merritt's peninsula market update: october 2012
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Read & Heard
A little different view of our real estate market:
In 1990, Voyager 1 photographed the earth (in the superimposed
blue circle) from the outer edge of our solar system.
“That's us. On it everyone you love, everyone you know,
everyone you ever heard of, every human being who ever
was, lived out their lives . . . – on a mote of dust suspended in
a sunbeam.”
Carl Sagan
Table of Contents
The Big Picture…………………….…….………... 3
Distressed Properties……………….…….………... 4
Prices…………………………………….………… 5
Financing………………………………….……….. 6
Carmel………………………………...….….…… 7-8
Carmel Valley…………………………..….……… 9-10
Pebble Beach………………………...……….…… 10-11
Pacific Grove…………………………….…….…..12-13
Monterey…………………………………....….…..14-15
Monterey-Salinas Corridor………………...……. 16-17
Seaside & Marina ………………………...……… 18-19
An Agents Life …………………...….…...…….…..20
End Note …………………………………………....21
Caveat: I’m no economist (despite the performance of
most, this is not a boast). I also lack the gift of prophecy;
from the evidence, I’m not alone. But our real estate
market is buffeted and buoyed by all manner of larger
forces, so I do watch the horizons. I also dig into our
local market. The information here is as reliable as I can
make it, but nothing like comprehensive.
THE BIG PICTURE
Falling inventory is a national story (above) but also local, as the 2-year chart of
Carmel, Carmel Valley & Pebble Beach shows. Several causes underlie this and
one result is a firming of prices as slowly rising demand chases falling supply.
DISTRESSED PROPERTIES
Another measure of improvement. Compare this year’s numbers (courtesy of LPS)
to last year.:
Aug 2012 Aug 2011
Homes delinquent less than 30 days: 1.910M 2.240M
Homes delinquent over 90 days: 1.520M 1.720M
Homes in foreclosure: 2.020M 2.120M
Total distressed: 5.450M 6.080M
These numbers are still way above historic norms, yet show steady improvement.
Due largely to foreclosures and short sales, household liabilities have fallen over a
trillion dollars since the onset of the downturn.
Shadow inventory - seriously delinquent, in foreclosure & bank-owned, all of
which are not on the market - is also declining.
PRICES
Sometimes, I like to glance at inflation-adjusted home prices. Nationwide, the
gains of the last decade are gone but prices are turning up.
Case-Schiller, a lagging index that usefully compares only same-house resales,
once again showed rising prices.
I will soon do an in-depth analysis of prices on our Peninsula and share the results
with you.
FINANCING
Rates
Rates fluctuate by the second and different lenders offer various packages, so the
numbers below are just a snapshot.
The rates below are for loans without points.
Up to $417,000
30 year fixed: 3.375%
5/1 ARM: 2.5%
Jumbo (over $483,000 here)
30 year fixed: 4.625%
5/1 ARM: 3.5%
The addition of a point reduces the rate .125-.250%.
CARMEL: NEW ESCROWS
We saw 25 new escrows in September. While this is lower than the 30 we racked
up in August, it is a good number and I suspect it’s just the natural, rather random
fluctuation we see in a discretionary market like ours. Eleven of the new sales
were over a million, as the higher end continues to strengthen. Two sales were
bank-owned and two were short sales. Remember that there was a time when half
our sales were distressed and total sales ran between 7 and 15 per month.
CARMEL CLOSED HIGH & LOW
On 4th/Casanova, this home sold the middle of 2010 for $1.1M. It was then
completely remodeled, with 300sf added, bringing the total to 3400+ sf. It then
listed at $3.695M; it closed for $2.850.
In 2011, the owners tried to sell this 1 bedroom/1 bath condo just south of 4th on
Mission for $475k, eventually working their way down to $349.5. Then, they
rested for 7 months, returned at that last price, and sold in 14 days for $335k.
CARMEL VALLEY: NEW ESCROWS
We saw 21 new escrows in the Valley in September, snapping back smartly from
the oddly slow August. In a change from recent months, a third of these were over
a million. For a long time now, we’ve seen vigor at the low end of the market,
but now the higher end is coming back, as it is all around the Peninsula. Only one
of the new sales was bank-owned; but 4 were short sales.
CARMEL VALLEY CLOSED HIGH & LOW
Off Tierra Grande, this 3200+ sf home had 4 bedrooms/ 3 baths and big valley
views. This home was on & off the market repeatedly, starting 2007. They
experimented with many prices ten different prices and finally closed for $1.450M.
On Rancho Fiesta, about a mile before the Grade, this tiny 1 bedroom / 1 bath
home was semi-renovated and bank-owned. It closed for $320k.
