Quarterly Updates

4Q2025

The markets across Carmel, Pebble Beach, Carmel Highlands, Preserve, Quail Lodge and Meadows, Tehama and Monterra continued to build momentum this year with 314 sales for a total of $1.13B, which is a nice uptick in deal flow from last year (294), but off a touch from the $1.15B total investment in 2024. The top of the market continues to hold strong, but we’ve seen particular strength in the $1.5-2M and $2.5-3M brackets this year, which is what drove the increased deal flow over last year. Pebble Beach had a particularly strong quarter with 31 deals that closed for $102M, which is about on par for what we expect to see in Pebble in the fourth quarter. Carmel slowed to 29 deals, which is also fairly standard for this area as seasonal buyers tend to focus on ski vacation homes, rather than beach houses. The Highlands had a nice uptick in sales this quarter with 9 escrows, up from the 3 last quarter. The Preserve had 5 sales this quarter, which is a strong quarter for that region. Quail and Tehama didn’t have any sales this quarter, which is a bit of an anomaly for the Mid-Valley area, although Monterra sold a brand-new house for a very strong $6.25M. 

Prices have softened overall with buyers getting more room off the list price, with an average 6% discount rate this quarter, double what it was in 3Q25 as sellers finally softened their stance on the list price. While median sales prices appear to be falling, coming in at $2.95M this quarter, down from $3.97M last quarter, this is mostly because more deals are closing at the bottom of the market. As is typical for this market, the top of the market would rather hold than sell in a market dip, which is something we saw this quarter, with 23 listings above $4M come off the market in the 4th quarter. We anticipate most of these to still be available and likely to come back to the market in the spring.

From a larger market perspective, San Francisco and Manhattan had some of their strongest years and quarters as we’re seeing more buyers come back to the city after leaving during the COVID years. Our market tends to trail behind the Bay Area and SF by about 6-9 months, so we’re anticipating a particularly strong spring and summer this year. While there are a lot of headlines that warrant attention these days, the stability of a small, sophisticated town will continue to be a large draw, and we anticipate that to continue through this year. 

3Q2025

Pebble Beach and Carmel continued to weather the storm this quarter, in the face of macroeconomic uncertainty. We saw many buyers who have been circling for a while get off the sidelines this quarter as both Pebble Beach and Carmel had stronger quarters over 3Q2024. Overall, there were 77 deals that closed this quarter in Pebble Beach, Carmel, the Carmel Highlands, Preserve, Quail Lodge/Meadows, Tehama and Monterra, for a total of $291M, which is level with deal flow in 3Q2024, but down from the $326M invested. The difference in dollars invested this quarter was primarily due to a pullback of deals in the Valley, which tends to feel shifts in the economy faster than Pebble or downtown Carmel. However, we currently have two deals in escrow in the Preserve and have seen an uptick in interest in Tehama and Monterra, so we anticipate this trend shifting through the end of the year.

Carmel had 45 deals close for $141M this quarter, outpacing Pebble Beach a little bit, which is fairly standard for this time of year. However, Pebble Beach had a strong quarter with 25 deals closing for $122M, as the top of the market started to wake up this quarter. The $122M is a 22% increase over Pebble sales last quarter and 11% higher than this time last year. Pebble Beach has been struggling with inventory levels for a few years now, so it’s encouraging to see more options for buyers to see to get a sense for values and the market - a process that’s much more difficult when inventories are tight. Demand appears to be growing in Pebble, as the average days on market this quarter dropped 20% from last quarter, to 38 days. This is, of course, price dependent, but an encouraging sign for the next few months. The Carmel Highlands have slowed down from last year, with just 3 sales closing for $9.7M and taking an average of 213 days to sell. This market is more price and market sensitive than other areas, so it’s not atypical for that region to have an off quarter. The Preserve had two sales for $10.5M this quarter, over double that of last quarter but about a third of what we saw this time last year. Quail had 2 sales for a total of $7.75M, including our sale in Quail Meadows that sold quickly for $5.75M. Tehama and Monterra were quiet this quarter with no sales, but we’ve seen a strong spike in showings and new buyers coming to the area to preview lots and available inventory, so we also anticipate an uptick in sales in both regions in the near future.

Demand is continuing to climb the price spectrum in this area, with the $4-6M price bracket surging to 15 sales, up from the 9 that closed at this time last year. Additionally, we’ve seen the bottom of the market drop with just 8 sales below $1.5M, down from the 13 sales we saw in 3Q2024. This has resulted in a lift of median sales prices from $3.19M in 3Q2024 to $3.97M this quarter. Part of this shift is also due to fewer sellers stretching their list prices and targeting closer to perceived market value, as the list price discount (sales price off original list price) has dropped to 3% off list. This area has always negotiated off list price, unlike in other areas, but if the house is priced well, we are still seeing deals get multiple offers and closing above list. One thing we’re watching very carefully is how many deals fall out of escrow - there were 11 this quarter alone. This is a trend we’ve been tracking all year as the dynamics between buyer and seller shift. 

