With 2013 coming to a close we’ve prepared our annual Market Update for the Pebble Beach and prime Carmel markets; interesting year last year – strong and steady – as always, there were a few nuances worth noting:
- While the market slowed in the 4th quarter, the year-end sales tally ended within 5% of last year’s, which was the highest level since 2000. It’s worth noting that the bulk of the activity in Pebble (67%) was driven by the bottom of the market (under $1.5M), an uptick over last year when this bracket accounted for 58% of the market.
- The $2-2.5M bracket is very tight, with only 3 active listings, the shortest days-on-market (114), 2 pending sales and the lowest discount of sale-to-ask (3.9%). Sellers here should find fertile ground in 2014.
- The next bracket up is, however, materially slower with zero $2.5-3.0M closed sales last quarter, no pending sales and 9 on the market – nearly a 2 year supply based upon historical sale averages; interesting quirk in the marketplace. While it takes a long time to sell in the $4-6M bracket (averaging 15 months), this sector saw an improving picture with 2 closed sales last quarter, 2 pending sales and only 4 homes on the market.
- The top of the market is always hard to predict. Nothing sold last quarter over $8M but we did see 4 properties in this bracket sell in 2013, including the two highest we handled (at $23.5M and $28M). With 10 properties on the market sellers can continue to expect fairly long marketing periods of 12–24 months.
- Overall sales in the Golden Rectangle and Carmel Point essentially matched last year’s total, a very healthy showing by historical standards; interestingly, sales in the Rectangle actually fell relative to 2012 while sales on The Point had a record year. We remain convinced there’s a demographic shift emerging with an increasing preference for The Point – many starting their ownership in Carmel with something in the Rectangle but, over time, shifting toward larger homes/lots on The Point, with its quieter setting.
- A story line throughout the year was the evaporating inventory levels, particularly at the bottom of the market: there are no active listings below $1.5M in all of Carmel and only 1 listing under $2.5M on The Point. There was a huge jump in sales in the $3-4M bracket with 12 sales this year (over double the 5 in 2012) and a robust showing of sales over $4M (10 in 2013 vs. 6 in 2011 and 2012). The Point saw 3 closed sales and one pending sale between $3-4M, approaching an annual average in one quarter. With 9 properties in this bracket in The Point and the Golden Rectangle this sector is reasonably balanced but a tad tight – should bode well for sellers next year.
An emerging trend in the region is the expansion of discreetly exposed, off-market listings. There were 21 known off market sales this year, accounting for 11% of all deals but 24% of deals that sold above $4M. It’s clear a number of sellers prefer a more subtle, controlled sales message – perhaps wanting to avoid the bedlam associated with the shotgun distribution of all the MLS aggregators. We’ve heard this demand and are continuing to try to build the best platform for buyers and sellers to interact on this preferred stage.
For 2014, our crystal ball is forecasting: a healthy, steady market, with some leveling-off. Prices will begin to stabilize. Distressed properties have largely been consumed – inventory levels will be tight at the entry levels but rising interest rates should throttle activity – total dollar volume at the bottom will fall substantially given the huge reduction in inventory and slowing demand.
We do expect to see a few trophy sales in Pebble in 2014 – there are a couple of interesting properties out there and we know another couple that will be coming to market. The prime parts of Carmel don’t really have any trophies available at this time and we’re not hearing that any are coming to market in the near future. With Scenic having its best year on record, it will be interesting to see if that trend continues into 2014.
Hope the holidays are treating all well and that the new year is a good one.
Mike, Lynn and Jessica