Santa Clara County 1Q 2023 Single-Family Housing Market Data

Santa Clara County’s 2023 first-quarter sales are down 35% from the same quarter one year ago, and the median price is down 14%. The caveat of reading too much into the quarter comparisons is that the year-ago metrics reflect a growth spurt due to motivated buyers intent on purchasing before interest rates increased. This year, March’s median price and sales numbers rose above the trend in the last week, indicating a positive harbinger for April’s price and volume performance.  

The chart below (and below) includes pre-pandemic years for comparison. (Pinch-out to enlarge chart)

Santa Clara County homebuyers are absorbing most of the available inventory, with 85% of inventory contingent/pending in March. (pinch-out to enlarge chart)

The chart below shows first-quarter year-over-year data from a sample of cities/areas in Santa Clara County.

The two largest volume areas, Santa Clara and San Jose, experienced the most significant drop in median single-family home prices in the first-quarter when compared with the first-quarter of last year. Santa Clara’s median single-family home price is down 20%, and San Jose’s declined 16% Q1 year-over-year. Sales volume decreased by 51% in Santa Clara and 38% in San Jose. 

The median double-digit price declines are consistent across most price segments, except Saratoga and Los Gatos, with single-digit declines, albeit on small sales volume. (Pinch-out to enlarge chart)

The chart below gets more granular, looking at data by price segment. The percentage drop in sales is the most significant, starting just above the median county price, with sales down between 48-52%. Days on the market have risen significantly, more than double, with the exception of the $800K-$1.1M price segment, where demand is high and available inventory remains low.

Bay Area and Monterey Peninsula 2022 Year-End Update

It was a difficult second-half of the year for house prices in the Bay Area. By December, the data show median prices in the combined counties of Santa Clara, Contra Costa, Alameda, San Mateo, Santa Cruz, and Monterey had returned to the median price of January 2021, and just fractionally above Q4 of 2020 – erasing the outsized paper gains of 2021 and the first-half of 2022. (Below, pinch-out charts to enlarge).

Reflecting on last year’s poor economic performance, inflation and rising interest rates shook homebuyers’ confidence, while stock markets roiled investors with the worst downturn since 2008. The Dow lost 8.8%, the S&P was down 19.4%, and Nasdaq sank 33.1%. Last year also saw longstanding recession determinants or indicators, such as two successive quarters of negative GDP, and a protracted yield-curve inversion, conveniently memory-holed after a cursory explanation that “this time is different.” (Below, the chart may indicate a housing market not having a ‘different this time’ reaction to deteriorating metrics.)

In terms of what comes next, looking to economists and housing market prognosticators with reputations for accurate and unbiased forecasting, almost unanimously, predictions are for a shallow recession and flat national home prices. However, home prices in the Bay Area and Central Coast are expected to decline slightly, due in part to higher price gains during the pandemic housing run-up, escalating tech layoffs, Nasdaq’s retreat, and the Crypto collapse. 

Economic Forecasts 2023

• The Conference Board

“The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in early 2023. We currently anticipate three-quarters of negative  GDP growth starting in Q1 2023.”

• S&P Global

“We expect a mild recession will begin early next year with the subsequent recovery to begin in the second half of 2023. On an annual basis, we expect GDP to expand just 0.3% from 2022 to 2023.”

• Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group. 

“Housing Sales Forecasted to Hit Trough in Q2 2023 Before Beginning to Rebound.”  [We] expect the economy to tip into a modest recession in the first quarter of 2023. Full-year 2022 GDP growth is now expected to be 0.0 percent.”

Perhaps the best explanation about why this market will remain in the doldrums comes from the Economic and Strategic Research (ESR) Group: “A significant contributor to the ESR Group’s pessimistic home sales path remains the so-called “lock-in effect,” in which homeowners have a significant financial disincentive to move because they hold mortgages well below current market rates. Right now, the ESR Group estimates that, as of October month-end, more than 80 percent of borrowers had a mortgage rate at least 200 basis points below current market rates, by far the largest share in decades.” [Underline emphasis added]

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Bay Area and Monterey Peninsula: 4Q22 October Update

The Bay Area’s housing market has hit the quarter’s midpoint and is moving toward finishing a year weighed down by rising interest rates and increasingly bearish housing sentiment.

Risk avoidance and rising interest rates appear to be driving the decision-making of many market participants. This leaves a market of mostly niche buyers and sellers, e.g., cash buyers, high-net-worth individuals, sellers moving out of California, retirees seeking to downsize, second home sellers, and investors needing to offload an underwater property.

The second-half data show a housing market in decline. However, without an appreciable build-up of inventory, there is not enough momentum for a housing price correction of a magnitude that will offset market risk and high-interest rates.

Since the Federal Reserve’s stated objective is to continue raising interest rates until inflation subsides and the housing market is “reset”, we may be in for a difficult 2023, as neither inflation nor home prices are moving in the direction of the Fed’s desired outcome.

Yet there are ‘some’ signs of normalization — at least in the relationship between market participants. A market that was unaccommodating for buyers not so long ago is transitioning. Competition has waned, negotiations are back, and buyers’ preferences have moved toward homes that are ready to move into and enjoy. Sellers have pivoted toward high-level marketing strategies and a willingness to be more accommodating toward buyers’ needs and wants.

