4Q2017 Market Update

4Q 2017 Market Update Presented by Canning Properties Group

CanningProperties.com | team@canningproperties.com Sotheby's International Realty | DRE# 00899496

Presented by Canning Properties Group 2017 finished strong with 390 closed escrows across Carmel, Pebble Beach, the Carmel Highlands, Quail Meadows and the Preserve, which is the highest level seen in over a decade and almost twice the deal activity seen in 2009 (202). The increased activity was driven by a spike in the $1-2M bracket, which had a 23% increase over last year. Somewhat surprisingly, the top of the market slowed considerably this year with only 6 sales north of $8M (2016 saw 13) and the top sale of the year came in at just $12.75M, the first time since 2011 that nothing sold over $13M. Activity surged in the fourth quarter with 109 sales over the key regions, which is 42% higher than the seasonal average. Carmel was particularly strong with 58 sales, surpassing the 50 last quarter and 40 seen in 4Q2016. Pebble also finished strong with 40 closed sales, up a notch from last quarter, but 43% over 4Q16. As inventory levels continue to tighten, we anticipate prices increasing in 2018 and have seen an uptick in showings for listings above $10M, so that market is poised to rebound as well.

Market Overview Pebble Beach Carmel Carmel Highlands Quail/ Santa Lucia Preserve

4-5 6-9 10-13 14-15 16-17

Featured Property Photo: 3290 17 Mile Drive, Pebble Beach

No. 1

No. 1

Sotheby's International Realty Team in Carmel

Real Estate Team on the Monterey Peninsula

No. 3

No. 4

Sotheby's International Sotheby's International Realty Team in Realty Team California Nationwide

*Source: 2017 THE THOUSAND by REAL Trends / The Wall Street Journal

Mike Canning DRE#01004964 831.596.1171 mike@mikecanning.com

Jessica Canning DRE# 01920034 831.238.5535 jessica@canningproperties.com

Ellen Krausse DRE# 02046046 831.204.2204 ellen@canningproperties.com

Nic Canning DRE# 01959355 831.241.4458 nic@canningproperties.com

Natalie Pitschke DRE# 02041776 831.521.7363 natalie@canningproperties.com

Market Insight

All Regions

Quarterly byREGION Region QUARTERLY Sales SALES BY QUARTERLY SALES BY REGION

120

120

100

100 80

Total Sales

Total Sales

80 60

60

4040 2020 00

1Q2016 1Q2016

2Q2016 2Q2016

3Q2016 3Q2016

4Q2016 4Q2016

1Q2017 1Q2017

2Q2017 2Q2017

2016 2016

3Q2017 3Q2017

4Q2017 4Q2017

2017 2017

Carmel Carmel Carmel Highlands Pebble Beach Preserve QuailQuail Quail Pebble Beach Carmel Highlands Pebble Carmel Preserve Carmel Highlands Beach Preserve

Sales Price Range

4Q16 Sales

4Q17 Sales

2016 Sales

2017 Sales

<$1.0M

14

19

71

52

21

83

$1.0M-$1.5M

13

24

88

103

18

76

$1.5M-$2.0M

14

28

65

85

14

53

$2.0M-$2.5M

12

11

38

41

7

29

$2.5M-$3.0M

5

6

23

29

3

18

$3.0M-$4.0M

10

7

44

39

6

25

$4.0M-$6.0M

4

7

15

26

4

17

$6.0M-$8.0M

2

6

6

9

2

5

$8M+

3

1

13

6

1

6

Total Sales

77

109

363

390

77

313

4 | Market Overview

10 Year Ave. 10 Year Ave. 4Q Sales Annual Sales

4Q17 Update All Regions

4Q2017 $8M+ Sales by Price Range $6.0M-$8.0M $8M+ $4.0M-$6.0M

1

$6M - $8M

6

$4M - $6M

7

$3M$2.5M-$3.0M - $4M

7

$2.5M - $3M

6

$2M - $2.5M

11

$3.0M-$4.0M

$2.0M-$2.5M

$1.5M-$2.0M $1.5M - $2M

28

$1M$1.0M-$1.5M - $1.5M

24

<$1M

19

<$1.0M

Median Sales Price ($M)

Total Annual Sales TOTAL ANNUAL SALES 450

4Q17

Area

YoY % Change

$1.67

Carmel

-9%

$2.16

Carmel Highlands

-20%

$1.66

Pebble Beach

-4%

$1.82

Quail/Preserve

15%

390

400 350 300 250 200 150

Average Sales Price ($M)

100 50

4Q17

Area

YoY% Change

$2.00

Carmel

-8%

$3.66

Carmel Highlands

12%

$2.52

Pebble Beach

-29%

$2.12

Quail/Preserve

16%

0 2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Information believed to be reliable as obtained from the Monterey County Association of Realtors database and known off market transactions.

