3Q2022 Market Update

Mike Canning

Dave

Paige

The market etched up across the Peninsula this quarter, coming in at 143 closed escrows and $437M in the third quarter. The bottom of the market ($2M and below) continued to drive the local market forward, representing well over half the deal flow. However, sellers had to adjust prices to account for rising interest rates - we saw an average of 2% discount off list price which is not something we've seen in a while.

Pacific Grove has shown continued strength with 51 sales, which is down a bit from this quarter last year, but also a nice rebound from the 31 deals that closed in the first quarter. Carmel slowed a bit this quarter with 44 deals but was fortunately lifted by some new inventory that hit the market in the Golden Rectangle, which represented 14 of the 44 deals this quarter. Pebble Beach bounced back with 32 sales this quarter with demand being heaviest at the bottom of the market, which drove overall investment down to $112M. However, Pebble's numbers can fluctuate significantly if a few oceanfront and golf front sales roll through, so we don't see this as a real trend in demand - if anything it is driven by a lack of quality inventory at the top of the market.

The top sale of the quarter was in the Carmel Highlands, which came in at $40M and is proving that oceanfront in the Highlands can compete with oceanfront in Pebble Beach. We are starting to see demand taper in the Valley, with Quail and the Preserve dipping in activity (1 and 3 sales, respectively in 3Q22). Carmel Valley Ranch was the exception to this, with 5 units sold this quarter, up from the 3 last quarter. This is most likely because the Ranch still has listings below $2M, something that's unheard of in Quail and the Preserve.

Overall, we're seeing prices start to level off and stabilize, albeit at elevated levels compared to before 2020. The median sales price so far in 2022 is $2.22M, compared to $1.98M last year and $810K in 2012. This quarter's median sales price is down to $1.9M, showing the rate at which it's leveling off and pulling down the median for the year. Historically, we've seen prices appreciate at about 10% a year on the Peninsula but will likely see a lower appreciation rate next year as it will take a while to replenish the buyer pool with less competition between buyers for listings.

Market

143

Total Sales

Median Sales Price ($M)

3Q2022

Area YoY % Change

$2.60 Carmel 5%

$3.75 Carmel Highlands 46%

$2.50 Pebble Beach -15%

$3.00 Quail 90%

$5.90 Preserve -8%

$1.38 Pacific Grove 6%

$2.05 Carmel Valley Ranch 12%

$1.90 Overall 2%

Average Sales Price ($M)

3Q2022

Area YoY % Change

$3.42 Carmel 13%

$10.64 Carmel Highlands 263%

$3.90 Pebble Beach -15%

$3.00 Quail 22%

$5.90 Preserve -6%

$1.53 Pacific Grove 2%

$1.92 Carmel Valley Ranch 4%

$3.16 Overall 15%

3Q2022 Sales by Price Range

$8M+

$6M

$4M

$3M

$2.5M

$2M

$1.5M

$1M

Total Annual Sales

Pebble Beach Market

As the pandemic housing boom drew to an end in the 3rd quarter, the Pebble Beach marketplace began to recalibrate with overall activity and prices receding from the frothy peaks in 2021. In review, the 3rd quarter posted a total of 32 sales (-19% below 3Q averages) $112.6M invested (-2.3% QoQ) –signaling a softening in demand and a mild dip in sale prices.

On the selling side of that trend, there were 16 list price reductions throughout Q3 as Sellers adjusted their expectations on values. This came as a major shift in (listing) market positioning from the 1 price reduction that occurred in the first quarter of ’22.

Conversely, Buyers sought leverage from the rising inventory levels and lingering average days on market to push the average discount-off-of-list price from a record high of +2.24% in 2Q to negative territory in Q3 (-0.02%). Although Buyers are showing an increase in price sensitivity, negotiations remain quite competitive compared to Pebble Beach’s historical averages.

As inventory levels continued their steady climb from 28 to 34 actively listed by quarter’s end, the majority (42%) of available properties clustered in the $6M-$12M price brackets. Heading into 2023, accurate and competitive pricing will become increasingly important for Sellers in these price brackets. Some Sellers that don’t need to sell may simply choose to go to the sidelines in 2023 to wait out potential corrections in the market.

Some of the highlights from Q3 include the sale at 3200 Palmero Way in Central Pebble Beach that closed at $12M (8% off List Price); 1016 Rodeo Road that sold just over the list price at $9.008M (2nd highest in MPCC history and a Pacaso sale) and the iconic Mark Mills Mid-Century Modern home on 17 Mile Dr just below Spyglass Hill that sold for $9M (10% off List Price).

Although we’re seeing a lot of the trends from the past two years change course, one trend appears to be holding firm: the work-from-home lifestyle looks like it may be here to stay. Both existing and new buyers continue to express interest in home ownership on the Monterey Peninsula with varying degrees of the work-from-home lifestyle in mind. We’ll keep a close eye on how this influencing trend will play out in the local market heading into 2023.

