Merritt’s Market Update

Monterey Peninsula

May, 2013

©2013 Merritt Ringer

Read, Seen, or Heard

“Far better it is to dare mighty things, to win glorious

triumphs, even though checkered by failure, than to take rank

with those poor spirits who neither enjoy much nor suffer

much, because they live in the gray twilight that knows not

victory nor defeat.”

~ Teddy Roosevelt (you can almost hear his teeth gnashing)

This mansion in St. Petersburg, Russia, was a utilitarian café

(stolovaya) where I had my first & last borscht, with Russian

friends in 1971. Recently, renovators found a treasure trove

hidden in the floorboards during the Revolution.

Table of Contents

The Big Picture………………….….…….………... 3

Distressed Properties……………….…….………... 4

A Couple Homes…………………………………… 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

Just a couple graphs about the macro scene.

In a time of high unemployment, we cut jobs.

The deficit is climbing toward balance.

DISTRESSED PROPERTIES

"Foreclosure starts were already trending much lower late last year because of

rising home prices, a stronger labor market and the settlement agreement between

the government and some lenders. But it appears last quarter's drop was especially

sharp because of a package of new state foreclosure laws - the 'Homeowner Bill of

Rights' - that took effect January 1. Default notices fell off a cliff in January, then

edged up. In recent years we've seen temporary lulls in foreclosure activity after

new laws kick in and lenders adjust. It's certainly possible foreclosure starts will

pick up at some point this year if lenders need to play a lot of catch-up," said John

Walsh, DataQuick president.

A COUPLE INTERESTING RECENT SALES

1,400 days it took to sell this Carmel home near the lagoon & River Beach.

Before the financial crisis, it was listed once for $3.995M and it did eventually sell

for $2.665M in 2008 (that sale took some time, too). This time, they started at

$2.8M, eventually asked $2.4M, and finally closed for $2.2M.

This was a beautiful modern home in a very private setting just above Carmel

Valley Village. Its story shows both the weakness of the Valley market & the low

allure modern architecture has here. They started out at $3.950M and stepped

slowly down to $2.295M. 539 days after they began, they entered escrow and

closed for $2,060M.

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: 3.625%

5/1 ARM: 2.625%

Jumbo (over $483,000 here)

30 year fixed: 4.120%

5/1 ARM: 3.375%

The addition of a point reduces the rate .125-.250%.

CARMEL: NEW ESCROWS

Our market continues to roar along with 33 new escrows in April. This marks the

third month in a row with 30 or more sales. Almost 60% of the sales (20, in fact)

were asking a million or more, as the upper end continues to throttle up. Exactly

one was a distressed sale, a bank-owned house east of Hwy One.

Although visitors continue reliably to say, “there sure are a lot of homes on the

market”, we know inventory is down by almost a quarter, while sales are up by

almost a quarter the last three months.

CARMEL CLOSED HIGH & LOW

8 days was all it took to sell this 9-year old home on Scenic. It had only 2 bed-

rooms (both suites) and 2,000 sf. They asked $6.5M and got $6.3M. The second

most expensive sale, on the corner of Mission/Santa Lucia, gave additional proof

of the pace of the high end here: it sold the instant it hit the market for $4.8M.

Lot value was about all this mess of home on Via Margarita could muster. It was

so poor, it couldn’t be financed. But it did have a 10,454 sf lot & water credits. It

took all of 14 days to sell for $385K.

CARMEL VALLEY: NEW ESCROWS

Three months in a row now, Carmel Valley has rung up 24 new escrows. We did

see an doubling of distressed sales from two to four, split evenly between short

sales and bank-owned. Just 3 new sales were asking over a million, half what the

high end showed the previous month. When you consider that 47 unsold homes

are listed over a million, the fact that only 3 sold in this price range last month

shows that the upper end of the Valley market remains a tad tepid; meanwhile, the

market below a million (36 active vs. 21 new sales) is quite vigorous.

Compare the first 4 months of 2013 with those of 2012 and we rising sales &

falling inventory.

CARMEL VALLEY CLOSED HIGH & LOW

Quail Meadows furnished the top sale last month. With 4 BR/3.5 baths, this home

had over 5,000 sf and 3.5 acres. In 2005, just as the market began to slip, this

home spent 6 months on the market at $4.975M. This time, it still took 4 different

prices and 303 days to get into escrow and to close for $1.920.