Market Overview | 5

Pebble Beach Market Overview

Pebble finished the year on a strong note - well above seasonally adjusted averages (26.6 sales). The number of closed sales in 4Q increased slightly over Q3 (40 and 38 respectively).

Total annual sales (143) rose 10% from â&#x20AC;&#x2122;16, while total dollar amount ($326M) dipped 12%, primarily due to a slowing at the top of Pebbleâ&#x20AC;&#x2122;s market.

One of the bright spots for Pebble was the $1.5M-$2M price bracket, which had a banner 4Q and year - posting its highest totals on record with 12 sales in 4Q and 26 sales for the year.

The $6M-$8M price bracket also shined this year with 5 sales (3 sales in 4Q), besting the previous record (4 sales) set in 2004.

The MPCC area carried its momentum through 4Q, leading all areas in sales (23) as demand near the Country Club remains strong. Sellers in this area continue to benefit from this demand with homes selling in just 68 days (lowest average DOM since 3Q10).

4Q17 Top Pebble Beach Sales 1231 Padre Lane 3353 17 Mile Drive 3225 Macomber Drive 1285 Padre Lane 3195 Palmero Way 1152 Signal Hill 1520 Venadero Road 1267 Padre Lane 1021 Matador Road 3180 Bird Rock Road

$12,500,000 $7,500,000* $6,900,000 $6,647,500* $5,800,000 $5,600,000 $4,650,000* $3,610,000 $3,250,000 $2,995,000

*Represents a Canning Properties Group Sale

6

Featured Property Photo: 1552 Cypress Drive, Pebble Beach

4Q17 Update

Sales & Inventory | 4Q2017

Pebble Beach

SALES & INVENTORY| 4Q2017

Active

Pending Pending

4Q17 SalesDOM

Active

4Q17 Sales

DOM

377

30

350

284

Get Smart

81

1 2

7

Average Days on Market

40

4Q17 Snapshot

4.3%

3 1 6

3 1 4

250

1 2

200

13

100

$8M+

3 1 3

$6.0M-$8.0M

98

13

2 2

$4.0M-$6.0M

12

<$1.0M

0

70

154

$3.0M-$4.0M

5

1 5

111

211

175

1

$2.5M-$3.0M

8

$1.0M-$1.5M

10

2

$2.0M-$2.5M

7

15

300

12

$1.5M-$2.0M

20

150

Avg. Days on Market

Properties

25

400

50 0

Units Sold

off list price

Annual Sales by Price Range Annual Sales by Price Range 2017 2017 2016 2016 2015 2014 2013 2013

00 <$1M

20 $1M - $1.5M

40 40 $1.5M - $2M

60 60

80 80

100

Sales by Price Range $2M - $2.5M $2.5M - $3M $3M - $4M

120

140 140

$4M - $6M

$6M - $8M

<$1.0M

$1.0M-$1.5M

$1.5M-$2.0M

$2.0M-$2.5M

$3.0M-$4.0M

$4.0M-$6.0M

$6.0M-$8.0M

$8M+

160 $8M+

$2.5M-$3.0M Pebble Beach | 7

Quarterly Region QuarterlySales Sales byby Region Central Pebble Beach

MPCC

Upper Forest

30 25

Sales

20 15 10 5 0 1Q2016

2Q2016

3Q2016

4Q2016

2016

2%

1Q2017

2Q2017

3Q2017 2017

decrease in Inventory

$100.1M Total $ Volume 4Q17

Get Smart

4Q17 Snapshot

43%

increase over 4Q16 sales

1.2%

Total Volume $ increase over 4Q16

10% 8 | Pebble Beach

increase over 2016 sales

4Q2017

4Q17 Update

Pebble Beach

Pebble Beach Oceanfront & Golf Front Sub-Region Market Overview

Pebble’s golf and oceanfront sub-markets quieted down in 2017 (zero sales) after a seeing a 3-year streak of 3+ sales.