Nic Canning Pebble Specialist

Featured Property

17 Mile Drive, Pebble Beach

32

Total

Get Smart

3Q2022

3200 Palmero Way

Rodeo Road

3137 17 Mile Drive

17 Mile Drive

Viscaino Road

Spanish Bay Circle

Ronda Road

Flavin Lane

Riata Road

3Q2022 Sales by Price Range

$8M+

$6M

$4M

$3M

$112.6M

32

2% decrease from 2Q22

decrease from 3Q21

33% increase from 2Q22

52

Average Days on Market

8% decrease from 2Q22

3Q2022 Top Pebble Beach Sales

62 Spanish Bay Circle

19% increase from 3Q21

increase

3Q21

Spanish Bay Circle $4,000,000

Cormorant Road $3,623,000

Riata Road

Navajo Road $2,643,950

3100 Flavin Lane $2,500,000

Strawberry Hill Road $2,275,000

Rancho Road $2,075,000

Crest Road $1,992,500

Quarterly Sales by Region

Central Pebble Beach

Average % off list price 3Q2022 Sales

MPCC

Upper Forest

Steady demand and tight inventory levels kept negotiationsthroughoutcompetitive

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $2.50 -15%

2Q2022 $3.14 -10%

1Q2022 $3.35 22%

4Q2021 $2.66 15%

3Q2021 $2.93 36%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $3.90 -15%

2Q2022 $5.13 12%

1Q2022 $7.65 89%

4Q2021 $4.01 9%

3Q2021 $4.58 26%

Carmel

Carmel continued to slow this quarter with just 44 closed escrows for a total of $154M. Despite all of the macroeconomic uncertainty and rising interest rates, Carmel has held steady, essentially even with this quarter last year and a 14% increase in total invested. Although we're down slightly from historic averages, this is mostly due to tight inventory levels, which is what's keeping prices so high, even with the lower dealflow.

The Golden Rectangle sprung back to life this quarter with 14 sales as new product finally came to the market - and got snapped up quickly. This was the hightest level of activity in a single quarter for the aptly named Golden Rectangle since the first crush of activity in 2020 when we saw 22 and 14 deals close in the third and fourth quarters consecutively. Northwest Carmel also held steady with 13 deals closing this quarter, about on par with historic averages for that area. The biggest surprise in Carmel was that we had just 1 sale in Southeast Carmel; this region usually has closer to 7-8 deals each quarter. Hatton Fields and Northwest Carmel both had 6 deals close, which is down a bit from their averages but still healthy. Carmel Point came in with 4 deals this quarter which is about on par with 3Q trends for that region.

The top of the market surged this quarter with 14 sales above $4M, up from the 7 last year and well above the historic average of 5 in this price bracket for 3Q. However, we are starting to see sellers come off their prices a bit and overall pricing level off. The median this quarter came in at $2.6M, which is down 5% from last quarter and down 17% from the high of $3.11M reached in 4Q21. We anticipate prices to hold steady for the next several months as the markets recalibrate and return to a healthier approach to real estate investments.

Jessica Canning Carmel Specialist

Total Sales

Get Smart

3Q2022 Snapshot

3Q2022 Sales by Price Range

$8M+ 2

$6M - $8M 3

$4M - $6M 9

$3M - $4M 8

$2.5M - $3M 3

$2M - $2.5M 6

$1.5M - $2M 8

$1M - $1.5M 5

<$1M 0

$154.4M

Total Dollar Volume

44

Units Sold in 3Q2022

26

Average Days on Market

4% decrease from 2Q22 14% increase from 3Q21

14% decrease from 2Q22

2% decrease from 3Q21

80% increase from 2Q22 23% increase from 3Q21

3Q2022 Top Carmel Sales

SE Corner of Camino Real & 13th $9,995,000

NEC Ocean & San Antonio $8,540,000

2696 Santa Lucia Avenue $6,700,000

NEC of San Antonio and 12th $6,600,144

San Antonio 3SE of 9th Avenue $6,350,000

25560 Shafter Way $5,665,000

2530 San Antonio Avenue $5,655,000

2NW of Camino Real & 10th $5,050,000

San Carlos St, 2 NW of 8th $4,311,000

Monte Verde 4 SW of 10th $4,150,000

24595 Camino Del Monte $3,975,000

Carmelo 4 SW of 7th $3,800,000

Torres 2 NE of 5th Avenue $3,650,000

26335 Rio Avenue $3,550,000

NWC Casanova & Fraser $3,500,000

9 SW Crespi of Mt View Avenue $3,350,000

Casanova 2 SW of 8th $3,300,000

Monte Verde 6 SW of 13th $3,000,000

# of Sales

Quarterly Sales by Region

Carmel Point Golden Rectangle

Hatton Fields

Northeast Carmel Northwest Carmel Southeast Carmel

Average % off list price 3Q2022 Sales

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $2.60 5%

2Q2022 $2.90 16%

1Q2022 $2.76 38%

4Q2021 $3.11 42%

3Q2021 $2.47 18%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $3.42 13%

2Q2022 $3.14 8%

1Q2022 $3.47 32%

4Q2021 $3.61 27%

3Q2021 $3.03 21%

Buyers are finally starting to negotiate off list price, which is typical for this area.

