2Q2021 Market Update

2Q21 Market Update

Mike Canning

Jessica Canning

Nic Canning

DRE#01004964 831.596.1171 mike@mikecanning.com

DRE# 01920034 831.238.5535 jessica@canningproperties.com

DRE# 01959355 831.241.4458 nic@canningproperties.com

Ellen Krausse

Brian Keck

Dave Reese

DRE# 02046046 831.204.2204 ellen@canningproperties.com

DRE# 02070480 831.238.8730 brian@canningproperties.com

DRE# 02121762 831.272.2172 dave@canningproperties.com

Overview The past four quarters have brought unparalleled activity in our area, with 648 deals closing for over $2B in sales. However, the peak in activity came in 3Q20 when 213 deals closed, subsequently tapering to about 145 deals the following quarters. This is still well above historic averages but it appears that the wave has passed us. The top of the market roared to life this quarter with 21 deals closing above $6M, including 15 north of $8M. However, we are starting to see demand plateau with buyer fatigue setting in and more travel options opening up again.

Pebble Beach has held the strongest in the area, with over $200M closed in each of the past 4 quarters, which is more than double what we normally see. Carmel has tapered a bit from the high we saw in 3Q20, but is still well above average in total investments. One of the bright spots continues to be the Preserve with over $100M invested in the past 4 quarters, including several sales at or above list price. The tight supply is even having a halo effect in the surrounding areas, pushing prices much higher out in Carmel Valley and Pacific Grove.

Although this market has been nearly impossible to predict over the past year, we are starting to see seller motivation coming from personal life events, rather than trying to time any market appreciation. Life is slowly returning to normal again.

Featured Property: 26262 Isabella Ave 26262Isabella.com

Market Insight All Regions

2Q2021 Sales by Price Range

144

Total Sales

Median Sales Price ($M) 2Q2021

Area

YoY% Change

$2.55

Carmel

50%

$7.00

Carmel Highlands

15%

$2.80

Pebble Beach

-10%

$2.40

Quail

82%

$4.85

Preserve

31%

$2.40

Overall

7%

$8M+

16

$6M - $8M

6

$4M - $6M

18

$3M - $4M

17

$2.5M - $3M

13

$2M - $2.5M

11

$1.5M - $2M

18

$1M - $1.5M

24

<$1M

21

Total Annual Sales

*

Average Sales Price ($M) 2Q2021

Area

YoY % Change

$3.08

Carmel

17%

$6.40

Carmel Highlands

22%

$4.22

Pebble Beach

-1%

$2.10

Quail

47%

$5.17

Preserve

40%

$3.42

Overall

15%

*Indicates sales for first half of 2021

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

2Q2021 Update All Regions

# of Sales

Quarterly Sales by Region

Carmel Sales Price Range

Carmel Highlands

Pebble Beach

Preserve

Quail

10 Year Ave. 2Q Sales

10 Year Ave. 1H Sales

33

22

44

32

44

25

47

18

17

45

17

30

8

11

15

22

10

18

$2.5M-$3.0M

3

13

9

26

7

13

$3.0M-$4.0M

12

17

20

31

9

16

$4.0M-$6.0M

1

18

12

31

7

10

$6.0M-$8.0M

4

6

7

15

2

4

$8M+

4

16

4

21

4

4

Total Sales

58

144

131

268

103

187

2Q20

2Q21

1Q20-2Q20 1Q21-2Q21

<$1.0M

6

21

15

$1.0M-$1.5M

12

24

$1.5M-$2.0M

8

$2.0M-$2.5M

Pebble Beach Market Overview

Summer has arrived, and with that, travel plans and bookings for the local hospitality industry have boomed to new records, while COVID-related restrictions have been mostly lifted. Life around town appears to be heading towards more normal routines even as the real estate market remains hot heading into the second half of the year.