A condo at Hacienda Carmel, with 2BR/2BA, was the month’s lowest priced sale.

It took just 21 days for them to get $308.5K.

PEBBLE BEACH: NEW ESCROWS

Pebble saw 9 new sales last month; this is the third month in a row that we have

seen sales volume decline; we are now at just over half the volume of February.

Only one new sale was distressed. Only one was over a million, also a swerve

from recent months. Unlike Carmel, the upper end of Pebble is a bit pokey: one

million plus sale and 62 homes listed over a million.

Pebble is not so obviously improving as some our other markets. Notice how

inventory has slipped, though.

PEBBLE BEACH CLOSED HIGH & LOW

I thought this pile was over-wrought; at least one buyer did not agree with me. It

was big: 4BR/3BA (+ 2 half-baths), 7900 sf, on 1 1/2 acres near the Lodge. It sold

for $6.1M.

A 2,088sf, 3BR/2.5BA home in Country Club East was the sole closing in Pebble

below $1 million last month. It took about a month to get $735,375.00.

PACIFIC GROVE: NEW ESCROWS

Pacific Grove witnessed 22 new sales in April. One was bank-owned and four

were short sales. One was listed over a million; one was over two million. The

days on market for last month’s sales ran the gamut from 2 days to 401 (though

once it was priced right, this holdout sold in just 12 days).

PG’s market seems hot just now not so much because of new escrows (last year

didn’t begin badly) as because inventory has become relatively scarce.

PACIFIC GROVE CLOSED HIGH & LOW

With big ocean views, this home on Arena was last month’s top seller. The home

had 3BR/2BA in 3,071 sf. In 2004, it sold for $2.9M. Then, it was on and off the

market for the last 4 years, experimenting with prices that steeped down from

$3.950M to the final asking, and selling, price of $2.560M.

A condo on Lighthouse took the bottom spot. It had just 1BR/1BA and 842 sf. It

sold for $300K.

MONTEREY: NEW ESCROWS

Monterey, our perennial high flyer in volume, racked up 29 new escrows last

month. One was bank-owned & four were short sales. Just one new sale was over

a million. The other sales spanned all sub-million price ranges with just 10 under

$500K.

While Monterey’s sales are robust, they were last year, too. What makes this year

different is that inventories are lower.

MONTEREY CLOSED HIGH & LOW

A traditional home in Deer Flats with 4BR/3BA & 3,390 sf on a 8,800 sf lot was

the top seller last month. It took just 18 days to sell for $1.080M.

A Casanova condo took the bottom rung (& not for the first time). With 1BR/1BA

in 567 tiny sf, it took 280 days to sell for full price: $92.5K.

MONTEREY-SALINAS CORRIDOR: NEW ESCROWS

(east to San Benancio)

The corridor saw 11 new sales last month. Two were bank-owned; 3 were short

sales. Three of the sales were asking over a million and 3 were asking under $500K.

2013 is starting out not that different from 2012 in terms of new sales. Inventories

are down by around 16%.

MONTEREY-SALINAS CLOSED HIGH & LOW

In the Pastures of Heaven, this 23 acre property featured a big home + guest house,

totaling 5,744sf, with 5BR/4BA+3 half-baths . . . and a big barn. It sold for $2.1M.

Off Corral de Tierra, with 2BR/2BA in 1200 sf, but 2+ acres, this home sold in 7

days for $457K.

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.

9 new sales in Marina last month. One was bank-owned; 3 were short sales. Only

one was listed over $500K.

Seaside saw 15 new sales. Three were bank-owned; 4 were short sales. Only one

was listed over $500K.

A composite graph of Marina & Seaside. Tight, tight, tight.

Seaside Highlands again took top spot. With 3300 sf, 4BR/3BA, it was a short

sale that closed for $615K.

Attractive marketing like the photo above no doubt helped this home capture the

bottom rung of the market. It did sell the day it hit the market, which suggests it

was priced at, or under, the market. It closed for $208K.

SEASIDE CLOSED HIGH & LOW

An Agent’s Life

Big Sur, just before dawn, the coastal layer having flowed in

over night like a 400 foot tall tide.

Thank your for taking a few minutes with my e-magazine. Your

comments & 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

Merritt’s Market Update

©2013 Merritt Ringer