Below, the largest counties are still moving down in median prices, at percentage declines that exceed seasonality.  October values are lower YOY in all counties, except Monterey.

Below, a table of the data charted above.

Below is an already outdated chart from just last week. The Federal Reserve raised rates 75 basis points on Oct 2, and the 30 YR fixed rate is now at 7.2%.

Below, the Sale-to-List Price Ratio is below 100% in most counties. (Not charted, the sale-to-original-list price ratio for Alameda, Contra Costa, and Santa Clara counties in October was 101.9%, 96.8%, and 97.5%, respectively, indicating higher numbers of price reductions). For perspective, the sales-to-list price ratio in October 2021 in Alameda was 112.8%, in Contra Costa 106%, and in Santa Clara 109.1%

Below, New Listings remain low and in a seasonal pattern.

Below, Sales (which lag) and Pending Sales (a timelier indicator) are moving down together, but so is inventory. This prevents downward price pressure. However, the absorption rate spread (sales/listings) is widening, which will slowly increase inventories as current listings stay on the market longer.

Days on the Market are significantly higher than in October 2021.

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Monterey Peninsula and Bay Area 3Q 2022 update

The unwinding of the housing boom continued from the second quarter into the third quarter. Quarter-over-quarter price declines occurred in all counties. Third-quarter year-over-year median single-family home prices were down in the counties of Alameda, Contra Costa, and San Mateo. Santa Clara County, Santa Cruz County, and Monterey County remained positive on Q3 year-over-year median prices, while the Monterey Peninsula was positive on all price comparison metrics.

Santa Clara County:
YOY: 3Q22 over 3Q21 + 0.9% |Sep YOY +2.48% | 2Q22 to 3Q22 -12.23%
San Mateo County:
YOY: 3Q22 over 3Q21 -5.26% | Sep YOY -6.3% | 2Q22 to 3Q22 -15.25%
Alameda County:
YOY: 3Q22 over 3Q21 – 2.34%| Sep YOY -4.76% | 2Q22 to 3Q22 -13.8%
Contra Costa County:
YOY: 3Q22 over 3Q21 -1.7% |Sep YOY 1.04% | 2Q22 to 3Q22 -10.36%
Monterey Peninsula:
YOY: 3Q22 over 3Q21 +16.35% | Sep YOY +22.78% |2Q22 to 3Q22 +0.9%
Monterey County:
YOY: 3Q22 over 3Q21 +3.29% | Sep YOY +0.6% | 2Q22 to 3Q22 -2.57%
Santa Cruz County:
YOY: 3Q22 over 3Q21 +3.90% |Sep YOY +0.58% |2Q22 to 3Q22 – 7.40%

County median home price declines from peak through September were larger than long-term average declines (e.g., in Santa Clara County 2013-2019 from peak to September the average decline was -6.9%).

2022 Peak to September percentage declines:

• Santa Clara County -15.38%
• Alameda County -20%
• Contra Costa County -11.2%
• San Mateo County -22%
• Santa Cruz County-25%
• Monterey Peninsula – 6.16%
• Monterey County -10%

Drilling down on the six-county data to the citywide level, there were four instances found where September’s median prices were below January’s. The declines occurred in San Jose, Fremont, Antioch, and San Mateo. This has not happened in 14 years.

• San Jose (Santa Clara County): Jan $1,520,000| Sep $1,445,000 -4.93%
• Fremont (Alameda County): Jan $1,630,000 | Sep $1,510,000 -7.36%
• Antioch (Contra Costa County): Jan $656,000 | Sep $627,500 -4.34%
• San Mateo (San Mateo County): Jan $1,777,000 | Sep $1,717,500 -3.34%

The real estate market has cooled over a relatively short period, with new bearish forecasts into 2023 for continuing inflation, a recession, and probable stagflation. Rapidly rising interest rates, a weak economy (except employment), and financial uncertainty about the future has deteriorated housing sentiment. (According to a recent Fannie Mae survey, confidence is at its lowest level since 2011).

Going forward, inventory will be the metric to watch. While low inventory levels and reduced new listings had provided somewhat of a protective price floor in prior quarters, the narrative is changing, causing a growing pessimism that will raise inventory levels as sales volumes wane.

The data suggest this is a market favoring cash buyers and/or buyers with a risk tolerance for absorbing declining prices in order to purchase a property that meets current needs.

Below, Bay Area/Monterey Peninsula third quarter 2021-2022 median price chart (pinch-out to enlarge)

Average Days on the Market: September year-over-year percentage increase:

• Santa Clara County + 73%
• Alameda County+ 180%
• Contra Costa County +93%
• Monterey County +67%
• San Mateo County +43%
• Monterey Peninsula +25%

New Listings: September-over-September and quarter-over-quarter:

• Santa Clara County: Sep YoY -21.43% | QoQ -22%
• Alameda County: Sep YoY -15.77% | QoQ -18.10%
• Contra Costa County: Sep YoY -22.54% | QoQ -19.30%
• San Mateo County: Sep YoY -11.23% | QoQ -17.31%
• Monterey County: Sep YoY -17.76% | QoQ -20%
• Monterey Peninsula: Sep YoY -25.37%|QoQ -28%

The new listing component of overall listings has ticked up in several counties but should decline from October-December, following seasonal patterns.

Below, Salinas, Monterey County, Santa Cruz County, and the Peninsula listing levels were up year-over-year in September, with sales levels down below averages from 2017 through 2021.