With over $219M invested in 52 sales, the second quarter kept pace with a torrid 1Q – besting its 10-year rolling averages for both total dollar volume and transactions ($5.6M & $35M sales respectively).

The top of Pebble’s market (>$10M) posted a record-setting 2Q with 10 closed escrows and 2 contingent sales – spiking the quarterly absorption rate for that sub-market to 129%. To put that extraordinary percentage into perspective, as COVID restrictions eased and sales picked up this same time last year, the absorption rate for the top of the market was 28% (2 sales). With our most active months yet to come, Pebble’s market is forecasting a continuation of this Sellers’ market (an above 25% absorption rate) for the balance of the year.

As unrelenting demand thinned inventory levels for Pebble’s lower price points in 2Q, the average days on market rose slightly throughout Pebble representing an upward shift in list prices (65% of active listings are currently above $5M). Central Pebble Beach averages dropped to 55 DOM, MPCC elevated to 56 DOM and the Upper Forest lifted to 9 DOM. Although higher priced listings historically take longer to sell, we’re seeing quality properties and turn-key homes selling quickly.

Throughout the first half of 2021, we saw a notable rise in Bay Area agents representing Buyers as their respective markets cooled and their clients favored areas like the Monterey Peninsula. With that, their slightly different negotiation styles followed suit, tightening local negotiations even more from the second half of 2020. For example, Central Pebble Beach averages narrowed to just -3.9% off of list price and lowest on record, while the MPCC area tightened to +0.8% over list price and the Upper Forest hovered at +1.7% over list price. We’ll be closely watching these trends heading into the second half of the year to see how the unique shift in local market dynamics plays out throughout the year.

Nic Canning Pebble Specialist

Featured Property Photo: 3406 17 Mile Drive, Pebble Beach 3406SeventeenMile.com

2Q2021 Update Pebble Beach

2Q2021 Sales by Price Range 10 3 6 7 1 1 8 6 10

$8M+ $6M - $8M $4M - $6M $3M - $4M $2.5M - $3M $2M - $2.5M $1.5M - $2M $1M - $1.5M <$1M

52

Total Sales

$220M Total Dollar Volume

Get Smart

52 Units Sold in 2Q2021

2Q2021 Snapshot

44 Average Days on Market

9% increase from 1Q21

146% increase from 2Q20

Even from 1Q21

148% increase from 2Q20

24% decrease from 1Q21

61% decrease from 2Q20

2Q2021 Top Pebble Beach Sales 3333 17 Mile Drive 1659 Crespi Lane

1535 Palmero Way

3364 17 Mile Drive

3187 17 Mile Drive

3359 17 Mile Drive

3225 17 Mile Drive

1515 Riata Road

1303 Padre Lane

1139 Portola Road

27 Poppy Lane

$17,333,000 $12,500,000 $11,000,000 $10,750,000 $10,700,000 $10,500,000 $10,000,000 $,9,600,000 $9,489,655 $8,337,500 $6,550,000

3307 17 Mile Drive #4 1476 Bonifacio Road 3281 Ondulado Road 32 Poppy Lane 1228 Padre Lane

958 Coral Drive 1536 Viscaino Road

3210 Macomber Dr

3266 Stevenson Drive 3116 Bird Rock Road 3274 Stevenson Drive

Indicates a Canning Properties Group Sale

$6,250,000 $6,000,000 $5,550,000 $5,500,000 $5,350,000 $5,120,000 $4,746,655 $4,350,000 $3,800,000 $3,585,000 $3,562,500

# of Sales

Quarterly Sales by Region

Central Pebble Beach

-1.5%

Average % off list price 2Q2021 Sales

Median Home Sales Price ($M)

MPCC

Upper Forest

drive o t e u n conti Sellers 021.