PEBBLE BEACH: NEW ESCROWS
Pebble saw 15 new sales in September, nearly double the August total. Almost
half these escrows were listed over a million, reflecting a Peninsula-wide trend
toward more sales at the high end. One of the new escrows was listed at $15M; if
it closes, it will hold the record for the longest journey, weighing in at 2,287 days
on the market (I’ll add detail when it closes). We saw only one new bank-owned
sale and one short sale, as Pebble starts to leave the bad times astern.
PEBBLE BEACH CLOSED HIGH & LOW
This was a short sale on Portola Road. The main house was 7100 sf, with 5
bedrooms/ 8 full + 2 half baths, and a couple of other buildings, all on about 3
acres. The owners bought 31 years ago, but refinanced several times until they
owed $4.890M. They came on the market in 2010 for $8.450. They then took the
usual journey of a thousand cuts & one busted escrow to reach $3.686M; they
closed escrow for $3.450M.
Country Club East served up the least expensive sale last month with this 4
bedroom home on Larkin. An agent bought the home, reducing the price with the
commission to an effective closing price of $670.9k.
PACIFIC GROVE: NEW ESCROWS
PG saw 18 new escrows last month, a mild and meaningless dip from the previous
month. Two short sales at the bottom of the market were the sole signs of distress
in September. Only one new escrow was over a million but most of the rest but
half the sales were between $535k-690k, the solid center of our market.
PACIFIC GROVE CLOSED HIGH & LOW
On Ocean View Blvd, this custom home was built in 2007. The floor plan was a
bit eccentric but the ocean views were panoramic. Listed at $2.275M, it sold in
less than a month for . . . $1.550. An example why, under certain conditions,
buyers should not be afraid to make offers.
The photo accurately captures this home in Del Monte Park. But in real estate, any
home is a great home at the right price. Listed at $1.99k, it sold fast with multiple
cash offers (nobody would lend on the thing) and closed for $280k.
MONTEREY: NEW ESCROWS
Monterey continued to rip with 26 new escrows in September. Three of these new
escrows were listed over a million. But the big news is the decline in distressed
activity with just 4 bank-owned and one short sale.
MONTEREY CLOSED HIGH & LOW
Deer Flats delivered last month’s highest sale. Listed at $699.9k, this single-level
3BR/2BA home bordered greenbelt, and sold in a couple months for $659k.
Cypress Park on Casanova served up our lowest priced sale. 2BR/2BA with just
under 900 sf, it was listed and sold for $225k, though it took 118 days.
MONTEREY-SALINAS CORRIDOR: NEW ESCROWS
(east to San Benancio)
We saw 15 new sales last month, continue the cruise along that plateau of volume
which we’ve seen now for some months. Two of the sales were over a million. But
half of the transactions were distressed: 3 bank-owned and 5 short sales. The
corridor continues to be plagued by distress more than most areas of the Peninsula,
which have seen such sales decline dramatically.
MONTEREY-SALINAS CLOSED HIGH & LOW
A bank-owned, gated, 23 acre estate, with a 5 bedroom, 7 bath, with numerous
upgrades, closed for $1.668M.
A bank-owned remodeled 2/2 home on Hwy. 68, with 1400sf closed for $320k.
SEASIDE & MARINA: NEW ESCROWS
Seaside and Marina are, of course, very different cities. But buyers for one always
look at the other, as well. So, I’ll combine them here and offer varied snapshots
each month.
Marina saw 16 new escrows in September. Over half the sales were in the
$300,000s. Only 2 were bank-owned and there were 7 short sales. As the chart
below shows, sales are exceeding supply. Price rises seem inevitable.
Just 10 new escrows opened in Seaside last month. Only one was bank-owned and
3 were short sales; quite different than the profile of what closed in September,
when 77% of the closings were distressed sales.
Seaside captured both the high & low end last month. The Highlands, as usual,
had the top price with a short sale (also, as usual). Very fancy 3400 sf 4 bedroom
home with $160k of upgrades. It sold slightly above the asking price, closing at
$621k.
A remodeled 2/2 condo entered escrow in 17 days; it was a short sale and took 4
months to close at full price, for $189.9k.
SEASIDE & MARINA CLOSED HIGH & LOW
An Agent’s Life
Photo courtesy of Paul Gutierrez
Your agent plays Pebble Beach & demonstrates that, if
you don’t take yourself too seriously, there’s more than
one way to sink a par putt.
Thank your for taking a few minutes with my e-magazine. Your com-
ments & questions are welcome. Let me know about issues you’d like to
see addressed here or stories and facts you’d like others to know.
Know anyone thinking of buying or selling, someone who would benefit
from informed & straight counsel? Please keep me in mind. Referrals
like yours are the heart of my practice.
© Merritt Ringer 2012
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