2022 Annual Market Report | Monterey Coast Realty

2022 Annual Market Overview

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Following two years of extraordinary growth, the real estate market on the Monterey Peninsula has normalized. The number of transactions, total dollar volume and average sale prices all hit record highs beginning in the second half of 2020 and continuing into the first half of 2022. However, beginning in the summer of 2022, the number of transactions and total sales dollar volume has returned for the most part to pre-COVID levels. The positive news is that while transaction volume is down significantly from the previous two-year peak, home values on the Peninsula are holding up nicely. In this regard, once again, our market is greatly outperforming most markets across the country. Across the nine markets we track here on the Peninsula, the number of units sold was down 31% in 2022 over 2021, and total sales dollar volume was down 25% in the same period. With the slowdown in sales beginning in summer, the Q4 year-over-year comparison is even more dramatic. The number of sales in Q4 2022 was 235, compared to 478 homes being sold in Q4 2021. Total sales dollar volume in the market in Q4 2022 compared to 2021 was nearly cut in half as well.

While we are clearly being affected by economic pressure, our market was also down in sales due to historic low inventory levels. With continued healthy demand to live on the Peninsula, home values have remained strong. While it is difficult to measure value in real time, our analytics team has run a variety of analysis that all point to pricing holding up much better than transaction volume. We believe that home prices remain steady in some markets across the Peninsula and are down just a bit in others. Considering the value appreciation we experienced in home prices in 2020 and 2021, any small correction we experience now will be much less, and home values will remain well ahead of where they were prior to the pandemic related spike.

With so many drivers 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 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 all nine 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.

Quarter 4 of 2022 in Carmel-by-the-Sea experienced what many areas saw in terms of number of sales falling. Just 19 homes sold during the quarter, down 32% from Q3 2022 and 60% from Q4 of 2021. Although the number of sales fell, the sales mix involved more higher priced sales than usual. This resulted in a record-high average sales price of $4.6M. Even with this high average price, total sales volume was at its lowest point since Q2 of 2020.

CARMEL-BY-THE-SEA MARKET UPDATE

reater Carmel had just 10 sales in the quarter and 73 for all of 2022, the lowest of any full year since 2011. 59 average days on market was over double what we have seen in the area over the past three quarters. Total sales volume of $166M during 2022 was down from the last two years, but still up substantially over every year prior to 2020.

CARMEL VALLEY MARKET UPDATE

Carmel Valley experienced a difficult fourth quarter with only 34 sales, lower than every quarter since Q1 of 2019. For the year, units sold was down 36.5% and total sales volume down 34.4% versus 2021. While we saw average sale price come down a bit near the end of the year, Carmel Valley still set a yearly record in the category, topping $1.9M for the first time.

PEBBLE BEACH MARKET UPDATE

The sales mix in Pebble Beach turned up several higher price sales in Q4 of 2022 versus the previous quarter, resulting in average sales price increasing 29.3% quarter over quarter. Seven out of 22 homes sold in the quarter topped the $5M mark. For the year, Pebble Beach saw only 94 homes sold. This was the first time under 100 sales for the year since 2011. Average sale price for the year was $5.6M, up over 31% from 2021. Total sales volume for the year was $532M, down 20% from last year, and yet the second highest on record.

CARMEL HIGHLANDS MARKET UPDATE

only four sales and $14M in total sales volume during Q4, this area had its worst statistical quarter since the pandemic. For the year, average sale price was up over 25% versus 2021, the second highest increase of any are we track, behind only Pebble Beach. To begin 2023, 16 homes remain on the market, showing signs that this coming quarter and year has potential for an increase in sales.

MONTEREY MARKET UPDATE

Monterey had a very difficult quarter, it’s worst of 2022, after a strong start to the year. In Q4 of 2022, the area experienced it’s lowest average sale price ($1.1M), median sale price ($1.0M), number of sales (46), and total sales volume ($52M) of the year. Number of sales for the year came in at 264, down from 412 in 2021, 334 in 2020, and 315 in 2019. Even with prices dropping in Q3 and Q4, Monterey still set a yearly record of average sale price at $1.25M and median sale price at $1.05M.

PACIFIC GROVE MARKET UPDATE

Pacific Grove had a down Q4, after a strong Q3 in 2022. Average sale price dipped to $1.42M, the lowest of the year and since Q2 of 2021. Only 30 sales for the quarter tied Q1 of 2022 for the lowest of the year. Fifty percent of the sales for the quarter took place in the $800k-$1.2M range, showing lower priced homes are selling later in the year and sale price may be decreasing overall in the area. The highest sale segment for the year was the $1.2-2M range (42%).

Seaside had a slow last quarter of 2022, but had a nice year overall. Only 30 sales took place during Q4 for a total sales volume of $25.7M, each being the lowest of any quarter this year. During all of 2022, average sale price was up 9% compared to last year, allowing total sales volume to come down just 9.4% (the smallest decrease in total sales volume of any area on the peninsula).

MARINA MARKET UPDATE

The Marina and East Garrison market stood strong and had a consistent Q4 when compared to the rest of 2022. Average sale price during Q4 actually hit a record high, topping $900k. The 40 sales in the quarter was right on pace with the 2022 quarterly average. The average days on market did rise to 39 days, up from 32 last quarter and just 13 days in Q4 of 2021. For all of 2022, total sales volume came in 17.7% down from 2021 with 24.4% fewer homes sold.