Below, both sales and listings are moving down in a typical seasonal pattern except in San Mateo County with listings and sales trending up. (San Mateo has less than half the sales and listings of the larger counties, making the monthly numbers jumpy).

   Monterey Peninsula and Bay Area first-half 2022 update

Bay Area and Monterey Peninsula housing data in 2Q22 showed a directional shift in metrics, including declining median home prices that deviated from typical price seasonality.

Inventories in Santa Clara, Contra Costa, and Alameda Counties are now close to pre-pandemic levels. Sales volumes are edging downward, with month-over-month decreases exceeding long-term averages. Months of inventory are rising, exceeding pre-pandemic quarter-over-quarter averages.

However, not all counties are experiencing the same changes in metrics. Monterey County and Santa Cruz County show fewer signs of stress, due in large part to extremely low inventory.

While any hint of “normalization” should be a welcome change, the data indicate a rate of change that may be accelerating too rapidly and is more indicative of a substantial slowdown.

With the Federal Reserve expected to raise the fed funds rate by an aggressive 75 basis points at the July FOMC meeting, and Gross Domestic Product forecast as negative for the upcoming July 28 print, we may be weeks away from officially calling a recession.

Key Performance Metrics for selected counties: 

Below are 1H 22 updates for six Bay Area counties and the Monterey Peninsula, with key additional performance metrics for five counties, a long-term chart of seasonality in median home prices, and a detailed chart that shows housing market performance during recessions.

(Chart below) Median house price movements from the first half of 2021 through June 2022 are charted in San Mateo, Santa Clara, Alameda, Contra Costa, Santa Cruz, and Monterey counties (including the Monterey Peninsula areas of Carmel-by-the-Sea, Carmel, Carmel Valley, Pebble Beach, Monterey, Pacific Grove, Seaside and Marina – combined for larger data capture).  The chart below shows median home prices peaking earlier in the first half of 2022 compared to 1H 2021, and (not charted) in prior years.

Seasonal price movements

The long-term chart below of combined Bay Area counties shows the seasonal pattern of house prices, typically peaking at the end of the first half of the year, then followed by declining home prices into December/January.

The columns with horizontal stripes represent January, with the lighter columns representing June. The upward slope of median house prices toward June (white arrows) is consistent with a healthy housing market. The circled red arrows coincide with recessionary periods (2007-2009 and the brief recession in 2020). The earlier downward price movement pattern in 2022 is similar to the two prior recessions charted. (pinch-out to enlarge)

Recessionary Chart 1988-2020

The chart below shows home price declines through four recessions and dates back to 1988. The grey text box in the upper left of the chart highlights primary causes for recessions, dating back to 1969.  The textbox on the right for the first half of 2022 cites ongoing U.S. economic issues that both encompass and exceed prior recession causes.

Three housing indices are compared, along with the NASDAQ (green line) which is represented on the right axis.  The housing indices are quarterly numbers and do not capture price movements contained in monthly data. The S&P Case-Shiller and HPI Index use repeat sales of single-family homes that factor in distinct property attributes, e.g., size, view, and upgrades of the same property over time – which is information not captured by other databases. The repeat sales method’s downfall is its delayed data release, which is two months, and too long a lag time in a dynamic market.

Note: The axis for charting the indices is a point index. (pinch-out to enlarge)

Charted below are three pre-pandemic years through the great run-up of 2020 through Q1 2022 (Additional metrics are provided for each county below the charts). Note the inverse relationship between active listings and the number of sales beginning in 1H22.

Santa Clara County

• The median home price was up 16.30% in the first-half of 2022 to $1,855,000 versus $1,595,000 in 1H21
• The median home price in the first-half of 2022 peaked in April at $1,950,000
• Median sales price in June was up 4.17% over June 2021 ($1,725,000 vs. $1,800,000 June 2021)
• Number of sales in June was -14.88 % below the three-year June pre-pandemic sales numbers
• 26% of June listings had price reductions
• Active listings rose 52% in June YOY (compared with June of last year) but remain -5.6 below the 3 YR pre-pandemic average
• New Listings were up in June, 3% above the 3YR pre-pandemic average
• Contingent /Pending listings were down -42.52% June-over-June and -26.82% below the 3 YR pre-pandemic average
• June inventory levels are still -6% below the 3 YR pre-pandemic average for June
• Months of Inventory in June was 7.14% above the three-year pre-pandemic average
• Sale to List Price ratio was 106.5% in June compared with 109.8% in June 2021
• On average homes sold in 14 days in June, compared with 12 days in 2021

Alameda County

• The median home price was up 16.12% in the first-half of 2022 at $1,405,000 versus $1 210,000 in 1H21.
• The median price peaked in March at $1,500,000
• Median sales price in June was up 8.53% over June 2021 ($1,400,000 versus $1,290,000 in June 2021)
• 28% of June listings had price reductions
• Inventory rose 69% in June YOY (compared with June of last year)
• June inventory levels are 6% over the pre-pandemic 3 Year June average
• Months of Inventory in June were 28% higher than the three-year pre-pandemic June average (1.5 months versus 1.17)
• Sale to List Price Ratio in June was 114.8%, down from the year’s high in March of 121.8% and down 1.7% from June 2021.
• On average homes sold in 14 days in June compared with 12 days in June 2021

