Strength of the Monterey Peninsula Market Continues. A look at the most Competitive Price Points.
The Monterey Peninsula is made up of several different cities and communities each with unique character and market dynamics. With a deep understanding of each of these markets, this report groups the Monterey Peninsula as Carmel, Pebble Beach, Pacific Grove, Monterey (+ Del Rey Oaks), and Seaside (+ Sand City).
Sales Transactions Through July
The 2016 Monterey Peninsula year-to-date sales numbers through July look similar and slightly stronger than the past two years. Expect this to continue moving into the fall, which is traditionally a busy time of year for Monterey Peninsula real estate.
Multiple Buyer Types
Certain markets and price points are extremely competitive with several different types of buyers. These include: First time homebuyers, second/vacation homebuyers, investors for remodels (i.e. "Flippers"), and investors for rental properties.
Competitive Price Points
When homes come on the market below certain prices in each respective market they receive an offer(s) quick.
A valuable "Competitive Price Point" metric for each market is the average of the median sales price.
- A "median price" is that half the homes sell above that price and half sell below that price.
- The metric of both "Year-to-Date and "12 Months" illustrates the moving competitive price point.
Competitive Price Points
|
Year to Date Jan. - June 30, 2016 |
12 Months June 2015 – June 2016 |
|
|
Carmel |
$1,478,750 |
$1,429,167 |
|
Pebble Beach |
$1,524,833 |
$1,526,833 |
|
Pacific Grove |
$858,667 |
$838,625 |
|
Monterey |
$747,542 |
$721,229 |
|
Seaside |
$458,724 |
$435,779 |
Illustrating the Point
To illustrate the point, let's look at one market, Pacific Grove, and the properties currently under contract.
- As of August 3^rd in Pacific Grove there are 21 homes in escrow.
- The "Competitive Price Point" metric is $858,667
o 9 homes in escrow are above this ($875,000- $3,350,000) with average days on market of 95 days.
o 12 homes are in escrow below this ($589,000 - $815,000) with an average days on market of 44 days – less than half of those above.
Key Takeaways
For homebuyers and home sellers the main takeaways are:
Homebuyers: Trying to buy a home below the Competitive Price Point requires a well-prepared and solid offer. This includes cash or all pre-qualifications complete so that you are ready to present an offer (with limited contingencies) right when the house comes on the market. For those above the Competitive Price Point, there is an inverse correlation as to how many potential buyers there are based on the price. As price increases, there is less competition (buyers) for the property.
Home sellers: For the same reason, trying to sell a home above the Competitive Price Point takes a longer time. Make sure to be transparent with all information and inspection reports to reduce any friction or opposition of why a buyer might object to writing an offer. For those homes priced below, having pre-inspection reports is also important, as you can expect a more active listing and having this information readily available for buyers helps invoke confident offers that maximize the value of your property.
In addition to this report you can find monthly market reports on all of the individual markets at MarkBPeterson.com/market-info.
For a personal introduction to the different neighborhoods of the Monterey Peninsula and a business analysis of real estate, contact Mark Peterson at (831) 238-1380 / [email protected] MarkBPeterson.com @markbpeterso