2 n i s m ter

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

2Q2021

$2.80

-10%

2Q2021

$4.22

-1%

1Q2021

$2.41

75%

1Q2021

$3.87

119%

4Q2020

$2.02

7%

4Q2020

$3.53

5%

3Q2020

$2.10

-9%

3Q2020

$3.60

15%

2Q2020

$3.10

42%

2Q2020

$4.24

21%

Carmel

Market Overview For the prime parts of Carmel, 2nd quarters usually start out slow and then ramp up as we head into June and the start of summer.

2Q21 was an exception to that trend as deal flow accelerated at the turn of the 2nd quarter and then sustained solid momentum throughout.

The total of $175.3M invested in 57 sales not only outperformed the 1st quarter’s impressive route of $131.1M and 49 sales, but also edged near last year’s stellar 3rd and 4th quarters as well.

Overcoming record-low inventory levels, the Carmel market remains active with the highest demand for the Golden Rectangle (12 sales), followed by Northwest Carmel (13 sales) and Carmel Point areas (9 sales). In keeping with recent trends, brand-new and turn-key homes are moving quickly as well as homes close to downtown or the beach.

Similar to the Pebble Beach market, the top of Carmel’s market (>$8M+) posted a stronger-than-average quarter with three sales above $8M: $12.25M, $9.375M and $9M. To put into context, these 3 sales represent the most in Carmel above $8M in a quarter since 1Q16.

The other price brackets to highlight include both $2M-$3M and $3M-$4M, which combined for nearly 50% of the all transactions for the quarter. Normally, we see a higher percentage of the sales below $2M, but as Buyers competed over thinning inventory, prices rose above $2M (and beyond) for a typical 3 bed/2.5 bath cottage near town.

With the 70th Concours d'Elegance and Car Week making a longawaiting return to the area in August, we’re already beginning to see the energy build around town as the various venues prepare and luxury cars roll in.

Will be interesting to see how Car Week’s return plays a role in the real estate sector throughout the 3rd quarter of this year.

Jess Canning Carmel Specialist

Featured Property Photo : Lincoln 3NE of 10th Lincoln3NEof10.com

2Q2021 Update Carmel

2Q2021 Sales by Price Range $8M+ $6M - $8M $4M - $6M $3M - $4M $2.5M - $3M $2M - $2.5M $1.5M - $2M $1M - $1.5M <$1M

57

Total Sales

$175M

Total Dollar Volume

Get Smart

57

Units Sold in 2Q2021

2Q2021 Snapshot

45 Average Days on Market

3 1 10 6 9 7 9 10 2

34% increase from 1Q21

286% increase from 2Q20

16% increase from 1Q21

148% increase from 2Q20

18% increase from 1Q21

23% increase from 2Q20

2Q2021 Top Carmel Sales 26263 Scenic Rd

Scenic 3NE of Santa Lucia 1 Sand & Sea 26285 Valley View

San Antonio 4NE of Avenue Lincoln 4 SW of 12th

2692 15th Avenue 26241 Valley View Ave

Lopez 2NW of 4th

$12,200,000 $9,375,000 $9,000,000 $7,350,000 $5,800,000 $5,100,000 $5,100,000 $4,900,000 $4,675,000

Camino Real 3.5SE of 2nd Ave 26166 Valley View Ave

Monte Verde 3SE & 10th SE corner of San Antonio & Ocean Carmelo 2SE of 13th

Dolores 3 SE of 9th Monte Verde 2NE of Santa Lucia Dolores 2NW of 12th

NEC Forest & 5th

Indicates a Canning Properties Group Sale

$4,400,000 $4,200,000 $4,050,000 $4,050,000 $4,050,000 $3,875,000 $3,755,000 $3,280,000 $3,000,000

# of Sales

Quarterly Sales by Region

Carmel Point Northeast Carmel

Golden Rectangle Northwest Carmel

+2.1% Average % over list price 2Q2021 Sales

Median Home Sales Price ($M)

Hatton Fields Southeast Carmel

ntinue to o c s r e y u b Bay Area a Summer s a l e m r a C look at retreat.