Santa Cruz: INVENTORY  REMAINS LOW

• The median home price was up 15.92% in the first-half of 2022 at $1,365,000 versus $1,177,500 in 1H21
• The median home price in the first-half of 2022 peaked in March at $1,600,000
• Median sales price in June was up 13.25% over June 2021 ($1,325,000 in June 2022 versus $1,170,000 in June 2021)
• 30% of June listings had price reductions
• Inventory is down -20% in June YOY (compared with June of last year)
• June inventory levels are down -16% from the 3 YR pre-pandemic average for June
• Months of Inventory is 17% below June 2021 (2.1 months versus 2.53)
• Sale to List Price ratio was 103.6% in June compared with 107.5% in June 2021
• On average homes sold in 18 days in June, versus 13 in June 2021

Monterey Peninsula (Combined data for Carmel-by-the-Sea, Carmel, Carmel Valley, Pebble Beach, Monterey, Pacific Grove, Marina, Seaside)  INVENTORY REMAINS LOW

• The median home price in the combined ZIP codes was up 0.18% in the first-half of 2022 to $1,400,00 versus $1,397,500 in 1H21.
• The median home price in the first-half of 2022 peaked in January at $1,582,500
• Median sales price in June was down -0.74% from June 2021 ($1,350,000 vs. $1,360,000 June 2021)
• 26% of June listings had price reductions
• Inventory is down -2.53% in June YOY (compared with June of last year)
• Sales are down up 6.6% June-over-June and down -21% from June pre-pandemic 3 YR average
• June inventory levels are -53.5% below the 3 YR pre-pandemic average for June
• Sale to List Price ratio was 100.4% in June compared with 104% June 2021
• On average homes sold in 34 days in June, compared with 36 days in June 2020

Contra Costa County

• The median home price was up 3.33% in the first-half of 2022 at $930,000 versus $900,000 in 1H21
• The median price peaked in April @ $980,000
• Median sales price in June was down -2.63% over June 2021 ($950,000 versus $925,000 in June 2021)
• 34% of June listings had price reductions
• Inventory rose 77.34% in June YOY (compared with June of last year)
• June inventory levels down -16% over the pre-pandemic 3 Year June average
• Sale to List Price Ratio in June was 105.7%, down from the year’s high in February of 111.8% and down 1.8% from June 2021
• On average homes sold in 16 days in June compared with 12 days in June 2021

San Mateo County

• The median home price was up 81%  in the first-half of 2022 at $2,050,000 versus $1,850,000 in 1H21
• The median home price in the first-half of 2022 peaked in April at $2,250,000
• Median sales price in June was down -0.05% over June 2021  ($2,051,000 in June 2021 versus $2,050,000 in June 2022)
• 23% of June listings had price reductions
• Inventory rose 30% in June YOY (compared with June of last year)
• June inventory levels are 1.83% above the 3 YR pre-pandemic average for June
• Sale to List Price ratio was 109.0% in June compared with 110.8% in June 2021
• On average homes sold in 14 days in June, equal to June 2021
• The area sales-mix changed slightly in the second quarter with 3 out of the 5 top sales volume areas in the over $2M segment versus only one area in the over $2M segment in Q1

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The charts, tables, and referenced published material on this page are compiled to ensure that the information is obtained from reliable sources.  The information is not intended to be a source of advice regarding the material presented, and the information contained does not constitute investment advice. Due diligence is advised. Diane Loren Keith, Broker DRE 01715098   831-521-4918 . Regional, local, and neighborhood in-depth data, return tables, and custom reports are available for clients upon request.

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Monterey Peninsula and Bay Area Counties: March 2022 Housing Market Update

March continued the housing market’s ascent, although the stellar performance reflects purchase contracts signed in January and February, ahead of rapidly rising interest rates and before economic and geopolitical news turned decidedly negative. Presently, we are beginning to see pockets of inventory buildup (in the Bay Area and nationally, above seasonal trends) and a ‘slight’ easing of the exacerbating competition that has plagued buyers for nearly two years. This should ‘slowly’ develop into a market slightly more kind to buyers.

Below, all active listings are up from the floor reached in 4Q 21. The new listings component (within the data, not charted separately) rose in March year-over-year, with Santa Clara County up 5.5% (Gilroy, Morgan Hill up 14.7%) and Alameda County up 3.97%. Exceptions to the upward trend were Contra Costa County at -0.14%, and San Mateo County with -1.06% fewer new listings than March 2021.

Below, the Federal Reserve Bank of Atlanta’s forecast for Q1 Gross Domestic Product as of the first week of April is an anemic 0.8846%.

Market Headwinds: Inflation

Below is an already outdated chart on inflation from just weeks ago. The new print is up from 7.9 to 8.5%.

Illustrated by the chart below,  rapid spikes in energy prices precede most recessions. 

Consumers Tapped Out

Below, consumer credit card debt is soaring, ending the pandemic spending spree that contributed heavily to economic growth.

Below, the rapid rise in mortgage interest rates (though still historically low) is expected to slow down the housing market, which the Federal Reserve recently called “exuberant.”

Monterey Peninsula and Bay Area Counties: Housing Market Performance 2021

Bay Area and Monterey County single-family median home prices achieved significant gains in 2021, with prices up between 14-24% year-over-year.