Overall, we’re seeing a steady deal flow in this area and will likely come close to matching total invested in 2024 ($1.15B) but will be a far cry from the $1.8B we saw in 2021.

2Q2025

The market is steadily building momentum out of the doldrums that we saw in 2023, with 170 deals closing across Carmel, Pebble Beach, Pacific Grove, Monterey, Preserve, Tehama, Monterra, Carmel Valley Ranch and the Carmel Highlands this quarter, raising $443M overall. Despite macroeconomic uncertainty, we saw a strong rebound over last quarter, as overall dealfow is up 19% from 1Q25. While the rebound hasn’t been even across the entire region, we have seen buyers across all regions take a renewed look and anticipate growth continue to increase throughout the summer.

Historically, demand has been strongest in downtown Carmel and radiates outward, which has certainly been true this quarter as Carmel led the pack this quarter with $143M closed in 39 deals, up 72% and 44% over last quarter, respectively. Pebble Beach is also starting to gain steam with 29 deals closing this quarter for almost $100M, up 16% and 39% over last quarter, respectively. As demand continues to climb up the price point, Pebble and the Preserve are poised to show the largest increase over the next 12 months as they both have healthy levels of inventory and high quality product. Pacific Grove has continued to hold steady in the face of higher interest rates with 40 deals closing for $63M. Monterey also climbed this quarter with 42 deals closing for $52M, which was a strong rebound from last quarter. The Carmel Highlands jumped this quarter from 6 to 9 deals for $44M as the market continues to pay for ocean views. We represented another seller in Tehama, which was the top sale so far at $9.8M to bring total sales to $13.2M this quarter. Quail had 4 sales close for $9.3M as inventory continues to get snapped up quickly in that market. Carmel Valley Ranch slowed a bit to $5.8M, which isn’t atypical as that area is prone to seasonal swings but overall looks healthy. The Preserve has slowed considerably this quarter to $4.8M but we’re seeing strong demand from new buyers entering the space, so we anticipate this changing over the next 6 months.

In the face of uncertainty, the top of the market tends to hold on big investments initially, but the historic stability of this area has turned into it’s own asset class with people shifting money from the stock market and into real estate in this area. As such, we have seen prices continue to climb with the median sales price going from $1.78M last quarter to $2.77M this quarter. While sellers are still needing to work with buyers on terms, this price appreciation is driven more by stronger demand at the top of the market - a trend we anticipate continuing throughout the year.

This is a very nuanced market that balances patience from a seller and a deliberate approach to buying in this area, as the likelihood of more competition on the buy side increases every day.

1Q2025

The local real estate market has held steady in the face of increasing macroeconomic headwinds, ranging from fires in LA, tariff talks, recession talks, insurance issues and a falling stock market. All of these topics have come up in the showing process, however, the desirability and small town feel continues to draw buyers to this market, some of them moving back to town after leaving during COVID. This quarter, we saw 143 deals close across the Monterey Peninsula for a combined $310M, which is a 34% and 13% increase over 1Q24, respectively. Good news for buyers, we’re starting to see more inventory come to the market as we head into our prime selling season. Sellers need to be thoughtful about how they approach pricing and handle offers as buyers continue to be very price sensitive and the increasing inventory might start to put pressure on prices.

The top of the market slowed this quarter, so the total invested in Carmel and Pebble Beach both dropped. The 27 deals that closed in Carmel this quarter came in at $83M, which is down 31% from 4Q24, when we also saw 27 deals close but for a total of $117M. Pebble had a similar trend, but is even more dependent on the top of the market - there were 24 deals that closed this quarter for $70M, down 36% from last quarter but over triple that of 1Q24 ($22M). Pacific Grove and Monterey both had very strong quarters with over 20% jumps in total dollars invested over last quarter. The Carmel Highlands had a particularly strong quarter as demand continues to heavily favor ocean views right now; the last two quarters have seen over $80M sold in the Highlands. Quail Lodge continues to post strong numbers with $18M invested into 8 deals, over double what we saw in 1Q24 for both deals and dollars invested. Carmel Valley Ranch surged back to life after a slow 2024 with $13M closing in 6 deals, up over last quarter and 1Q24, and further supports the strong demand we’re seeing at the entry point on the Peninsula. The Preserve slowed this quarter with just $2.15M sold from 2 lot sales and no home sales. Tehama and Monterra also didn’t have any home sales this quarter, as the top of the market in the valley slowed a bit. We do have 15 Alta Madera in Tehama in escrow currently, set to close next week…sensing we may be seeing more traction build in the valley.

