Peter Butler's 2012 Real Estate Annual Market Report

Peter Butler P r o p e r t i e s

2012 Annual Report

As the market drives into 2013... ...I’d like to think that the worst is over! Despite all the craziness surrounding the election and rhetoric about the fiscal cliff, 2012 was really a pretty strong year for the real estate market here in Pebble Beach.

Most markets throughout the country are getting better and some are actually red hot! While attending the most recent Who’s Who in Luxury Real Estate conference, I was surprised to hear a number of agents desperately complaining about the lack of inventory and the abundance of ready, willing and able buyers. That is the supply & demand prescription for...rising prices! Although I don’t expect prices to start measurably going up here for quite some time, there are numerous market indicators pointing towards better times ahead.

Considerable pent-up demand remains in the market.

Helping to spur on the increased demand is the fact that mortgage interest rates have been at or near their lowest levels in over 40 years.

Obtaining a mortgage these days is far more difficult than before the 2008 financial market implosion but lenders are far hungrier now than Peter Butler, Realtor | Managing Director at any time I have seen since then. Home builders also had a very good year with new home starts up to the highest level since 2008 while new home sales were at the highest level since 2009. These are leading indicators of market trends to come. Additional good news is that the unemployment rate is now also at the lowest level since 2008.

In summary, 2012 saw more sales and higher prices in shorter timeframes than we have seen here in many years. Numerous properties sold for much more than I thought they would sell for and there were less distressed sales. Hopefully, all these trends continue and 2013 will be equally as positive.

ACTIVE LISTINGS The number of Active Listings in Pebble Beach at the end of 2012 was 59. This is the lowest number since 2005 - a time many would refer to as the peak of the market. The highest number of Active listings on the MLS, perhaps ever, was in August of 2010 when there were 132!

The number of Active Listings at the beginning of November was 81, meaning that 22 properties came off the market in the final 60 days of the year – that equates to a 27% reduction in the MLS inventory. If the current 59 active listings were roughly divided into thirds, the list price for the top 21 ‘high end’ properties (21/59=36%) would all be listed for over $4M; the ‘middle market’ properties (also 21/59=36%) would range in list price from $2-4M and the ‘low end’ (17/59=28%) would be all the properties listed for under $2M. However, there does remain a considerable “hidden inventory” of discreetly available properties for sale that are not actively listed on the MLS.

2012 saw more sales at higher prices and in shorter timeframes than in numerous years.

PENDING SALES: The number of Sale Pending properties at the end of 2012 had dipped to just 13. This number also went down by 27% in the 60 days from November 1st to December 31st from 18 to 13.

I think the two primary factors at play here are (1) the seasonal trend that many people do not want to think about buying, selling and moving during the holidays and (2) the reduction of Active Listings available in the marketplace for buyers to choose from.

The most expensive property in escrow at year end was a very dated home on a great ocean lot at 1512 Bonifacio - it was listed for $4.499M and I’m guessing will close for around $4M. I expect that nearly half of the 13 Sale Pending properties will sell for less than $1M - a further reflection that the low end of the market continues to be the most active.

CLOSED ESCROWS: 128 properties were sold in Pebble Beach in 2012, making it the most active year in terms of number of transactions since 2000 when 142 properties closed escrow. The average Days on Market for those 128 properties was 159 (just over 5 months) with 29 (23%) of those sales essentially happening as soon as the property hit the market. That is a very high percentage and denotes the much higher velocity at which our market is starting to move. Additionally, 39 of the 128 sold properties (30%) closed for above, very near, or at the full List Price - this too is a very high percentage showing the strength of our market. Upon closer analysis of the numbers, it is clear that these very meaningful statistics are derived principally from properties priced at the lower end of the pricing scale.

The most interesting sale to me in 2012 would have to be that of Townhouse #8 at The Lodge which was listed for $7M and sold for $5.7M after being on the market slightly more two months. This was a completely remodeled, contemporary style, 3 story home with great ocean views and, of course, in very close proximity to The Lodge. This is the highest price ever paid for a Townhouse at The Lodge – the previously highest priced sale was #7 that sold for $4.225M in May of 2005.

Pebble Beach Real Estate Analysis

Sales & Inventory Summary Single Family Homes as of 12/31/12

CURRENT INVENTORY LIST PRICE Active Pending Less than $1,000,000 9 5 $1,000,000 - $2,000,000 8 4 $2,000,000 - $3,000,000 12 2 $3,000,000 - $5,000,000 19 2 $5,000,000 - $10,000,000 7 0 $10,000,000 and over 4 0 Total 59 13

2012 SALES SALES PRICE 1st Q 2nd Q 3rd Q 4th Q Less than $1,000,000 16 13 13 15 $1,000,000 - $2,000,000 7 11 11 11 $2,000,000 - $3,000,000 4 0 4 2 $3,000,000 - $5,000,000 1 2 1 1 $5,000,000 - $10,000,000 2 2 3 0 $10,000,000 and over 0 0 0 1 Total 30 28 32 30

Totals 57 40 10 5 7 1 120

5-YEAR MARKET REVIEW SALES PRICE Less than $1,000,000 $1,000,000 - $2,000,000 $2,000,000 - $3,000,000 $3,000,000 - $5,000,000 $5,000,000 - $10,000,000 $10,000,000 and over Total Avg. Days on Market Avg. Sales Price

2008 2009 2010 2011 2012 22 27 38 47 57 32 25 23 24 43 15 10 10 13 13 14 6 7 11 6 8 3 4 3 8 2 0 2 1 1 93 69 86 98 129 219 152 156 174 152 $2,449,332 $1,729,192 $2,022,394 $1,741,782 $1,661,808

5-Year Average 38.2 29.4 12.2 8.8 5.2 1.2 95 170.6 $1,920,902

Information believed to be reliable as obtained from the Monterey County Association of Realtors R.E.: Infolink and known off-market transactions.

