3Q2021 Market Update

3Q21 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 Sales are trending slower this quarter with just 102 sales across Carmel, Pebble Beach, the Carmel Highlands, The Preserve and Quail areas, which was the slowest third quarter since 2015. This slower pace was primarily driven by tight inventories and more cautious buyers. However, the anemic inventory levels continue to keep prices high, with $351M in sales this quarter, bringing total investments to approximately $1.25B in 2021. At this pace, we’re set to surpass the $1.49B sold last year and are holding at a solid threetimes 2011 levels.

Median sales price surpassed $2.69M this quarter, up 24% from last year ($2.18M) and up 13% from 3Q19 ($2.38M). The market continues to be strong across the price spectrum, with more sales above $8M than below $1M. Additionally, we’re seeing homes in Carmel, Pebble and Quail Lodge area going above list price, on average, which is atypical for this region.

As we transition from a COVID-surge into a more typical sales cycle, we are seeing buyers get a bit fickle, with more deals falling through (13 so far this quarter in these regions). This is an important metric we’re tracking and are cautioning our sellers to treat each offer and deal carefully. Similarly, as summer comes to a close and we start to head toward our slower season, we are recommending to buyers to treat each opportunity carefully as it’s likely inventory won’t begin to truly replenish until next Spring or Summer.

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

Market Insight All Regions

3Q2021 Sales by Price Range

102

Total Sales

Median Sales Price ($M) 3Q2021

Area

YoY% Change

$2.47

Carmel

18%

$2.58

Carmel Highlands

36%

$2.93

Pebble Beach

36%

$1.58

Quail

-27%

$6.40

Preserve

49%

$2.69

Overall

24%

$8M+

8

$6M - $8M

5

$4M - $6M

13

$3M - $4M

11

$2.5M - $3M

16

$2M - $2.5M

7

$1.5M - $2M

19

$1M - $1.5M

14

<$1M

9

Total Annual Sales

Average Sales Price ($M) 3Q2021

Area

YoY % Change

$3.06

Carmel

18%

$2.93

Carmel Highlands

-5%

$4.58

Pebble Beach

26%

$2.46

Quail

1%

$6.28

Preserve

37%

$3.65

Overall

18%

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

3Q2021 Update All Regions

# of Sales

Quarterly Sales by Region

Carmel Sales Price Range

Carmel Highlands

Pebble Beach

Preserve

Quail

3Q20

3Q21

Apr-Sept 2020

Apr-Sept 2021

10 Year Ave. 10 Year Ave. 3Q Sales Apr-Sept Sales

<$1.0M

8

8

12

23

3

6

$1.0M-$1.5M

11

5

15

11

3

5

$1.5M-$2.0M

22

13

23

31

7

13

$2.0M-$2.5M

26

11

38

28

9

18

$2.5M-$3.0M

15

16

18

31

7

14

$3.0M-$4.0M

31

7

39

18

11

19

$4.0M-$6.0M

39

19

47

37

16

31

$6.0M-$8.0M

35

14

47

40

23

45

$8M+

26

9

32

30

21

43

Total Sales

213

102

271

249

100

192

Pebble Beach Market Overview

The Pebble Beach market saw a cooling this summer after a spree of four robust quarters with dynamic market conditions propelled by new and unrelenting demand, receding inventory levels and evolving local guidelines.

The 3rd quarter tallied up $120.2M in 27 sales, staying competitive with its 10-year rolling average of $101M and 37 sales, but falling well below the previous quarter (down 46% in dollar volume and 50% in sales volume) and further from 3Q20 (down 52% and 62% respectively).

With listings evaporating to rare lows - particularly in the MPCC and Upper Forest areas – activity in those areas stalled in Q3 while competition for properties in the prime locations heightened. In fact, the average discount from list price for all of Pebble Beach crossed into the positive territory (+1.1%) and notably the MPCC area where the supply-and-demand levels were most acute, averaged a staggering +3.8% above respective list prices.