 Local Markets: Carmel, Carmel Valley Pebble Beach, Monterey, Pacific Grove, Marina, Seaside, and Salinas

The charts below show a demand spike during the pandemic into higher-end price segments. (Note: Carmel Valley measures the rise in homes selling over $1.3M, not $2M).

The chart below shows the rise in median home values from pre-pandemic levels (grey and green bars) through 2021.

This continues to be a supply-demand imbalance-driven market. Beginning in 2Q20 inventory levels (green line) followed a downward pattern with sales numbers (purple) showing consistently high demand. Median year-over-year gains are displayed in the grey boxes.

Monterey Peninsula and Salinas Year-over-Year Housing Metrics

Carmel-by-the-Sea ZIP code 93921

Southwest Carmel had the highest number of sales in 2021, with a median price of $3,600,000 versus $3,200,000 in 2020, a gain of 12.5%. Carmel-by-the-Sea’s 4rth quarter of 2021 ended with the lowest level of inventory on record.

• Carmel-by-the-Sea’s median price in 2021 was $2,772,500, a gain of 22.5% from 2020.
• The Sale to List Price Ratio in 2021 was 102.3% versus 97.3% in 2020.
• Number of Sales increased 29% over 2020.
• Inventory declined 65% from 2020.
• Days on the market was 28 days compared to 56 in 2020.

Carmel ZIP code 93923

The year ended with the lowest level of inventory on record, with only 18 active listings. The 3YR monthly average (pre-pandemic) inventory level was 118. The area with the highest number of sales was Quail Meadows/The Preserve, with an 80% increase in sales versus 3 YR average pre-pandemic levels. The median sales price in Quail Meadows/The Preserve was $3,950,000 in 2021. Looking toward more ‘affordable’ Carmel, Northeast Carmel homes sold at a median price of $1,472,500, and Carmel Views/Rancho Rio Vista sold for $1,977,500.

• The median price in 2021 was $2,300,000, a gain of 19% over the median price in 2020.
• The Sale to List Price Ratio in 2021 was 99.8% versus 96% in 2020.
• Number of Sales increased 12% over 2020.
• Inventory declined 49% in 2021.
• Days on the market decreased to 45 days, compared to 80 in 2020.

Carmel Valley

In Carmel Valley, the median Single Family home cost $1,506,250 in 2021 and sold in 57 days for 98.3% of the list price. The year ended with December having the lowest level of inventory on record. December also had the highest median sales price at $1,725,000.The area with the most sales in 2021 was Village Views with a 74% increase in the number of sales over 2020. The median price in Village Views was $1,787,500 in 2021, a 15% premium over 2020. Miramonte area saw a 35% increase in area sales over 2020 with a median price of $2,040,000 versus $1,900,000 in 2020, up 7.36%.

• The median price in 2021 had a gain of 13.25% over 2020 with a median price of $1,330,000.
• The Sale to List Price Ratio in 2021 was 98.3% versus 97% in 2020.
• The Number of Sales increased 13% in 2021.
• Inventory declined 39% from 2020.
• New Listings decreased in 2021 versus 2020 by 23%.
• Days on the Market increased slightly to 57 days on average for the year, up from 55 days in 2020.

Pebble Beach

• Pebble Beach’s *median price in 2021 was $2,995,000, compared with a median price of $2,262,500 in 2020.
• The Sales to List Price Ratio in 2021 was 97.5% versus 93.5% in 2020.
• Number of Sales in 2021 decreased 3.57% from 2020.
• Inventory declined 46% from 2020.
• Days on the market was 46 in 2021 compared to 75 days in 2020.
• *The 32.37% median price gain in Pebble Beach was due to low sales volume coupled with a 53% increase in buyer demand within the Lodge area, where the median price was $8,337,500.

Monterey

The quarter ended with the second lowest level of inventory on record, with 25 active listings. New Monterey had the highest sales volume in 2021, with a median price of $930,000. Pasadera/ Laguana Seca/Bay Ridge/Hidden Hills had the #2 spot in sales volume, with a median price of $2,158,000.

• Monterey’s median pricein 2021 was $1,160,375, compared with a median price of $945,500 in 2020, an increase of 23%.
• The Sale to List Price Ratio in 2021 was 101.5% versus 97.6% in 2020.
• Number of Sales increased 23.45% over 2020.
• Inventory declined 22% from 1Q20.
• Days on the market was 30 days, compared to 51 days in 2020.

Seaside

The mid-Broadway area of Seaside had the highest sales volume three years running, with a YOY gain of 15%.

• The median price in 2021 was $713,750, compared with a median price of $599,450 in 2020, an increase of 19%.
• The Sale to List Price Ratio in 2021 was 102% versus 99% in 2020.
• Number of Sales decreased -by 9% from the number of sales in 2020.
• Inventory remained flat with 2020.
• Days on the market was 19 compared to 22 days in 2020.

Marina

Marina’s highest sales and median price point area in 2021 was Marina Heights/The Dunes & East Garrison, where the median price in 2021 was $857,778, compared with $775,000 in 2020, a gain of 12.6%.

• Marina’s median price in 2021 was $737,944, compared with a median price of $635,000 in 2020, an increase of 11%.
• The Sale to List Price Ratio in 2021 was 102% versus 99% in 2020.
• Number of Sales decreased 3.5% from the number of sales in 2020.
• Inventory declined 57% from 2020.
• Days on market was 12 days, compared to 30 days in 2020.

