Pebble Beach/Carmel 2014 Market Update

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With the year coming to a close we’ve pulled together our annual recap on the Pebble Beach and prime Carmel markets; clearly a very strong year in both markets – as always, there are a few interesting patterns and nuances worth noting:

Pebble Beach:
– Total number of property sales(140) was the highest since our all-time high in 2000 (152).
– Nearly 70% of all sales were under $2M.
– We are down to 4 properties for sale under $1M, with 12 having sold in the 4th quarter and 4 more pending; the entry ticket to Pebble will be $1M very soon.
– 8 properties closed over $8M this year, the highest in a decade – one of the biggest stories this year was the return of the top of the market.
– Soft spot in Pebble is the $5-$10M bracket. Demand sluggish and inventory stagnant—resulting in the highest discount from ask to sell.

Prime Parts of Carmel:
– Total number of property sales (74) was the second highest in a decade, improving on last year’s healthy tally by 7 sales.
– Total number of sales on Carmel Point was also the second highest in a decade; total number in the Golden Rectangle the third highest in a decade.
– The Golden Rectangle lit up in the 4th quarter with 12 closed and 4 pending sales; given the incredibly tight inventory that speaks volumes.
– Carmel Point slowed in the 4th quarter, more due to low inventory than reduced demand.
– One big story in Carmel was Scenic Road with 4 sales; the Scenic market was on fire this year as the apex of the Carmel market found traction with upper-demographic; inventory is very tight with 2 now openly listed for sale.

Our Forecast for 2015:
– Mild tapering in the number of properties sold in both markets, due more to shrinking inventory than reduced demand, which we see as remaining steady throughout the year.
– Pocket of softness will persist in Pebble in the $5-10M range. We’ve seen this before, where the market is hot at the entry and at the top but spongy in between; sellers in this bracket need to be sensitive to demand when it surfaces.
– The top of the Pebble market (the PB Golf and Ocean Front) will likely see some reduction in sales simply due to lower inventory; there are only so many of them (28 ocean front and 45 PB golf front) and a fair number turned over this year.
– Scenic will stay hot. We think there is a larger demographic shift in motion toward smaller homes and properties and Scenic captures the essence of what the top demographic is seeking along these lines – should be a good year for sellers on Scenic.

Wishing you all the best in 2015; as always, don’t hesitate to let us know if you have any specific market questions.

Yours very truly,
Mike, Jess & Nic

4Q14 Market Update