A new high-water mark has been set for all of Pebble Beach with our sale of 3398 17 Mile Dr, a stunning one-of-a-kind property along Pebble’s iconic 13th fairway that closed just over $32.6M. This sale eclipses the previous alltime high-water mark we set next door (3392 at Mile Dr) at $31.25M in 2014.

The main headline for the Upper Forest this quarter came from the condo sub-market, which benefited from the absence of surrounding inventory, which elevated unit values an impressive 29% over the previous year.

Looking ahead to the 4th quarter, there is actually a fair amount in the deal flow pipeline with 21 listings under contract that total $72M in combined list prices. This pending deal flow would align Q4 on a comparable trajectory to the totals posted in Q3 and also be similarly competitive to Q4’s 10-year rolling averages of $96.7M in investments across 36.3 sales.

As we transition into fall from a busy summer season, we look forward to a return of bluer skies, clearer horizons and a slower pace around the area that accompanies fall.

Nic Canning Pebble Specialist

Featured Property Photo: 1471 Padre Lane, Pebble Beach 1471PadreLane.com

3Q2021 Update Pebble Beach

3Q2021 Sales by Price Range 3 1 5 3 5 1 5 2 2

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

27

Total Sales

$120M Total Dollar Volume

Get Smart

27 Units Sold in 3Q2021

3Q2021 Snapshot

29 Average Days on Market

46% decrease from 2Q21

52% decrease from 3Q20

49% decrease from 2Q21

61% decrease from 3Q20

54% decrease from 2Q21

61% decrease from 3Q20

3Q2021 Top Pebble Beach Sales 3398 17 Mile Drive 1289 Padre Lane 3020 Cormorant Road 1215 Sombria Lane 3363 17 Mile Drive 3301 17 Mile Drive #10 4032 Sunridge Road 1534 Riata Road 1410 Viscaino RD

$32,687,500 $8,500,000 $8,000,000 $6,400,000 $5,900,000 $5,800,000 $5,150,000 $4,475,000 $4,300,000

1417 Alva Lane 3158 Don lane 1604 Viscaino Road 2888 Galleon Road 4167 Sunset Lane 3158 Fergusson Lane 1106 Wildcat Canyon Road 1176 Arroyo Road 3115 Middle Ranch Rd

Indicates a Canning Properties Group Sale

$3,628,500 $3,250,000 $3,100,000 $2,950,000 $2,913,000 $2,850,000 $2,525,000 $2,500,000 $2,250,000

# of Sales

Quarterly Sales by Region

Central Pebble Beach

+1.1%

Average % off list price 3Q2021 Sales

Median Home Sales Price ($M)

MPCC

Upper Forest

strip t u o o t inues t n o c s d ices. r p Deman t f i l nd supply a

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

3Q2021

$2.93

36%

3Q2021

$4.58

26%

2Q2021

$3.50

11%

2Q2021

$4.59

4%

1Q2021

$2.75

79%

1Q2021

$4.04

118%

4Q2020

$2.33

15%

4Q2020

$3.68

3%

3Q2020

$2.15

-7%

3Q2020

$3.64

16%

Carmel

Market Overview Carmel slowed this quarter to just 44 sales, which is almost half the level we saw last quarter (59). However, with buyers continuing to pay a premium for being close to the beach, total investment was still very strong at $138M and median sales price lifted to $2.47M, nearly double that of 2011 ($1.2M). Demand is strongest below $2M, representing 17 of the deals this quarter.

There continues to be unmet demand currently with people requesting oversized cottages to host their extended family and friends, which we all know can be very hard to find, so houses with more than 2,000 sqft are snapped up instantly.

In order to lock-in deals, buyers were offering an average of 0.3% above list price in Carmel last quarter. This is the first time in over a decade that we have seen the sales price consistently match or surpass the list price. It’s worth bearing in mind that this is price point dependent, with houses over $6M going for 2.1% off of list price this quarter.

Northern Carmel accounted for the vast majority of sales this quarter, with 24 of the 44 deals closing, split evenly between Northeast or Northwest Carmel. Tight inventory continues to plague the prime parts of Carmel with the Golden Rectangle closing 7 deals this quarter ($44M) and Carmel Point with 4 for $18M, the lowest levels seen since 2Q20 when we locked down due to COVID. Those properties that come to the market in these regions do fetch a premium, with the average sales price in the Rectangle being $6M and Carmel Point over $4M.