The top of Pebble’s market developed an inventory glut in ‘17, representing 21% of active listings with average days on market (above $8M) ballooning to a year high of 377.

Sales Average DOM Listing Discount Median Sales Price

2010 1 0 0 $17.5M

2011 0

2012 1 0 0 $14M

2013 3 10 -12.74 $22.5M

2014 6 159 -4.115 $16.5M

2015 5 174 -16.888 $11M

2016 4 168 -8.7325 $17M

2017 0

MPCC Frontline Sub-Region Market Overview

The MPCC area sustained its momentum in ’17, posting another robust year with 79 sales (2nd highest total on record) as strong demand and tight inventory levels favored sellers in this area. MPCC’s frontlines (properties along the MPCC course’s golf front with ocean views) also had a strong year with 6 closed sales – matching last year’s total.

Sales Average DOM Listing Discount Median Sales Price

2010 0

2011 0

2012 3 7 -5.1 $4.3M

2013 1 229 -10.4 $3.1M

2014 4 178 -7.1 $3.7M

2015 4 197 -6.2 $4.6M

2016 6 160 -8.2 $4.7M

2017 6 208 -6.2 $4.2M

Spanish Bay Townhomes Sub-Region Market Overview

The Spanish Bay Condos (a gated community of 80 units separated in 4-unit pods), had a stellar year with 6 closed escrows (2 off-market) with prices varying from $4.119M for a frontline unit with ocean views down to $3.05M for an interior unit. Median sales prices carried above the $3M threshold for a third year in a row as demand outstripped supply in this coveted sub-market (only 1 active listing).

Sales Average DOM Listing Discount Median Sales Price

2010 0

2011 2 104 -8.7 $2M

2012 4 13 -2.8 $2.1M

2013 2 138 -9.1 $2.9M

2014 1 82 -5.0 $1.9M

2015 4 3 -5.2 $3.7M

2016 3 66 -3.1 $3.6M

2017 6 92 -5.8 $3.4M

Pebble Beach - Sub Regions Overview | 9

Carmel

Market Overview Sales in the 4Q surged in downtown Carmel with 58 closed escrows, which represents a 45% increase over 4Q16 and a 16% increase over last quarter, which is an anomaly as we often see a drop in activity in 4Q of the year.

Overall, 2017 was very strong with 207 sales (a 12% increase over 2016) and the first time in over a decade that there have been over 200 deals close. This is also a 92% increase over the low of 108 deals that we saw in 2009.

After a slow 2Q, the Golden Rectangle came charging back with 28 closed escrows in the second half of this year, 56% higher than the second half of last year. Somewhat surprisingly, the Southeast section of Carmel slowed considerably this year with just 4 closed escrows this quarter, bringing total sales to 22 (down 27% from 2016). Hatton Fields finished '17 very strong with 20 closed escrows in 2Q17, twice the second half of 2016. The Northeast Carmel region had 16 closed escrows this quarter, a 78% increase over 4Q16.

Carmel Point had another steady quarter with 8 closed escrows, bringing the 2017 total to 30 (50% increase over 2016).

The $1-2M price bracket represented both the majority of deals this year and also the biggest increase in activity. In 2017, there were 58 sales from $1-1.5M (21% over 2016) and 50 sales from $1.5-2M (39% over 2016). Sales over $4M also increased this quarter with 6 closed escrows (50% higher than 4Q16).

Additionally, the 16 sales in this bracket this year is the highest we have seen in over a decade and 33% over 2016. The majority of this increase is seen in the $4-6M bracket, which had 10 closed escrows in 2017, matching the high point in 2007 and 46% higher than the annual average (6.82 deals) for this bracket.