 Salinas

Northgate/Sherwood Gardens/Santa Rita neighborhoods took the top spot in the number of homes sold in Salinas. The area had a 20% gain in median price at $580,00 and a sales number increase of 49% in 2021. In 2020 the top sales area was San Benancio/Harper Canyon/Corral De Tiera. The area had a median price of $1,177,500 in 2021 but fell to 7th place in sales numbers.

• The Salinas median home price in 2021 was $685,000, compared with a median price of $605,000 in 2020, an increase of 13.22%.
• The Sale to List Price Ratio in 2021 was 102% versus 100% in 2020.
• Number of Sales increased 34% from the number of sales in 2020.
• Inventory declined 49% from 2020.
• Days on the market were 16 days, compared to 27 days in 2020.

The charts, tables, and referenced published material on this page are compiled to ensure that the information is obtained from reliable sources.  The information is not intended to be a source of advice regarding the material presented, and the information contained does not constitute investment advice. Due diligence is advised. Diane Loren Keith, Broker DRE 01715098   831-521-4918 . Regional, local, and neighborhood in-depth data, return tables, and custom reports are available for clients upon request.

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First-half 2021 with August Update: Monterey Peninsula and Bay Area Single-Family Housing Market

House price gains accelerated in 2Q21 through June, with a return to seasonal median price deceleration beginning in 3Q and expected through January. Housing metrics remain bullish with inventories historically low, as are interest rates. Forecasts are calling for a cooling off through winter with price appreciation lower next year.

The stock market continues its ascent with solid earnings, positive forward revenue guidance, and bullish analysts’ projections into 2022.

The wildcard could be the economy, with econometrics remaining dynamic yet disappointing, primarily in forward GDP predictions. The University of Michigan’s consumer sentiment index plunged in August to levels not seen since 2011.  Consumers’ pent-up demand after coming out of lockdown is waning and inflation fears are on the rise, yet few prognosticators are bearish. Signals remain jumpy but without any solid trend.

Below, pre-pandemic through August 2021 charts, with some explanatory notes on the Bay Area and Monterey Peninsula.

Most notable in the charts is the continuing decline in inventories in Salinas, Marina, and Pacific Grove (last series).

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2021 Q1 Key Metrics: Monterey Peninsula and Bay Area Single-Family Housing Market

In 1Q21, the combined median single-family home cost $1,673,750 and sold in 44 days for 98.4% of the list price.

• The median home price increased 19.7% in 1Q21 over 1Q20.
• Inventory decreased -43% in 1Q21 from 1Q20.
• Sales were up 45% in 1Q21 over 1Q20.
• Average days on the market (DOM) decreased from 101 in 1Q20 to 44 days in 1Q21.
• Sale to List Price Ratio increased to 98.4% from 95.5% in 1Q20.

The Monterey Peninsula area with the highest number of sales and shortest days on the market was the relatively affordable area of New Monterey. The median price in the quarter was $930,000, with homes selling on average, in 23 days at 100% of the asking price. In 1Q20, the median price in New Monterey was $670,000 with days on the market at 40 with homes selling at 97% of the asking price. The median price gain in Q1 Year-over-Year was 39%.

Carmel Valley’s Los Tulares/ Sleepy Hollow area, gaining in popularity, had a median price of $1,292,500 in 1Q21, representing a 21% gain over the median price in 1Q20. Homes sold  on average in 43 days for 97% of the asking price.

Far less affordable but rounding out the highest selling area on the Peninsula in 1Q21 was Central Pebble Beach, with a median price of $4,750,000. Homes there were on the market for an average of 72 days and sold for 95% of the asking price. There were 14 sales in 1Q2, compared to 2 sales in 1Q20. Months of inventory in Central Pebble Beach began the year at 17 months and by March was left with 1.9 months of inventory.

Carmel Valley: 1Q21 versus 1Q20

In Carmel Valley, the median Single Family home cost $1,500,000 in March 2021 and sold in 65 days for 96.5% of the list price.

• The median price in 1Q21was $1,349,000, a gain of 5.4% over Q1 2020 which had a median price of $1,280,000.
• The Sale to List Price Ratio in 1Q21 was 97% versus 95.6% in 1Q20.
• The Number of Sales increased 41% in 1Q21 over 1Q20.
• Inventory decreased 22% in 1Q21 versus 1Q20.
• Days on the Market decreased to 55 days in the quarter, down from 133 in 1Q20, a decrease of 59%.

The quarter ended with March having the lowest level of inventory on record, with 27 listings for sale and 12 pending. The prior 12 months averaged 43 homes a month available for sale.

• March had the highest ratio of sales to inventory with 44% of listed properties selling in the month.
• New listings were down 33% in March compared to the average number of monthly new listings for the prior 12-months.

Carmel-by-the-Sea: 1Q21 versus 1Q20

• The median price in 1Q21 was $2,505,051, a gain of 11% over the median price in 1Q20.
• The Sale to List Price Ratio in 1Q21 was 102% versus 95% in 1Q20.
• Number of Sales increased 29% over 1Q20
• Inventory declined 30% from 1Q20
• Days on the market was 16 compared to 88 days in 1Q20

The quarter ended with the lowest level of inventory on record, with 12 active listings. The prior 12 months averaged 23 homes a month available for sale.