We did see median sales prices dip this quarter, to $1.78M, down from $1.81M last quarter and a good drop from $2.6M in the first quarter of 2024. While we are seeing sellers come off their prices a bit, this statistical shift is more driven by higher activity at the bottom of the market than a significant drop in overall prices. But we’ll see if the stock market drop will have a sustained impact on buyer demand and liquidity to purchase second homes as we roll into summer.

4Q2024

The market notched a slight increase in 2024 with 583 deals closing, up about 1.5% from last year when we saw 574 deals close in Carmel, Pebble Beach, Carmel Highlands,Carmel Valley, Pacific Grove and Monterey. As buyers have undoubtedly felt, the tight inventory is keeping prices high, which has resulted in a strong total $ invested in this area this year: $1.56B in 2024, a 8% jump from the $1.44B in 2023. This is particularly noteworthy as it highlights a significant market shift in this area when you compare it to before COVID. In 2018 there were 837 deals that closed for $1.624B, which is a 27% drop in activity but the same overall investment. Most economists predict an increase in inventory in 2025 of about 11%, which at first blush will feel like a great relief to buyers, but if that does translate to our area, that would only result in about 3 new listings in the Rectangle and about 6 in all of Pebble Beach. As such, we’re predicting more of the same in this area next year, where the sales process will likely take a bit longer (than sellers hope) but prices should continue to hold steady and even climb a bit as we work our way into 2025.

Deal-flow slowed considerably this quarter, with just 139 closed escrows, down from 157 last quarter. Monterey closed the most deals this quarter, with 30 escrows closing for $33.16M. Pebble Beach had a decent quarter with 34 deals closing for just over $108.6M, which is down from last quarter but almost double over 4Q23. Pacific Grove slowed to 29 deals closing for $47M, mostly due to rising interest rates. Downtown Carmel had just 24 deals close this quarter for $108.21M, capped by an $18M deal that closed on Scenic as demand continues to be strong for the top of the market. The Carmel Highlands were a bright spot this quarter with 12 deals closing for almost $48M, more than double what we saw in the third quarter as demand remains particularly strong for ocean view properties. Quail Lodge continued its strong momentum with 5 deals closing for $19.6M. Carmel Valley Ranch had 2 sales and the Preserve had 3 deals close this quarter, totaling $3.4M and $19.43M respectively.

While prices are staying relatively high overall, sellers are having to negotiate more than in previous years. The average discount off list price was 3% this quarter, with Carmel having to come over 6% off list. Median sales prices held steady $1.8M this quarter,compared to $1.81M last quarter. This is still good news for sellers as it’s over double what we saw a decade ago. Given the tight inventory levels, we anticipate pricing holding steady and climbing a bit next year as more buyers return to the market.

3Q2024

The real estate market across the Monterey Peninsula began to shift this quarter as sales held a slow and steady pace with buyers finally able to see more inventory in their search, just in time as interest rates began to drop. There were 156 sales this quarter across Pebble Beach (23), Carmel (38), Pacific Grove (45), Monterey (31), Carmel Highlands (5), the Preserve (5), Quail Lodge/Meadows (1), Tehama (2), Monterra (3) and Carmel Valley Ranch (3). We’re pretty much on track to match last year, which had 577 deals, but that is historically low for this area as we usually see just over 800 deals per year. Much of this is due to the fact that so many people moved here over 2020-2021 that it has taken a while for the market to bring back new inventory.

We’ve seen buyers get fussier this year and start pushing back on pricing, which has brought down median sales prices a notch to $1.81M (compared to $1.85M last year). This is the first dip in prices we’ve seen since 2008. While not a significant drop, it is good to see that the market is overall holding the price appreciation we saw come with the market surge of 2021-2022. The two price brackets that had the biggest bump in activity this quarter were the $3-4M range (23 sales this quarter, up from just 8 in 1Q) and the top of the market which had 8 sales north of $8M. The bottom of the market (below $1M) slowed this quarter from the 29 sold last quarter, to 19, which is more on-pace for this area in that price bracket.

With the increased inventory, we’re starting to see sellers come off their original list prices to accommodate buyers that bring an offer. Days on market stretched back up to 54 days this quarter and sellers pulled 3% off the list price to get the deal done. We do anticipate more buyers to come off the sidelines as rates fall and inventory levels rise, so it will be increasingly important to make thoughtful negotiations on both sides over the next few quarters.

The biggest news in real estate is the de-coupling of buyer agent commissions from the listing process. Starting on August 17th, all buyers must now sign an agreement with an agent, akin to a listing agreement, in order to see a house. These agreements can either be property specific or for a specified period of time, and do include the agreed upon agent compensation. Sellers should be ready to receive a request for payment of compensation to the buyer’s broker with an offer, either through a seller concession or price reduction. So far, the market has been open to receiving these requests and Sellers are paying for them as part of fair offers.