short sales.


MONTEREY-SALINAS CLOSED HIGH & LOW

This 5BR/5BA home at Pasadera had 5,000 sf was on a 5 acre lot (a whole lot of 5s). It was on and off (mostly on) the market since mid-2007, starting at $3.65M. It finally closed for $2.3M.

In The Meadows, off Corral de Tierra, this 4BR/3BA home had 2,329 sf. It sold for $600K.


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, I’ll combine them here and offer varied snapshots each month. Marina saw 17 new escrows last month: 7 short sales and 3 bank-owned.

Seaside had19 new escrows in October: one bank-owned and 5 short sales.


SEASIDE & MARINA CLOSED HIGH & LOW

Seaside Highlands, as usual, claimed the highest sales price last month. With 2,465sf, this 4BR/3BA home sold for $570K in 2010. It just sold again for $565K, a slight loss for the owners but another sign that our market is stabilizing.

A 2BR/1BA condo in Marina was the most affordable sale last month. It was a short sale and closed for $122.5K.


An Agent’s Life

It’s not the invasion of the aliens but an odd phenomenon I’ve noticed when I get to the office early most mornings. Just before daybreak, hundreds of crows stream up Junipero in an aerial torrent that lasts longer than I’ve been willing to hang around and watch. Where are they coming from, where are they going? Ornithologists?


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

Š2012 Merritt Ringer


Merritt's November Peninsula Market Update