4Q17 Top Carmel Sales 26324 Valley View Avenue 26263 Scenic Road Scenic Road 3 NW of 8th Casanova 2 SE of 10th Monte Verde 4SW of 13th Scenic Road 3 N of 11th 26255 Ocean View Avenue 26152 Ladera Drive 0 Monte Verde 4,5,6,8 SW OF 4TH 26247 Atherton Place NE Corner of Casanova & 10th

$6,750,000 $6,100,000* $4,750,000 $4,250,000 $4,245,000 $4,125,000 $3,525,000 $3,350,000 $3,300,000 $2,975,000 $2,900,000

*Represents a Canning Properties Group Sale

10

Featured Property Photo: Scenic 4NE of 13th, Carmel-by-the-Sea

4Q17 Update

Sales & Inventory | 4Q2017 Pending

30

$1.0M-$1.5M

<$1.0M

0

9

Active

86

Get Smart

3 2 6

Pending

11

4Q17 Sales

Average Days on Market

8

2 3

1

160 140 120 100 80 60 40 20 0

DOM

58

4Q17 Snapshot

4.7%

4

$6.0M-$8.0M

11

3

$1.5M-$2.0M

5

2 7

$2.0M-$2.5M

9 41

3 2 64

$4.0M-$6.0M

5 3

3

10

116

100

$3.0M-$4.0M

15

15

149

141

$2.5M-$3.0M

13

20

DOM

Avg. Days on Market

Properties

144

131

25

4Q17 Sales

SALES & INVENTORY| 4Q2017

$8M+

Active

Carmel

Units Sold

off list price

Salesby

by Price Range AnnualAnnual Sales Price Range 2017 2017 2016 2016 2015 2015 2014 2014 2013 2013 0 0

50 50

<$1M <$1.0M

100 100

150 150

Sales by Price Range $2.5M - $3M $3M - $4M

$1M - $1.5M

$1.5M - $2M

$2M - $2.5M

$1.0M-$1.5M

$1.5M-$2.0M

$2.0M-$2.5M

$2.5M-$3.0M

$3.0M-$4.0M

200 200

$4M - $6M $4.0M-$6.0M

250 250

$6M - $8M

$8M+

Carmel$8M+ | 11 $6.0M-$8.0M

Quarterly Salesby byRegion Region Quarterly Sales Quarterly Sales by Region 18

Carmel Point

Golden Rectangle

Carmel PointNortheast Golden Rectangle Carmel Point Golden Rectangle Hatton Fields Carmel Northwest Carmel

Southeast Carmel

18 18

16

16 16

14

14 14

12

12 12

10

Sales

10 10

8

8 8

6

6 6

4 44 2 22 0 00

1Q2016 1Q2016 1Q2016

2Q2016 2Q2016 2Q2016

3Q2016 3Q2016 3Q2016

4Q2016 4Q2016 4Q2016

1Q2017 2Q20172Q2017 2Q2017 3Q2017 3Q2017 3Q2017 4Q2017 1Q2017 1Q2017 4Q2017 4Q2017

2016 2016 2016

2017 2017 2017

Inventory is down

25% $109M 4Q17 Total $ Volume

Get Smart

4Q17 Snapshot

35%

increase over 4Q16 sales

24%

Total Volume $ increase over 4Q16

10% 12 | Carmel

increase over 2016 sales

4Q17 Update

Carmel

Carmel "3C's"

Sub-Region Market Overview Combining the best in walkability to the beach and to town, Carmelo, Camino Real and Casanova are considered some of the best streets in Carmel-by-the-Sea. Sales in this region hit the highest point in over a decade with 19 sales and sold 34% faster than the rest of Carmel. Weâ&#x20AC;&#x2122;re also seeing less negotiating room with homes selling just 4.5% off list price and several properties receiving multiple offers this year. This region is truly a bellwether for the rest of Carmel; we are optimistic that it will continue to strengthen into 2018.

Sales Average DOM Listing Discount Median Sales Price

2010 4 16 -5.7 $1.3M

2011 14 38 -4.1 $2.2M

2012 22 91 -4.5 $1.2M

2013 12 158 -7.7 $2.3M

2014 16 205 -3.4 $2.1M

2015 10 75 -3.6 $2.3M

2016 15 75 -4.6 $2.8M

2017 19 56 -4.5 $2.3M

Carmel Point

Sub-Region Market Overview With larger lot sizes and homes, Carmel Point has the highest median price of any area in Carmel this year. Despite tight inventory levels (only 9 currently listed) this area had another strong year with 16 sales, continuing a steady pace seen over the past 5 years and twice the level seen in 2012.

