Q1 2023 Market Report - Courtney Jones

Letter From Courtney

Dear Friends,

Q1 saw stock market and banking volatility, interest rate pressure and significant weather here on the Monterey Peninsula. As a result, buyers stayed home, average sales prices decreased 22%, marketing periods have doubled and sales volume is down by half–as compared to a year ago. Activity over $3M was low across the board. On the flip side, there is pent-up demand, inventory is increasing and interest rates may taper in the near future. Overall, we are still above the pre-COVID levels we saw in 2019. We predict Q1 will be our lowest period for the year and are planning to see an uptick in activity and an increase in pricing for the rest of 2023.

The following pages detail our specific market segments. There are some relatively good values out there for buyers, especially in Carmel Valley. And in Pebble Beach, where we saw an unprecedented 84% of sales under $5M, there was a decrease in value of about 5-10% from the peak of the market in June of last year.

As you consider the numbers in this report, please don’t hesitate to reach out with any questions about our transitional marketplace.

Best,

Courtney Jones

My Q1 Significant Sales

Camino Real 3 NE 8th Ave., Carmel-by-the-Sea ■ SP: $4.7M Represented Seller

8001 River Place, Carmel ■ SP: $2.93M Represented Seller

SWC Carmelo & 10th Ave., Carmel-by-the-Sea ■ SP: $4.15M Represented Seller

1086 Alameda, Monterey ■ SP: $1.335M Represented Seller

3rd Ave. 2 SE Lincoln, Carmel-by-the-Sea ■ SP: $3.45M Represented Seller

Market Overview

Affected by numerous external drivers, the Monterey Peninsula Real Estate market experienced a 5.5% reduction in transactions from Q4 of 2022 and a 36% reduction from the same quarter last year. This means the market performed comparably to national figures, which is impressive considering the region experienced extremely difficult weather during much of the quarter. The storms in Q1 delivered excessive rain, wind, flooding, and power outages throughout much of the area which made it very difficult to even show property. Combined with macro-economic pressures across the real estate market, high interest rates and geopolitical uncertainty, buyers transacted at very low levels compared to previous quarters. Looking even closer, these factors specifically affected the number of high-priced discretionary sales throughout Carmel and Pebble Beach, dropping total dollar volume and average sales price much more than usual. On a positive note, with extremely tight inventory, values have held up well across the Peninsula and continue to outperform the national market.

Across the markets we track on the Monterey Peninsula, the number of units sold during Q1 2023 was down 5.5% versus an already low Q4 of 2022, and down 36% from Q1 of last year. Average sales price held in stronger, down just over 10% quarter over quarter and down 22% against Q1 2022. Total sales dollar volume in the quarter was 50% lower than Q1 2022. This percentage is skewed by eight homes selling over $10M in Q1 of 2022 (compared to two in Q1 2023), with four of those coming in over $25M. These six additional high-priced sales made up almost 40% of the total sales volume difference between Q1 2023 and Q1 2022.

Moving forward, we are beginning to see the typical rise in inventory levels that come with the late spring season as we transition into summer. As of the end of March, our brokerage has seen a spike of internal listings and the market as a whole has 17% more active listings than the same time last year. With summer weather on the way, banking and financial concerns subsiding and the potential for interest rate easing, we have already seen more homes come on the market and buyers start to return as well. We expect the second quarter to outperform Q1 and hopefully build for a stronger second half of the year.

With so much pressure and volatility affecting our market right now, it is essential to work with an experienced and informed agent. Our agents have extensive hands-on local knowledge about every market and are truly market-leading experts across the Peninsula. Moreover, they are supported by a dedicated marketing and analytics team that allows for clients to make informed decisions and to maximize value when buying or selling.

The following report breaks out five of the markets we track with additional performance detail. We hope you will find this report informative. As always, please be sure to contact us if there is anything we can do to help you, or your friends and family, with real estate plans in our marketplace.

following report breaks out seven of the markets we track with additional performance detail. We hope you will find this report informative. As always, please be sure to contact us if there is anything we can do to help you, or your friends and family, with real estate plans in our marketplace.

CARMEL-BY-THE-SEA

Market Update

Although the average sales price in Carmel-by-the-Sea during Q1 2023 was shown to be down over 28% versus Q4 2022, it was right on par with Q1 2022 and 2021 as a whole, meaning prices are holding strong in the area. Just 16 sales during the quarter is the lowest we’ve seen in years, with the area typically showing over 30 sales per quarter. There was also just one sale over $5M in the quarter with 56% of the sales coming in the $3M-5M range. This lack of high-priced homes was a trend we saw in Q1 2023. Number of active listings to end the quarter rose to 27, the most since June 2022, showing promise for more sales moving forward.