Jessica Canning Carmel Specialist

Featured Property Photo : NEC of Scenic & 12th, Carmel-by-the-Sea NECScenic12th.com

3Q2021 Update Carmel

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

44

Total Sales

$138M

Total Dollar Volume

Get Smart

44

Units Sold in 3Q2021

3Q2021 Snapshot

30 Average Days on Market

3 1 4 6 8 5 11 5 1

23% decrease from 2Q21

41% decrease from 3Q20

25% decrease from 2Q21

52% decrease from 3Q20

22% decrease from 2Q21

40% decrease from 3Q20

3Q2021 Top Carmel Sales NEC of Scenic & of 9th Scenic 4 NE of 10th 2360 Bay View Avenue SWC Monte Verde & 13th 2561 15the Avenue NEC of Casanova & 12th 4 SW Casanova 8th Street #100 Lincoln 3NE of 10th 4SW Casanova 4th Street

$15,500,000 $8,500,000 $6,150,000 $5,250,000 $5,000,000 $4,950,000 $3,587,000 $3,500,000 $3,400,000

San Carlos 7 SW of 13th 26301 Carmelo Street Monte Verde 4 NE of 4th Mission 3 SW of 1st 2915 Alta Avenue 5 SW Torres Street NWC of Dolores Street SW Mission & 13th Torres 3NE of 6th

Indicates a Canning Properties Group Sale

$3,350,000 $3,335,000 $2,860,000 $2,800,000 $2,750,000 $2,700,000 $2,687,500 $2,600,000 $2,575,750

# of Sales

Quarterly Sales by Region

Carmel Point Northeast Carmel

Golden Rectangle Northwest Carmel

-0.39% Average % off list price 3Q2021 Sales

Median Home Sales Price ($M)

Hatton Fields Southeast Carmel

ltiple u m g n i e e s l We're stil many. s a t o n t u b offers,

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

3Q2021

$2.47

18%

3Q2021

$3.06

18%

2Q2021

$2.56

51%

2Q2021

$3.08

56%

1Q2021

$2.00

-10%

1Q2021

$2.67

-1%

4Q2020

$2.35

40%

4Q2020

$2.95

42%

3Q2020

$2.11

28%

3Q2020

$2.59

33%

Carmel Highlands Market Overview

In every way 2020 was unprecedented. This was particularly the case with real estate markets both locally and across the rest of the country. Indeed, standing alone within an anomalous year, 3Q20 saw the shattering of both the number of and the total dollar volume in sales records. And therefore, as we said goodbye to 2020, no one knew quite what to expect as we entered 2021.

But now, 3 quarters of the way through the year, we have enough data to render some accurate analysis: While it is the case that the extraordinary “COVID market” is over, it seems to have left us with a stronger and more steady “new normal." In 3Q21 we saw 11 property sales in the Carmel Highlands and Carmel Meadows.

This is significant in light of the 10-year rolling average for 3rd quarter sales of 6.5 (and which before 3Q20’s high-mark of 23 was a mere 4.5). We have had 26 closed sales so far this year (8 in 1Q, 7 in 2Q, and 11 in 3Q), which is not too far behind the 10-year rolling average for total annual sales in this area.

There are 11 properties currently active (7) or contingent (4). Some conclusions we can draw from these stats are: The Highlands and Meadows markets are ahead of the 10-year rolling average for both 3rd quarter and annual sales marks. Instead of wildly fluctuating numbers from quarter-to-quarter like we saw in 2020, there is a steadiness so far in 2021, with an impressive average of 8 sales a quarter. Inventory remains limited which is holding property prices at levels set during the 2020 market.

The Carmel Highlands and Carmel Meadows real estate market remains healthy going into 4Q21, and it even seems to have settled into a more consistent pace than we were experiencing a year ago. Therefore, it is still as good a time as ever to consider bringing your property to market. Canning Properties Group would be honored to meet with you personally and talk with you about working with us.