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

2Q2021

$2.55

50%

2Q2021

$3.08

56%

1Q2021

$2.00

-9%

1Q2021

$2.68

2%

4Q2020

$2.31

38%

4Q2020

$2.92

41%

3Q2020

$2.10

27%

3Q2020

$2.56

32%

2Q2020

$1.70

-17%

2Q2020

$1.98

-15%

Carmel Highlands Market Overview

Halfway through 2021 the Carmel Highlands area continues to outperform previous years in total dollar volume invested, further establishing it as a dominant region on the Monterey Peninsula.

The second quarter is typically slower, but surprisingly, 2Q20 had an impressive quarter with $26.2M invested, second only to 2Q14 which had set the bar at $35.07M. But, 2Q21 has shattered the record for 2Q Highlands’ sales with $44.5M invested. Not only is this close to 3X the 10-year rolling average for a 2Q ($15.8M), but 2Q21 has by itself, already eclipsed the whole first half of 2020 which, by years end broke records with $165.8M in total dollar volume. Illuminating the appreciation for Carmel Highlands properties, this quarter set the record with only 6 sales, equating to an average sale price of $7.4M! Are we halfway through another record setting year for the Carmel Highlands? All indicators seem to point that way. Indeed, there is currently over $50M in actively listed properties on the market and $25M in either contingent or pending properties in the Carmel Meadows and the Carmel Highlands. If we can keep this pace into the second half of the year—traditionally the stronger half—we will be recording another high mark in 2021 for the Carmel Highlands real estate market.

We will keep you up-to-date on market movements over the next 6 months and we invite you to keep an eye out for 3 new listings that Canning Properties is bringing to the market in the Highlands next quarter! If you would like to discuss listing your property with us, please reach out and I will make the time to come and meet with you personally.

Dave Reese Highlands Specialist

Learn about upcoming listings in this area on the discreet section of our website: DiscreetProperties.com

2Q2021 Update Carmel Highlands

2Q2021 Sales by Price Range 2 2 0 1 1 0 0 0 1

$8M+ $6M - $8M $4M - $6M $3M - $4M $2.5M - $3M $2M - $2.5M $1.5M - $2M $1M - $1.5M <$1M

7

Total Sales

$44.83M Total Dollar Volume

Get Smart

2Q2021 Snapshot

7

Units Sold in 2Q2021

202

Average Days on Market

45% increase from 1Q21

71% increase from 2Q20

13% decrease from 1Q21

40% increase from 2Q20

262% increase from 1Q21

56% increase from 2Q20

2Q2021 Top Carmel Highlands Sales 166 Spindrift Road $16,000,000 30860 Aurora Del Mar $8,088,178 29798 Highway 1 $7,700,000 30650 Aurora Del Mar $6,995,000 1 Mentone Road $3,150,000 174 Carmel Rivera Drive $7,700,000 San Remo Road (Lot) $355,000

Indicates a Canning Properties Group Sale

Quarterly Sales by Region Carmel Meadows

# of Sales

Carmel Highlands

-4.6%

Average % off list price 2Q2021 Sales

Median Home Sales Price ($M)

in tight, a m e r s n io Negotiat ead into h e w s a sellers year. favoring e h t f o f l d ha the secon Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

2Q2021

$7.00

15%

2Q2021

$6.40

22%

1Q2021

$3.09

-41%

1Q2021

$3.85

-21%

4Q2020

$2.83

122%

4Q2020

$3.39

39%

3Q2020

$1.90

27%

3Q2020

$2.93

39%

2Q2020

$6.10

158%

2Q2020

$5.24

104%

Quail Lodge/Meadows Market Overview

Quail Lodge blew away its quarterly average, bringing in over $20.06M in total sales which nearly matched all of 2020. Not only did record dollars and units transact, we saw record low discounts taken at 1.5% and days on market significantly shrink to 27 days, 77% lower than its 10-year historical average.