Carmel: 1Q21 versus 1Q20

• The median price in 1Q21 was $1,868,125, a gain of 13% over the median price in 1Q20.
• The Sale to List Price Ratio in 1Q21 was 98% versus 95% in 1Q20.
• Number of Sales increased 20% over 1Q20
• Inventory declined 49% from 1Q20
• Days on the market was 60 compared to 125 days in 1Q20

The quarter ended with the second lowest level of inventory on record since January 2021, with 49 active listings. The prior 12 months averaged 88 homes a month available for sale.

Pebble Beach: 1Q21 versus 1Q20

• The median price in 1Q21 was $2,769,000, compared with a median price of $1,600,000 in 1Q20. This price change was due to a significant increase in buyer demand in Central Pebble Beach and the Lodge area than in 1Q20.
• The Sales to List Price Ratio in 1Q21 was 97.5% versus 93.5% in 1Q20.
• Number of Sales increased 180% over 1Q20
• Inventory declined 46% from 1Q20
• Days on the market was 42 compared to 85 days in 1Q20

Monterey: 1Q21 versus 1Q20

The quarter ended with the lowest level of inventory on record, with 23 active listings and one month of inventory. Multiple and non-contingent offers led to a sale to list price ratio of 101.1% in March.

• The median price in 1Q21 was $977,500, compared with a median price of $877,000 in 1Q20, an increase of 11.46%.
• The Sales to List Price Ratio in 1Q21 was 100% versus 97% in 1Q20
• Number of Sales increased 27% over 1Q20
• Inventory declined 42% from 1Q20
• Days on the market was 33 compared to 73 days in 1Q20

Seaside: 1Q21 versus 1Q20

The mid-Broadway area of Seaside had the highest sales volume two years running, with a Q1-over-Q1 gain of 14%.

• The median price in 1Q21 was $672,500, compared with a median price of $622,500 in 1Q20, an increase of 8%.
• The Sale to List Price Ratio in 1Q21 was 102% versus 99% in 1Q20.
• Number of Sales decreased -9% from number of sales in 1Q20
• Inventory declined 42% from 1Q20
• Days on the market was 28 compared to 35 days in 1Q20

Marina: 1Q21 versus 1Q20

Marina’s highest sales volume area in 1Q21 was Marina Heights/The Dunes & East Garrison where the median price in 1Q21 was $807,500, compared with $717,000 in 1Q20, a gain of 12.6%.

For all of Marina’s highly competitive neighborhoods, buyers should take note of the following metrics:

• The median price in 1Q21 was $737,944, compared with a median price of $635,000 in 1Q20, an increase of 14%.
• The Sale to List Price Ratio in 1Q21 was 102% versus 99% in 1Q20
• Number of Sales increased 143% from number of sales in 1Q20
• Inventory declined 74% from 1Q20
• Days on the market was 12 compared to 41 days in 1Q20

Salinas: 1Q21 versus 1Q20

Perennial outperformer Salinas continued outpacing most other ‘affordable’ areas in median price growth.  The bucolic rolling hills areas of Prunedale, Elkhorn/Moss Landing took the top spot in number of sales for 1Q21, supplanting Los Palmas that had held the highest volume area in 1Q20.

Salinas Totals:

• The median price in 1Q21 was $663,500, compared with a median price of $557,000 in 1Q20, an increase of 19%.
• The Sale to List Price Ratio in 1Q21 was 102% versus 99% in 1Q20
• Number of Sales increased 5% from number of sales in 1Q20
• Inventory declined 49% from 1Q20
• Days on the market was 18 compared to 41 days in 1Q20

Alameda, Contra Costa, Santa Clara and San Mateo Counties Combined

Extremely low inventory levels (purple-line) coupled with increased seasonal demand remained the drivers of continuing price gains in a highly competitive sellers’ market. Constraints on supply now include would-be sellers experiencing difficulty finding suitable replacement properties in an environment of rising interest rates and higher inflation expectations. The average 30-year fixed-rate mortgage is up approximately 70 basis points from December lows, with ‘no-cash out’ refinances seeing large volume declines.

The chart below is a big data capture that exemplifies the Bay Area supply demand imbalance.

Pinch-out to enlarge chart. Coming out of a slow recovery after the Great Recession ended in June 2009, by March 2011 the median four counties’ single-family home price was $449,000. Inventory stood at 13,972, number of sales at 3511 and homes on average took 58 days to sell. In March 2021, the median home price was $1,296,888, inventory ended March at 2435 with 3422 homes sold in an average of 15 days. The March to April (MoM) median price gain was 6.30% versus the 5YR average of 8.5%. The combined four counties 1Q21 level of inventory is 26% below 1Q20 levels .

Four Counties Combined 1Q21 Median $1,220,000 versus $1,000,000 in 1Q20.

Median Price % Increase from 1Q20 YOY.