Dave Reese Highlands Specialist

Featured Property Photo : 237 Highway 1, Carmel Highlands 237Highway1.com

3Q2021 Update Carmel Highlands

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

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

11

Total Sales

$32.26M Total Dollar Volume

Get Smart

3Q2021 Snapshot

11

Units Sold in 3Q2021

53

Average Days on Market

23% decrease from 2Q21

41% decrease from 3Q20

57% increase from 2Q21

52% decrease from 3Q20

77% decrease from 2Q21

25% decrease from 3Q20

3Q2021 Top Carmel Highlands Sales 100 Yankee Point Drive 31541 Highway 1 2973 Cuesta Way 249 Highway 1 9 Sonoma Lane 2963 Cuesta Way 2950 Ribera Road 249 Highway 1 #A 185 Upper Walden Road

$7,100,000 $5,175,000 $4,175,000 $3,510,300 $2,695,000 $2,575,000 $2,029,000 $1,350,000 $1,250,000

Quarterly Sales by Region Carmel Meadows

# of Sales

Carmel Highlands

-0.9%

Average % off list price 3Q2021 Sales

Median Home Sales Price ($M)

nd new a s e l a s pace of .

Steadier ng prices i d l o h s i listings Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

3Q2021

$2.58

36%

3Q2021

$2.93

-5%

2Q2021

$7.35

20%

2Q2021

$7.41

41%

1Q2021

$3.09

-41%

1Q2021

$3.85

-21%

4Q2020

$2.83

122%

4Q2020

$3.51

44%

3Q2020

$1.90

5%

3Q2020

$3.09

28%

Quail Lodge/Meadows Market Overview

Demand for Quail Lodge’s single level homes, turn-key condos, and few remaining home-sites remained high due to its highly sought-after location, weather, school district, and recreational/ social amenities. The sub-region experienced another strong quarter with over $8.4M invested across 2 homes and 3 condos.

Buyers remained aggressive with each new home that became available, paying an average 1.98% premium over ask (32% higher QoQ) with just 7 days on market (down 74% QoQ). The average price per home was on par with the past year and quarter at $2.3M but the average condo sale was up 14% QoQ to an impressive $1.24. With no homes on the market and we have one in escrow, we see the market plateauing and likely slowing going into the fourth quarter.

Quail Meadows’ third quarter remained on a consistent pace with one home sale at $6.35M and no home-site sales. The beautiful 2016 contemporary yielded a sales price over 68% higher than Quail Meadows’s 10-year historical average and was on par with just over a 7% discount. This sale took 63% longer to sell than homes in the previous quarter, likely due to its higher price point, but there are two homes that recently went into contract just after an average of 25 days. Other than the contingent and pending homes, buyers will have to remain patient for new inventory or consider building on the two home-sites available in the community.

Brian Keck Preserve & Quail Specialist

Featured Property Photo : 5445 Quail Way, Quail Meadows 5445QuailWay.com

3Q2021 Update Quail Lodge/Meadows

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

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

6

Total Sales

$14.74M Total Dollar Volume

Get Smart

3Q2021 Snapshot

6

Units Sold in 3Q2021

46% decrease from 2Q21

21% increase from 3Q20

54% decrease from 2Q21

20% increase from 3Q20

10% increase from 2Q21

22% increase from 3Q20

30

Average Days on Market

3Q2021 Quail Lodge/ Meadows Top Sales 5435 Quail Meadows Drive 7013 Valley Greens Circle 7022 Valley Knoll Road 7020 Valley Greens Drive #21 7020 Valley Greens Drive #15 7020 Valley Greens Drive #19

$6,350,000 $2,803,500 $1,865,000 $1,295,000 $1,275,000 $1,150,000

Quarterly Sales by Region Quail Meadows

# of Sales

Quail Lodge

+0.5%

Average % off list price 3Q2021 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

3Q2021

$1.58

-27%

3Q2021

$2.46

1%

2Q2021

$2.40

63%

2Q2021

$2.10

42%

1Q2021

$1.68

20%

1Q2021

$1.82

-8%

4Q2020

$2.06

-37%

4Q2020

$2.33

-34%

3Q2020

$2.15

126%

3Q2020

$2.44

51%

Santa Lucia Preserve Market Overview

The second half of summer continued its trend of sunshine, increased fun outdoor Ranch and Golf Club activities, and social events that were well attended as more residents enjoy the Preserve Community. The third quarter remained strong, outpacing the previous quarter by an 82% margin, bringing in a total of $45.3M but significantly slowed by 38% from the same quarter last year.