Prices significantly increased in both single family and condos, especially in the condo market where all sales transacted over the million-dollar mark, a near 20% increase from its historical average. We continue to see strong demand for single level homes, increasingly primary residences, in good school districts with close proximity to amenities, which is a sweet spot for Quail.

Quail Meadows activity picked up with two home sales yielding $7.2M, after recording zero sales last quarter or the same quarter last year. The median sale price of $3.6M is just 5.5% below its 10-year historical average but 2Q21 sales sold 50% quicker than average and were on par with a usual 7.3% discount. Inventory remains low with just one home and two homesites on the market in Quail Meadows and with heightened demand, buyers are going to have be patient and work harder to find what they’re looking for.

Brian Keck Preserve & Quail Specialist

Learn about upcoming listings in this area on the discreet section of our website: DiscreetProperties.com

2Q2021 Update Quail Lodge/Meadows

2Q2021 Sales by Price Range 0 0 0 2 2 3 1 4 1

$8M+ $6M - $8M $4M - $6M $3M - $4M $2.5M - $3M $2M - $2.5M $1.5M - $2M $1M - $1.5M <$1M

13

Total Sales

$27.27M Total Dollar Volume

Get Smart

13

Units Sold in 2Q2021

2Q2021 Snapshot

399% increase from 1Q21

539% increase from 2Q20

333% increase from 1Q21

333% increase from 2Q20

71% decrease from 1Q21

56% decrease from 2Q20

27

Average Days on Market

2Q2021 Quail Lodge/ Meadows Top Sales 5465 Quail Meadows Drive 5500 Quail Meadows Drive 7036 Valley Greens Circle 7030 Valley Greens Circle 8010 River Place 8004 River Place 7010 Valley Greens Circle

$3,950,000 $3,260,000 $2,700,000 $2,695,000 $2,475,000 $2,400,000 $2,400,000

8022 River Place 7020 Valley Greens Drive #13 7026 Valley Greens Circle #10 7026 Valley Greens Circle #15 7026 Valley Greens Circle #1 7026 Valley Greens Circle #11

Indicates a Canning Properties Group Sale

$1,900,000 $1,200,000 $1,155,000 $1,150,000 $1,100,000 $885,000

Quarterly Sales by Region Quail Meadows

# of Sales

Quail Lodge

-1.5%

Average % off list price 2Q2021 Sales

Median Home Sales Price ($M)

up this d e p p a n s t .

Condos go and sales s e c i r p lifting quarter,

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

2Q2021

$2.40

82%

2Q2021

$2.10

47%

1Q2021

$1.68

20%

1Q2021

$1.82

-8%

4Q2020

$2.03

-38%

4Q2020

$2.17

-38%

3Q2020

$2.15

126%

3Q2020

$2.44

51%

2Q2020

$1.32

-34%

2Q2020

$1.42

-43%

Santa Lucia Preserve Market Overview

The beautiful spring season brought wildflowers, warming temperatures, golf tournaments and a steady flow of buyers to The Preserve’s nature conservation Community. With COVID-19 restrictions mostly lifted, residents are happily enjoying social events, kids’ camps, equestrian and golf lessons and holiday gatherings at the Golf and Ranch Clubs and real estate remains hot with buyers searching for inventory.

The second quarter kept pace with the robust velocity of the past year, yielding $29.9M invested in the Community: $20.7M sold in homes and $9.2M sold in homesites; continuing the 4th consecutive quarter of growth. With only 4 homes on the market, an impressive 4 homes sold last quarter, compared to a historical average of 1. Of those sales, 2 were off market and a new high-water mark in the Community was reached at $8M. With finished home inventory low (2) and demand for privacy, open space and world-class amenities remaining strong and listings continue to be snapped up quickly. Bargaining power was also held in the hands of the sellers as record low discounts have become standard for new listings. Vacant land continues to be the beneficiary of low housing inventory with 11 homesite sales in 2Q21, continuing from the previous quarter and double that of 2020. Discounts tightened to 11% off list price and days on market also declined to 202 days (down 38% from its 10-year historical average). With a diverse buyer’s profile and land options, we continue to see large variances in price from the top of the market at $1.425M to the bottom at $250k, with an average price of $832K, which is right on par with its historical average.