Sales Average DOM Listing Discount Median Sales Price

2010 3 13 -8.5 $2M

2011 10 34 -7.7 $1.3M

2012 8 193 -10.8 $2.5M

2013 22 237 -5.9 $2.2M

2014 20 124 -4.7 $3.1M

2015 14 182 -3.7 $2.6M

2016 13 60 -5.3 $2.5M

2017 16 91 -3.6 $2.6M

Scenic

Sub-Region Market Overview Scenic had a surge in activity in '17 with 8 sales (including both Carmel-by-the-Sea and Carmel Point sections of Scenic Road) which is historically high. The median price dipped this year, primarily due to the sale of more teardowns compared to previous years. 2018 should continue to be a strong year for Scenic sales as demand has been strong and there are only three currently listed, plus our two off market contemporary homes.

Sales Average DOM Listing Discount Median Sales Price

2010 0

2011 3 48 -3.0 $5.6M

2012 5 280 -12.1 $5.2M

2013 9 263 -6.2 $4.9M

2014 7 183 -4.8 $4.0M

2015 4 133 -5.8 $7.2M

2016 5 184 -4.4 $8.9M

2017 8 109 -9.0 $5.6M

Carmel - Sub Regions Overview | 13

Carmel Highlands Market Overview

The number of sales in the Carmel Highlands/Meadows region in 4Q17 slowed 17% compared to 3Q17 (5 and 6 sales respectively). There were 24 total sales in the region in 2017 – just 1 sale above 2016 but dropping far behind the record-setting 40 sales in 2015.

While the Highlands is adjusting back to normal inventory levels, Carmel Meadows actives are at a historic low (0 active listings) - compared to 5 actives in 4Q16. Days on market for active inventory is also significantly lower in 4Q17 compared to 4Q16 – the current active inventory shows an average of 121 days on market; down 44% from 217 average days on market in 4Q16. Additionally, there are no active listings in the Highlands/Meadows below $1M. The most movement was created by the $1M-$1.5M price bracket (25% of sales occurred in this range in 2017). 42% of all sales in the region in 2017 were between $1M-$2M. This skew is due to the spike in sales at the top of the market, where demand now appears to be reverting to the mean – we’ll keep a close eye on that in the first quarter of ’18.

4Q17 Top Carmel Highlands Sales 30500 Aurora del Mar 115 Pine Way 244 Highway 1 186 Van Ess Way 2900 Ribera Road

$7,825,000* $2,520,000 $2,450,000 $1,875,000 $1,285,000

*Represents a Canning Properties Group Sale

14

Featured Property Photo: 32680 Coast Ridge, Carmel Highlands

4Q17 Update

Sales & Inventory | 4Q2017

7 6 5 4 3 2 1 0

Pending

DOM

4Q17 Sales

SALES & INVENTORY| 4Q2017

160 140 120 100 80 60 40 20 0

140 117

1

2 $2.0M-$2.5M

$1.5M-$2.0M

<$1.0M

$1.0M-$1.5M

2

Active

Get Smart

39

4

Pending

208 9%

off list price

4Q17 Snapshot

36

30

4Q17 Sales

Average Days on Market

4 2 $8M+

3

6

$3.0M-$4.0M

1

67 1 1 1

$6.0M-$8.0M

1

$2.5M-$3.0M

1 1

1

$4.0M-$6.0M

100

115

35 35

40 40

Avg. Days on Market

Properties

Active

Carmel Highlands

DOM

5

Units Sold

Sales by Price Range AnnualAnnual Sales

by Price Range 2017 2017 2016 2016 2015 2015 2014 2014 2013 2013

00

55

10 10

15 15

20 20

<$1M

$1M - $1.5M

$1.5M - $2M

25 30 30 25 Sales by Price Range $2M - $2.5M $2.5M - $3M $3M - $4M

<$1.0M

$1.0M-$1.5M

$1.5M-$2.0M

$2.0M-$2.5M

$2.5M-$3.0M

$3.0M-$4.0M

$4M - $6M $4.0M-$6.0M

$6M - $8M

45 45

$8M+

$6.0M-$8.0M

$8M+

Carmel Highlands | 15

Quail / Santa Lucia Preserve Market Overview

The Quail Lodge and Quail Meadows sub-markets had a strong year overall, bolstered by steady demand that has compressed inventory levels to just 1, a 10-year low.