• Contra Costa: $820,000, up 28% from $640,000 in 1Q2
• Alameda: $1,100,000, up 21% from $911,000 in 1Q20
• Santa Clara: $1,490,000, up 12% from $1,330,000 in 1Q20
• San Mateo: $1,725,000, up 13% from $1,525,000 in 1Q20

Average Inventory Q1 Year-over-Year

• Contra Costa: -49%
• Alameda: -30%
• Santa Clara: -9.41%
• San Mateo: -3% 

Q1 Year-over-Year # of Sales

• Contra Costa: +22%
• Alameda: +36%
• Santa Clara: +41%
• San Mateo:  +25% 

Days on the Market

• Contra Costa: 18 days, down from 32 in 1Q20
• Alameda: 16 days, down from 27 in 1Q20
• Santa Clara: 18 days, down from 32 days in 1Q20
• San Mateo: 25 days, down from 30 days in 1Q20 

Sales to List Price Ratio

• Contra Costa: 106% versus 102% 1Q20
• Alameda: 111% versus 105% in 1Q20
• Santa Clara:  106% versus 101.5% in 1Q20
• San Mateo: 105.4 versus 105.1% in 1Q20

New Listings

• Contra Costa: + 9% over 1Q20
• Alameda: + 20% over 1Q20
• Santa Clara: + 32% over 1Q20
• San Mateo up 21%

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Combined Counties: Alameda, Contra Costa, Santa Clara, and San Mateo 

Last month’s median sales price data for the combined counties of Alameda, Contra Costa, Santa Clara, and San Mateo (scroll down for chart) started out strong but weakened into the latter half of the month, disrupting the outperformance record experienced January over December. February’s forecast began with a confidently projected 6.5% month-over-month gain, based, in part, on the February over January 5-YR average. The final print was a 6% increase. Looking at mid-March numbers, the median price is up 5.35% sequentially, well below the March-over-February 5-YR average of 8.5%. Unless we see a latter March acceleration in closing prices (at $1.32M), our runaway home price gains of 4Q2020 may be softening a bit. Of course, price spikes do remain, with low inventory and competition creating pockets of outperformance in select areas, but much of the spikey data is due to small sales numbers and outliers, making it merely interesting, as opposed to informative or predictive.

Monterey Peninsula 

Moving on to the Monterey Peninsula data and combining 5 ZIP Codes to gather higher volume, below are the February to mid-March metrics. Keep in mind that even when combining areas, the numbers are still quite low and subject to median price fluctuations caused by price-point buyer preferences that can skew the median in either direction. Despite this caveat, some of the metrics are still quite useful.

In the combined Peninsula ZIP Codes of Carmel-By-the-Sea, Carmel, Carmel Valley, Pebble Beach & Monterey, the median Single Family home cost $1,576,227 in February 2021 and sold in 53 days for 97% of the list price.

• The median home price in February decreased 1.5% over January 2021 and increased 17% over February 2020.
• Inventory decreased -13% from January and is down -43% from February 2020.
• Average days on the market (DOM) in February increased to 53 from 34 days in January.
• Homes selling below February’s median price sold in 32 days, while homes over the median price took an average of 51 days to sell.
• Homes selling between $1.8-2M spent the shortest time on the market with an average of 20 days to sell.
• Homes selling between $3-5M spent the longest time on the market with an average of 86 days to sell.
• New listings for the month of February decreased -10% from January, and -4% from February last year.
• The number of Contingent/Pending Sales increased 11% in February over January                                               

Carmel Valley

In Carmel Valley, the median Single Family home cost $1,550,000 in February 2021 and sold in 43 days for 97% of the list price.

• The median home price in February increased 31% over January 2021 and 19% over February 2020.
• Inventory decreased -19% from January and is down -21% from February 2020.
• Average days on the market (DOM) in February increased over January 63%.
• Homes selling for under $1.4M sold in 36 days, while homes over $1.4 M took an average of 60 days to sell
• New listings for the month of February decreased -14.28% from January and increased from 8 to 12 listings from February last year.

Carmel-by-the-Sea

In Carmel-by-the-Sea, the median Single Family home cost $1,841,000 in February 2021 and sold in 38 days for 98% of the list price. Inventory was down -32% from a year ago. New listings decreased -64% from a year ago February and decreased -55% (MoM) from January.

Carmel

In Carmel, the median Single Family home cost $1,857,320 in February 2021 and sold in 67 days for 93.5% of the list price on average

• The median home price in February increased 8.5% over January 2021 and 17% over February 2020.
• Sales to list price for homes selling between $1.8-2M was 100% of the list price in February.
• Homes selling for over $5M sold for 93% of the list price
• Inventory increased38% from January and is down -49% February year-over-year.
• New listings for the month of February increased 50% from January (27 versus 18), and 35% up from February last year.

Quick update first-half of February:

We are not seeing any abatement in homebuying enthusiasm and remain well above historic median price gains. The data suggest the month of February will realize the highest MoM percentage median price gain on record — going back 20 years. Expect a busy spring buying season as things stand. (Pinch outward to enlarge chart).

January 2021 Monterey Peninsula and Bay Area update

The year begins with an unprecedented jump in January-over-January sales and median prices.

• Sales are up 32.50%  January-over-January across combined five counties.
• County Median Sale Prices up January-over-January across all counties: 

1. Monterey County +33.28% / Monterey Peninsula +46.35%
2. Contra Costa +22.30%
3. Alameda +23.53%
4. Santa Clara +14.58%
5. San Mateo +10.71%

Month-over-Month:

• Median prices in combined counties up approximately +4.45% Month-over-Month (Dec-Jan).
• January sales volume is down double digits (approximately 30-40%) — final numbers are not complete as of 2/1/21).