Total home sales came in at $26.6M with 4 home sales, down 35% YoY, over double last quarter and up over four times the Q3 historical average. Days on market remained on par with last quarter at 37 days, showing a more efficient market with accurately priced homes and a balance between buyers and sellers. Discounts dropped to just 4.4% but the median sales price also rose significantly to $6.4M. Vacant land investments have remained strong on a longer-term historical basis but slightly cooled recently as labor constraints and building costs remain elevated. Total vacant land investments came in at $7.65M with 8 home-site sales, down from last year but still stay strong. Smaller discounts and shrinking days on market have been a trend over the past year, recently leveling off at 10% off and 247 days respectively. With consolidating inventory (35 active lots), the average price has moved north to $956K, up 3% YoY and up 15% QoQ. We currently have two home-sites in escrow, both well above the average selling price so buyers remain interested in quality lots.

Heading into Q4, we see the market plateauing and expect a slight taper with only one home on the market and none in escrow and discounts and days on market to remain low and the negotiating power remaining in favor of sellers.

Our team is honored to have represented the sellers of recordsetting 3 Penon Peak ($9M), as well as both sides of 37 Rancho San Carlos ($7M).

Brian Keck Preserve & Quail Specialist

Featured Property Photo: 9 Long Ridge Trail, Santa Lucia Preserve 9LongRidge.com

3Q2021 Update Preserve

3Q2021 Sales by Price Range 2 1 2 1 0 0 1 2 5

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

14

Total Sales

$45.3M

Total Dollar Volume

Get Smart

14

Units Sold in 3Q2021

3Q2021 Snapshot

157

Average Days on Market

82% increase from 2Q21

18% decrease from 3Q20

7% decrease from 2Q21

44% decrease from 3Q20

51% decrease from 2Q21

23% increase from 3Q20

3Q2021 Top Preserve Sales Homes Lots

3 Penon Peak Trail 9 Vasquez Trail 37 Rancho San Carlos Road 6 Garzas Trail 11 Garzas Trail

$9,000,000 $8,000,000 $7,000,000 $5,800,000 $4,850,000

17 Rancho San Carlos Road 23 Vasquez Trail 18 Potrero Trail 8 Corral Run 62 Chamisal Pass 20 Pronghorn Run 5 Black Mountain Trail 17 Chamisal Pass

Indicates a Canning Properties Group Sale

$1,550,000 $1,475,000 $1,400,099 $950,000 $700,000 $550,000 $525,000 $500,000

Quarterly Sales Preserve Houses

# of Sales

Preserve Lots

Homes | -4.4% Lots | -10.2%

ched a a e r s a h e v r The Prese ctivity a f o e c a p e l sustainab otiating g e n d n a y h t l and hea terms.

Average % off list price 3Q2021 Sales

Median Home Sales Price ($M)

Average Home Sales Price ($M)

Quarter

Median

YoY % Change

Quarter

Average

YoY % Change

3Q2021

$6.40

49%

3Q2021

$6.28

37%

2Q2021

$3.77

2%

2Q2021

$3.91

6%

1Q2021

$4.58

8%

1Q2021

$4.22

0%

4Q2020

$3.78

11%

4Q2020

$3.78

11%

3Q2020

$4.30

3Q2020

$4.57

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Canning Properties Group FOR TH E TH E TH E

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BEING RECO G NI ZE D BY 2021 REAL TRE NDS & WALL STREET J OURNA L T HOUSAND RA NKI NG S

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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

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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:00899496