With 3 closed escrows and 1 sale pending (due to close in early ’18), the ‘Meadows market outpaced annual volume averages (2.89 sales/year) while also posting above average total dollar amounts (up 15%) with $10.31M. Quail Lodge sales slowed this year with 9 sales - half of last year’s total and also well below annual averages (down 20%). This slowdown was completely due to the inventory shortage in the Lodge area (zero actively listed), which has pushed median sales prices to an all-time high of $1.719M. The Preserve’s house market gained momentum this year with 4 sales (2 above $5M) - the most transactions since ’10. Also worth noting that the total dollar amount for ‘17 ($18.6M) nearly doubled the Preserve’s annual averages ($9.7M).

The Preserve’s lot market did not fare as well in ’17 with just 6 closed escrows (down 30% from annual averages). Also, median sales prices lost ground in ’17 (dipped 28% from ’16) after 2 years of positive gains.

4Q17 Top Quail / Santa Lucia Preserve Sales 5462 Quail Way 4 Rumsen Trace 8067 Lake Place 8003 River Place 7020 Valley Greens Drive #13 7026 Valley Greens Circle #10

$3,945,000* $3,600,000 $2,146,115 $1,490,000 $845,000 $690,000

*Represents a Canning Properties Group Sale

16

Featured Property Photo: 39 Pronghorn Run, Carmel

4Q17 Update

Sales & Inventory | 4Q2017 Active

Pending

767 1

5 4

1

Active

122

Get Smart

121

1

$4.0M-$6.0M

$3.0M-$4.0M

Pending

4Q17 Sales

Average Days on Market

4Q17 Snapshot

6.9%

5 3

50

1

$8M+

1

$2.5M-$3.0M

1

$2.0M-$2.5M

1

$1.5M-$2.0M

0

$1.0M-$1.5M

1

2 169

<$1.0M

2 157

2

$6.0M-$8.0M

3

900 800 700 600 500 400 300 200 100 0

Avg. Days on Market

6

Properties

DOM

4Q17 Sales

SALES & INVENTORY | 4Q2017

7

Quail / Preserve

DOM

6

Units Sold

off list price

Annual Annual SalesSalesbyby Price Price RangeRange 2017 2017 2016 2016 2015 2015 2014 2014 2013 2013

00

55 <$1.0M <$1M

$1.0M-$1.5M $1M - $1.5M

10 10 $1.5M-$2.0M $1.5M - $2M

$2.0M-$2.5M $2M - $2.5M

15 15

Sales by Price Range $2.5M-$3.0M $2.5M - $3M

20 20

25 25

30 30

$3.0M-$4.0M $3M - $4M $4M$4.0M-$6.0M - $6M $6M $6.0M-$8.0M - $8M $8M+ $8M+

Quail / Santa Lucia Preserve | 17

2017 Canning Properties Group Significant Sales 26345 Scenic Road, Carmel $10,500,000

5473 Quail Meadows Drive, Carmel $3,750,000

30500 Aurora Del Mar, Carmel Highlands $7,825,000

NWC Casanova & 13th, Carmel-by-the-Sea $3,602,000

3353 17 Mile Drive, Pebble Beach $7,500,000

79 Spanish Bay Circle, Pebble Beach $3,150,000

1285 Padre Lane, Pebble Beach $6,647,000

64 Spanish Bay Circle, Pebble Beach $3,050,000

26263 Scenic Road, Carmel $6,100,000

7985 Carmel Valley Road, Carmel $2,950,000

1456 Riata Road, Pebble Beach $4,850,000

1504 Venadero Road, Pebble Beach $1,950,000

1520 Venadero Road, Pebble Beach $4,650,000

26355 Rio Ave, Carmel $1,937,500

2313 Bay View, Carmel $4,500,000

Santa Rita 4SE of 2nd, Carmel-by-the-Sea $1,635,000

5462 Quail Way, Carmel $3,945,000

4109 El Bosque Drive, Pebble Beach $1,338,000

For a behind the scenes look at our listings and upcoming events visit our social pages.

@CanningProperties

@CanningPropertiesGroup

Featured Property Photo: 30500 Aurora Del Mar, Carmel Highlands

@TeamCanning