FIRST QUARTER 2005 REPORT
First Published in The Carmel Pine Cone
April 2005
Contents
Market Barometer
Median Sales Prices
Gross Dollar Volume
Sales by Quarter
Distribution of Sales
Astonishing Local Real Estate Market Continues to Roll
First Quarter Report
By: Paul & Nellie Brocchini & Mark Ryan
Our local real estate market appears to be on steroids. Its strength grows and grows with no apparent limits to its power potential.
Dollar Volume
As in 2004, dollar volume and price appreciation are the main stories. The just concluded first quarter of 2005 chalked up the second highest dollar volume in history, $426,148,000. Carmel led the way with $127,479,000 of closed transactions during the quarter.
That figure was 88% over the first quarter of last year. Pebble Beach had an even more impressive gain. Dollar volume in the Forest was up 176% over the first quarter of last year, rising from $25,968,000 to $71,787,000.
Only the second quarter of last year topped the over-all figures. Dollar volume reached $526,393,000 during that quarter led by Carmel with sales of $160,602,000. That quarter followed a $266,572,000 first quarter. Looking ahead, one can't even imagine what the second quarter will be after this amazing start to the year.
Prices
The astonishing dollar volume is more a case of higher prices than increased number of sales. 330 transactions closed during the quarter, up 12% over last year. That 12% increase in units translated into a 60% increase in the number of dollars that changed hands.
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Carmel Real Estate & Monterey Peninsula Real Estate
All of the markets were up over the first quarter of last year, and all but one, Pacific Grove, exceeded the 2004 year median sales price. PG slipped a little bit, with a first quarter median sales price of $750,000 as opposed to $762,500 for all of last year. Monterey was up 47%, Carmel and Seaside 37%, Carmel Valley 28% and Pebble Beach 25%.
The
Distribution of Sales chart becomes more fascinating at each reporting period. Over the years we have watched as sales ranges have disappeared. First we lost the market under $200,000 then under $300,000. Now the market under $500,000 is disappearing. Of the 330 sales recorded during the first quarter in the 10 Monterey Peninsula markets, only six were under $500,000. All of those sales were in Seaside, and they were all over $400,000. At the other end of the range, million dollar plus numbers are becoming commonplace. It wasn't long ago that, even in Carmel, million dollar sales were not all that common. We remember the first sale over one million in Carmel of a house that did not have an ocean view. At the time, that was a ground-breaking event.Contrast then with now. During the first quarter 41% of the 330 transactions topped the one million dollar mark. 13% were transactions over two million dollars.
Short Term View
The best gauge we have of the near term is our Market Barometer which shows us the percentage of listings in escrow. Back in the days when we came up with this idea, we considered a barometer reading of 20% or higher to be an indicator of a good market. When we measured the barometer on April 1, nine of the ten markets had readings over 30%. Of those two exceeded 40% and one, Del Rey Oaks, hit 63%.On April 1, 219 properties were in escrow. Most of those will close during the second quarter. In addition, many more deals will be done during the quarter. Prospects for the second quarter are excellent. It will be interesting to see if the second quarter can surpass last year's record dollar volume.
Longer Term
Since we began writing these reports more than a decade ago, we have made it a policy not to hype the numbers. Like Sergeant Friday, we are only interested in "the facts, ma'am, just the facts." During the last few years it has been hard not to look like cheer leaders. We have been rolling out lots of superlatives, but they have been a product of the facts, not an attempt to make more out of the numbers than they deserve. In short, it has been and continues to be an historic period in local real estate.
Skeptics keep looking for the real estate bubble. Certainly, the level of recent gains is not sustainable, but a sell off at greatly reduced prices is highly unlikely on the Monterey Peninsula. We do not have an abundance of properties, especially at the luxury end of the market, and as we have stated ad nauseam in these columns, the baby boomers are coming our way with lots of cash in their pockets.
All of the exceptionally desirable places in the country like Aspen or Santa Fe or Sidona are benefiting from this phenomenon. Scarcity and strong buying power will keep our retirement and second home market strong.
At the lower end, which is not very low anymore, low interest rates have fueled the price gains. This has been true all over the country. When rates increase substantially, as they probably will, price gains and activity should cool. What the mix will be here is anyone's guess.
The charts are based in whole or in part on data supplied by the Monterey County Association of Realtors' Multiple Listing Service (MLS). Neither the Association nor the MLS guarantees or is responsible for their accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market.
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We have lived on the Monterey Peninsula since 1978 and in the heart of Carmel since 1986. We know the market and have deep experience assisting both buyers and sellers.
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