The middle market surged this quarter with 22 sales between $3-4M, over double what we saw in the second quarter of last year. The top of the market also showed building momentum with two more sales north of $20M this quarter, including a top sale on the 18th hole of Pebble Beach at $31M. This brings the $20M+ sales to 4, so far this year. Demand across the price spectrum appears to be increasing into the summer with Days on Market decreasing to 64 as inventory, both old and new, get snapped up by buyers done waiting for inventory to come back to pre-pandemic levels.
Whereas last quarter showed particular strength at the top of the market, the surge in demand in the mid-market actually lowered median sales prices to $3.4M. This is not a sign of lowering prices, rather a sign of increased buyer activity up and down the price spectrum.
While some markets might be inflated due to AI investments finally becoming liquid, our total investment has come in at $635M this year, pretty much on par with last year, so we don’t anticipate a major shock coming our way. But buyers need to learn that the days when a good deal could be made have likely passed and they need to jump quickly when something fits their criteria.
1Q2026
There is an investment theory that states that the luxury market will be the first to recover from a housing downturn - we saw this as true coming out of COVID and are watching it play out right now across the peninsula as we saw a surge of demand at the top of the market this quarter. The first quarter is historically slow in this area and 2026 followed suit with just 58 deals for $268M, down slightly from last quarter when we saw $273M go into 75 deals. While overall deal flow is down considerably this quarter, the 7 sales north of $8M made up for the slower demand at the bottom of the market. We’re actually seeing the top of the market build momentum right now with 13 deals closing over $8M over the past two quarters; that’s up from just 5 in the same period last year. When you compare this quarter over the first quarter of last year, almost half of the deals were above $4M, compared to just 22% of deal flow in 1Q25.
Carmel held a steady pace this quarter with 26 deals closing for $118M, which is up a touch from last quarter but 42% higher investment than the $83M we saw close in 1Q25. Pebble Beach reclaimed the top spot for investments on the Peninsula with $126M closing into 21 deals, which is up an astonishing 75% over the first quarter of last year. As is frequently the case with Pebble, this is due to a few big deals that rolled through, including our listing on the 11th green of Pebble that closed for $24.5M. We’re also seeing buyers get more decisive right now as competition heats up across the board. Overall, days-on-market dropped to 79 days, from 85 last quarter. The increased demand is also causing a tightening of purchase prices, as the average discount off list price dropped to 4% this quarter, from 6% last quarter.
The increased demand is also causing a rise in prices as the median price in our area jumped to $3.75M, up from $2.95M last quarter and $3.05M in 1Q25. This is a clear correction from last year when the median sales price dipped to $2.8M and shows good momentum as we enter our key selling season this summer.
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.