We anticipate median sales prices to continue to rise and bargaining power to remain in favor of sellers with high demand and low housing inventory. Vacant land sales velocity looks to remain steady as 3 lots are currently in escrow and inventory levels remain constant with new lots becoming available at a pace matching sales velocity.

Our Team is honored to have represented at least one side in 2 of the 4 home sales, including both sides of the offmarket 16 Arroyo Sequoia house.

Brian Keck Preserve & Quail Specialist

Featured Property Photo: 37 Rancho San Carlos, Santa Lucia Preserve 37RanchoSanCarlos.com

2Q2021 Update Preserve

2Q2021 Sales by Price Range 1 0 2 1 0 0 0 4 7

$8M+ $6M - $8M $4M - $6M $3M - $4M $2.5M - $3M $2M - $2.5M $1.5M - $2M $1M - $1.5M <$1M

15

Total Sales

$29.9M

Total Dollar Volume

Get Smart

2Q2021 Snapshot

15

Units Sold in 2Q2021

277

Average Days on Market

4% increase from 1Q21

330% increase from 2Q20

7% increase from 1Q21

150% increase from 2Q20

13% increase from 1Q21

32% decrease from 2Q20

2Q2021 Top Preserve Sales Homes Lots

9 Vasquez Trail

8 Arroyo Sequoia 6 Vasquez Trail 6 Via Vaquera

$8,000,000 $5,250,000 $4,495,000 $4,995,000

57 Chamisal Pass 23 Pronghorn Run 16 Potrero Trail 17 Black Mountain Trail 13 Touche Pass 2 Arrowmaker Trace

31 Potrero Trail 37 Pronghorn Run 27 Arroyo Sequoia

Indicates a Canning Properties Group Sale

$1,425,000 $1,275,000 $1,150,000 $1,000,000 $975,000 $850,000 $770,000 $630,000 $525,000

Quarterly Sales Preserve Houses

# of Sales

Preserve Lots

Homes | -0.4% Lots | -11.0%

and has m e d d e n i a t s Su rrowed a n d n a s e c i lifted pr or new f m o o r g n i t a negoti listings.

Average % off list price 2Q2021 Sales

Median Home Sales Price ($M)

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

2Q2021

$4.85

31%

2Q2021

$5.17

40%

1Q2021

$4.58

8%

1Q2021

$4.22

0%

4Q2020

$3.78

11%

4Q2020

$3.78

11%

3Q2020

$4.30

N/A

3Q2020

$4.57

N/A

2Q2020

$3.70

-9%

2Q2020

$3.70

-9%

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BEING RECO G NI ZE D BY 2021 REAL TRE NDS & WALL ST REET J OUR NA L T HOUSAND RA NKI NG S

1

T E A M NATI ONA L LY Among Sotheby’s International Realty Teams

#

1

#

2

TEAM IN MONTEREY COUNTY

TEAM NATIONALLY

BY DOLLAR VOLU ME

Among All Teams

Among All Medium Size Teams

Mike Canning | Jessica Canning | Nic Canning | Ellen Krausse | Brian Keck | Dave Reese team@canningproperties.com | 831.238.9718 CanningProperties.com ©Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc. Real estate agents affiliated with Sotheby’s International Realty, Inc. are independent contractor sales associates and are not employees of Sotheby’s International Realty, Inc. SIR DRE License Number: 899496, Mike Canning DRE#01004964, Jessica Canning DRE#01920034, Nic Canning DRE#01959355, Ellen Krausse DRE#02046046, Brian Keck DRE#02070480 and Dave Reese DRE#02121762