$3,289,252

28.7% vs Q4 2022

1.3% vs Q1 2022

$52.6M 40% vs Q4 2022

vs Q1 2022

32 22% vs Q4 2022

3.2% vs Q1 2022

BY SEGMENT

16 15.8% vs Q4 2022

vs Q1 2022

Carmel-by-the-Sea & Carmel Point

GREATER CARMEL

Market Update

LikeCarmel-by-the-Sea, the Greater Carmel area showed prices holding strong at $1.8M. This number was consistent with three of the four quarters during 2022. Just 12 sales during the quarter is about half of typical sales numbers, but actually up from just 10 sales in Q4 2022. Eight out of 12 sales in the quarter came in the $1M-2M dollar segment.

$1,867,542 6.1% vs Q4 2022 0.1% vs Q1 2022

SALES VOLUME

$22.4M 27.3% vs Q4 2022 45.5% vs Q1 2022

54

8.5% vs Q4 2022

170% vs Q1 2022

12

20% vs Q4 2022 45.5% vs Q1 2022

Market Update

Carmel Valley had a very difficult quarter, especially on the high-end side of the market. Q1 2023 was very similar to Q4 2022 in many ways, with median sales price coming in at $1.3M in both quarters and number of sales tallying 39 this quarter versus 34 last quarter. The difference came in the lack of sales over $3M. There were zero sales over $3M in Q1 2023. During 2022, 15% of sales topped this number. As a result, average sales price dipped to $1.38M for the quarter and total sales volume fell 26% quarter over quarter.

$1,378,151

26.2% vs Q4 2022

24.4% vs Q1 2022

$53.7M

15.4% vs Q4 2022

37.3% vs Q1 2022

53

29.3% vs Q4 2022

65.6% vs Q1 2022

39

14.7% vs Q4 2022 17% vs Q1 2022

CARMEL VALLEY

Market Update

The lack of high-priced sales also affected the Pebble Beach market. With only four homes topping the $5M mark in Q1 2023, average sales price in the area saw its lowest number ($3.59M) over the past five quarters. In comparison, Q1 of 2022 saw eight sales over $10M, with four of those topping $25M, leading to the outlier in average sales price over $8.6M. 25 Sales in Q1 2023 is similar to what we have seen over the last year, but still down about 33% from years prior to 2022. Under $90M in total sales volume for the quarter is trending toward 2018 and 2019 sales dollar volume levels, but we expect this to pick up with the return of high-priced sales later this year.

$3,593,600 29.1% vs Q4 2022 58.3% vs Q1 2022

SALES VOLUME

$89.8M

19.4% vs Q4 2022 58.3% vs Q1 2022

34 43.3% vs Q4 2022

24.4% vs Q1 2022

25

13.6% vs Q4 2022 no change vs Q1 2022

PEBBLE BEACH

CARMEL HIGHLANDS

Market Update

InCarmel Highlands and Big Sur, Q1 of 2023 was like that of the previous quarter, showing just 5 sales (versus 4) and sales dollar volume totaling just over $14.6M (versus $14.3M). No homes over $5M sold in the quarter, when last year 32% of the homes sold were in this category. This brought average sales price for Q1 2023 down below $3M for the first time since Q1 2021. Median sales price ($2.97M) actually topped average sales price, again showing the lack of high-priced sales in the area.

$2,920,000

vs

107

vs

vs Q1 2022 5

vs

vs

Carmel Highlands, Big Sur & South Coast

PACIFIC GROVE

Market Update

Pacific Grove had its highest average sales price on record in Q1 2023 at $1.7M, slightly topping Q1 of last year. While we saw homes selling quickly in this area over the last few years, average days on market jumped up to 54 days for the quarter, the highest since 2019. Inventory is still low, but slowly increasing, now up to 15 at quarter end. After seeing 30 sales in the quarter once again, we expect to see this number climb closer to the typical average in the low 40s.

SALES BY SEGMENT

$51.3M 20% vs Q4 2022 0.3% vs Q1 2022

54

45.9% vs Q4 2022

68.8% vs Q1 2022

30 no change vs Q4 2022

no change vs Q1 2022

Market Update

Average sales price in Monterey held strong ($1.25M), topping 2022’s full-year average. Median sales price also reached a record high at over $1.2M. This shows prices are not adjusting in this area. This is also proven by the movement of homes from the $800K-$1.2M range up into the $1.2M-2M range, with 40% of sales in Q1 falling in the latter. While prices remain strong, the number of sales fell to 42, less than half the sales we saw in Q1 2022 and the lowest dating back to 2010.

$1,254,137

10.8% vs Q4 2022

1.1% vs Q1 2022

$52.7M 1.1% vs Q4 2022

vs Q1 2022

24

31.4% vs Q4 2022

SALES BY SEGMENT

4.3% vs Q1 2022

42

8.7% vs Q4 2022 54.3% vs Q1 2022

MONTEREY & DEL REY OAKS