Peter Butler’s Listings

Pebble Beach | $8,950,000 | 1601 Sonado Road 4 Beds, 5 Full & 2 Half Baths | 6,856 Sq. Ft. | www.1601Sonado.com

Pebble Beach | $6,495,000 | 1041 Marcheta 4 Beds, 4 Bath | 4,634 Sq. Ft. | www.1041Marcheta.com

Pebble Beach | $4,200,000 | 3106 Flavin Lane 4 Beds, 4.5 Baths | 7,807 Sq. Ft. | www.3106Flavin.com

Pebble Beach | $3,900,000 | 3130 Flavin Lane 6 Beds, 6.5 Baths | 7,358 Sq. Ft. | www.3130Flavin.com

Pebble Beach | $3,250,000 | 3301 17 Mile Drive Townhouse #17 4 Beds, 4 Baths | 4,273 Sq. Ft. | www.PBTownhouse-17.com

Pebble Beach | $2,250,000 | 3061 Bird Rock Road 4 Beds, 3 Full & 1 Half Bath | 4,365 Sq. Ft. | www.3061BirdRock.com

Carmel Valley | $2,975,000 | 8 Vista Ladera 4 Beds, 3 Full & 1 Half Bath | 4,723 Sq. Ft. | www.8VistaLadera.com

Listed & Sold by Peter Butler in 2012

P r e v i o u s ly L i s t e d & S o l d s

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3294 Stevenson | 5 bd, 5.5 ba | 7,689 sq. ft.

LP: $5,950,000 | SOLD: $5,600,000 1.2.12

3113 Bird Rock | 4 bd, 3.5 ba | 3,543 sq. ft.

LP: $2,200,000 | SOLD: $2,000,000 1.6.12

1310 Portola | 6 bd, 5+ ba | 8,288 sq. ft.

LP: $8,600,000 | SOLD: $6,400,000 1.17.12

14 San Clemente | 5 bd, 5.5 ba | 7,019 sq. ft.

LP: $4,350,000 | SOLD: $2,350,000 1.30.12

3181 Bird Rock | 3 bd, 3 ba | 2,269 sq. ft.

LP: $3,100,000 | SOLD: $2,500,000 2.6.12

1036 Rodeo | 3 bd, 3 ba | 2,714 sq. ft.

LP: $4,500,000 | SOLD: $4,250,000 3.2.12

1536 Viscaino | 2 bd, 2 ba | 1,968 sq. ft.

LP: $1,200,000 | SOLD: $1,200,000 7.7.12

5482 Quail Meadows | 4 bd, 5+ ba | 6,725 sq. ft.

LP: $4,250,000 | SOLD: $3,850,000 8.31.12

1046 Marcheta | 4 bd, 4 ba | 3,493 sq. ft.

LP: $1,950,000 | SOLD: $1,850,000 9.26.12

3073 Hermitage | 4 bd, 3 ba | 2,464 sq. ft.

LP: $1,100,000 | SOLD: $965,000 10.31.12

1261 Lisbon | 6 bd, 5.5 ba | 7,397 sq. ft.

LP: $2,400,000 | SOLD: $1,875,000 11.20.12

3065 Valdez | 3 bd, 3.5 ba | 2,267 sq. ft.

LP: $1,375,000 | SOLD: $1,325,000 11.29.12

Sold by Peter Butler in 2012

2930 Bird Rock | 4 bd, 4 ba | 2,927 sq. ft.

LP: $2,250,000 | SOLD: $2,025,000 3.23.12

949 Sand Dunes | 5 bd, 4+ ba | 5,680 sq. ft.

LP: $5,200,000 | SOLD: $4,700,000 6.1.12

3167 Del Ciervo | 7 bd, 8 ba | 7,100 sq. ft.

LP: $6,950,000 | SOLD: $5,640,000 7.3.12

3301 17 Mile Drive #16 | 4 bd, 3.5 ba | 2,728 sq. ft.

LP: $2,495,000 | SOLD: $2,200,000 8.31.12

975 Cayuse | 4 bd, 3 ba | 3,053 sq. ft.

LP: $1,795,000 | SOLD: $1,700,000 10.3.12

1145 Spyglass Hill | 3 bd, 3.5 ba | 2,459 sq. ft.

LP: $3,595,000 | SOLD: $3,150,000 12.12.12

Previously Listed & Sold by Peter Bulter

3325 17 Mile Drive | 4 bd, 6.5 ba | 9,244 sq. ft.

LP: $8,000,000 | SOLD: $6,500,000 6.10.10

2976 Cormorant | 4 bd, 4 ba | 3,700 sq. ft.

LP: $3,950,000 | SOLD: $3,600,000 7.14.10

3273 Ondulado | 4 bd, 6.5 ba | 4,397 sq. ft.

LP: $3,950,000 | SOLD: $3,400,000 11.10.10

3307 17 Mile Drive #4 | 3 bd, 3.5 ba | 3,535 sq. ft.

LP: $2,950,000 | SOLD: $2,444,000 6.29.11

1 Arbor Lane | 5 bd, 4 ba | 5,057 sq. ft.

LP: $3,850,000 | SOLD: $3,575,000 10.7.10

1211 Padre | 5 bd, 4 + ba | 5,332 sq. ft.

LP: $3,950,000 | SOLD: $3,300,000 12.13.11

Peter Butler

Lives, Works & Plays in Pebble Beach!

C: 831.277.7229 | F: 831.250.5225 PeterButler@CarmelRealtyCompany.com www.PeterButlerProperties.com