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Merritt’s Market Update Monterey Peninsula SEPTEMBER, 2012

©2012 Merritt Ringer


Read & Heard After our trip to France a couple months ago, this seems spot on:

Ilovecharts


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 While the job market sputters along, a little better, a little worse, a rather dramatic deleveraging has been occurring. Much of this is due to foreclosures and short sales, not to people making good incomes and paying off debt. The chart below shows both the improvement and the distance we may have to go.

Home sales and home prices have been up a little in most markets recently.


DISTRESSED PROPERTIES Most of the Monterey Peninsula has seen a big decline in distressed sales. While the national numbers are improving, however, they remain pretty high: 1,960,000 loans less than 90 days delinquent. 1,560,000 loans 90+ days delinquent. 2,042,000 loans in foreclosure process. 5,562,000 homes delinquent or in foreclosure. Meanwhile, millions are still paying their mortgages but are upside down:


PRICES

The chart below shows average per square foot home sales prices on the Monterey Peninsula since the early days of the downturn. I left out Marina & Seaside because they’ve witnessed such a torrent of foreclosed homes in rotten condition that they would have skewed the numbers downward. This graph gives a good overview of what has happened to prices generally in our area.


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: 3.5% 5/1 ARM: 2.5% Jumbo (over $483,000 here) 30 year fixed: 4.625% 5/1 ARM: 3.5% The addition of a point reduces the rate .125-.250%.


CARMEL: NEW ESCROWS

We could feel it all month; now the numbers confirm it: the Carmel market shifted gears in August: 30 properties went into escrow. For perspective, that’s about double what we saw during our journey through the valley of the shadow. All price ranges participated, from $349.5K to $3.995M; 12 sales were over a million and 4 of them over $2M. 3 homes were bank-owned and 3 were foreclosures (there was a time when half the new escrows in Carmel were distressed sales).


CARMEL CLOSED HIGH & LOW

This pleasant home with about 3,800 sf and ocean views, was built in 2006 on Casanova between Ocean & 4th. It sold in 2007 for $4.4M. Now, after about a year and a half on the market at different prices, it closed for $3.485M.

This 1/1 on Torres off 5th was new construction when seized from the builder by the bank . It sat on the market with 3 fellow condos for 712 days until they all sold in a package for a substantial discount. This one was originally asking $849k; it closed for $400k.


CARMEL VALLEY:

The Valley had 16 new escrows in August, quite a slow down from the 26 we saw in July. Only one of them was above a million, barely. Two sales were bankowned and three were short sales. The thinness of sales over a million last month was striking. The average list price for houses in Carmel Valley was $2.117M; the average closing price in August was $1.019M, quite a spread.


CARMEL VALLEY CLOSED HIGH & LOW

A 6,700+ sf 8 year-old hilltop beauty in Quail Meadows. This home was on the market for a year, took a few months off, then returned for 139 days. At first, they asked $4.750M; they closed for $3.850.

The 6 least expensive sales last month were in Hacienda Carmel. This 840 sf 2 bedroom/ 1 bath condo fetched $220k.


PEBBLE BEACH: NEW ESCROWS Pebble had 8 new escrows last month. Half were under a million but two were over $7M, including one over $12M. Only the lowest priced home, at $680k, was a short sale.


PEBBLE BEACH CLOSED HIGH & LOW

Padre Lane was the site of this set piece straight out of Downton Abbey. At 8,800+ sf., it was a tad small for a miniseries; but its sale was no extended drama, either. It came on at $9.375M and sold in 25 days for $8M.

The least expensive house sale last month was a bank-owned one on Congress. It had 2,300+ sf. In 2007, it sold for $1.190M; as a REO, it closed for $676k.


PACIFIC GROVE: NEW ESCROWS

A brisk month in PG with 23 properties going into escrow. Four of the homes were over a million, including on at $2.1M on Ocean View Blvd. We saw 7 short sales but not any bank-owned properties.


PACIFIC GROVE CLOSED HIGH & LOW

At just over 2000 sf, this playful home was oceanfront on Ocean View Blvd. It sold in 2007 for $1.8M. This time, it fetched $1.6M.

Apparently, the listing agent thought the garage door was the best feature of this Del Monte Park condo. It had 2 bedrooms / 2 baths and 1245 sf. It closed for $330k.


MONTEREY: NEW ESCROWS

Monterey slowed a bit, but not much, clocking in at 24 new escrows. One, on Alta Mesa, was over a million but 22 were below $676k, dwindling right on down to an unsafe shack for $145k. We saw 6 short sales enter escrow and one bank-owned.


MONTEREY CLOSED HIGH & LOW

This interior shot gives a better feel for this home than the agent’s main photo of stairs wandering up a hillside into bushes. A 3,450 sf ocean view home built in 2008 in the Monte Vista area, it closed for $1.6M.

1 bedroom, 1 bath, this little fixer bungalow was between Peter’s Gate and town. It sold in just over two weeks for a bit above the asking price: $340k.


MONTEREY-SALINAS CORRIDOR: NEW ESCROWS (east to San Benancio) The corridor saw 16 new escrows, little different from the previous month. But the price level moved up as 4 homes were over a million and one of them was just above $2M. Four were short sales and two were bank-owned, roughly in keeping with what has been the norm.


MONTEREY-SALINAS CLOSED HIGH & LOW

A Pasadera short sale took top spot last month. With 6 bedrooms, 8 baths, over 5800 sf on ten acres, this 11 year old home offered a lot. Originally listed at $2.8M, it eventually sold for $1.750M.

San Benancio Road had the lowest priced sale last month. With 4 bedrooms, 3 baths, over 2,400 sf on almost 2 acres, this home had been updated and even had a bonus 600 sf cottage not in the square footage above. It sold for $425k.


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 Our market ticked up slightly with 17 new escrows, ranging from a $189k condo, which got an avalanche of offers, to a home asking $460k. Distressed sales continued to be a large part of the market with 9 short sales & 2 bank-owned.

Seaside This market had 14 new escrows, down by a third from July for no obvious reason. 5 were short sales and 2 bank-owned.


MARINA CLOSED HIGH & LOW

As so often, Seaside Highlands, had the highest sale. 8 years old, over 2,400 sf, with some upgrades, this was a bank-owned sale on Peninsula Point. It drew multiple offers and closed at $568k, a little over the asking price.

Another Peninsula Point, this time in Marina, had the lowest priced sale. This 2 bedroom, 2 bath condo sold for $152k.


An Agent’s Life

Not my picture: I didn’t have a camera when I saw an amazing display out to sea a couple weeks ago. Off Carmel Point, one sunny afternoon, I witnessed thousands of black birds streaming up from the south to swarm a massive school of fishes . . . while eleven large whales spouted, rolled and loitered alongside.


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 Peninsula Market Update: September 2012