Carmel Highlands Market Overview

The biggest event of last quarter in the Carmel Meadows & Carmel Highlands markets—which was broadcast by every major news outlet throughout the world—was the secretive off-market purchase of the D L James House by actor Brad Pitt for a reported (and record-setting) $40M. This sale has brought the Carmel Highlands both to the forefront again of luxury real estate buyers who had known of the area previously and put it on the map for the larger international community who were unfamiliar with it. But, as profound of a purchase as the James House was, it was not the only notable sale last quarter in the Highlands.

The oft referred to “Play Misty for Me” house, at 162 Spindrift Road—where Clint Eastwood’s directorial debut was filmed— sold for $12.74M ($740K over ask) after just 4 days on the market.

The property known as Belvedere (Italian for “beautiful view”) sold this quarter for $8M. This is the 1920s home of famous central coast painter John O’Shea, which was updated in 2001 by architect Eric Miller for Brian Swette, the ex-CEO of eBay. This property was on the market for several years but finally sold. However, the buyers split the lot and put the portion along Highway 1, with the house, to the market for $6.295M. Will be interesting to see how the market responds to the smaller lot size.

These 3 significant sales anchored a surprisingly strong quarter in the Carmel Highlands—even in a softening market—and proved once again that properties in this area are still some of the most sought-after estates in the world of high-end, luxury real estate.

Check out the accompanying graphs for the whole picture of last quarter and come check out our new listing of the classic, 1927 Spanish-style home at 161 Spindrift Road!

Dave Reese Highlands Specialist

$8M+

$74.5M

- $6M

- $4M

- $3M

- $2.5M

- $2M

- $1.5M

Smart

increase from 2Q22

increase from 3Q21

Top Carmel

1/176

decrease from 2Q22

decrease from 3Q21

decrease from 2Q22

Sales

decrease

3Q21

Walden

Quarterly

Average % off list price

3Q2022 Sales

Sellers are pricing their homes just right!

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $3.75 46%

2Q2022 $5.20 -29%

1Q2022 $4.00 30%

4Q2021 $3.15 11%

3Q2021 $2.58 36%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $10.64 263%

2Q2022 $5.50 -26%

1Q2022 $6.42 66%

4Q2021 $4.01 14%

3Q2021 $2.93 -5%

Quail Lodge/Meadows

Deal flow in the Quail Lodge and Quail Meadows areas continued to slow down with just one sale in the 3rd quarter. The lone sale occurred at 8018 River Place, which was a tastefully renovated Mediterranean-style home adjacent to the driving range that closed at $3M (1% over List Price). Incredibly, this sale marks the third straight quarter that Quail Lodge’s median sales price has hovered at-or-above $3M – a feat never before seen in the Quail Lodge marketplace.

Razor-thin inventory levels remain the main culprit for the slowdown in these areas as strong demand from the Bay Area thinned supplies to just one active listing in each sub-market. We’re honored to represent the Sellers of the Quail Meadows listing, which is located at 5462 Quail Way and is being offered at $6.15M. This recently renovated, traditional-style home sits on 3 sunny acres and is complete with vaulted ceilings, open entertaining areas, grand primary suite and a pool. Quail Lodge also has one listing currently in escrow: 8072 Lake Place along the 14th fairway at Quail Lodge that was also recently renovated (in ’21) with modern-influenced finishes and beautiful east-facing valley views overlooking the golf course. The current list price for this home is $3.995M.

As the overall market begins to soften heading into 2023, we’ll be keeping a close eye on the Quail marketplace to see if these values continue to hold firm at the pandemic driven highs or if they’ll return to the historical norms of the low-to-mid $2M’s in past cycles. If recent new club memberships (40+) at Quail Lodge are any indicators, steady demand for this incredible golf community should continue to hold prices relatively firm and keep inventory levels near their record lows.

Jessica Canning Carmel Specialist

$8M+

$6M - $8M

$4M - $6M

$3M - $4M

$2.5M - $3M

$2M - $2.5M

$1.5M - $2M

$1M - $1.5M

<$1M

$3M

78% decrease from 2Q22 87% decrease from 3Q21

Get Smart

1

Units

67% decrease from 2Q22

86% decrease from 3Q21

289% increase from 2Q22

Quarterly Sales by Region

Average % off list price

3Q2022 Sales

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $3.00 90%

2Q2022 $3.65 52%

1Q2022 $3.85 129%

4Q2021 $4.60 123%

3Q2021 $1.58 -27%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $3.00 22%

2Q2022 $4.53 116%

1Q2022 $3.43 89%

4Q2021 $4.53 94%

3Q2021 $2.46 1%

Quail

Quail

Well priced homes move quickly at list price, but buyers are beginning to push back on premiums.

Santa Lucia Preserve

Market Overview

A beautiful sunny summer concluded at The Preserve with kids’ golf, tennis, equestrian and wilderness camps, adultfavorite Wine Fest, Concours and Cocktails, Jazz at the Hacienda and family fun at pickleball socials, softball games, golf tournaments, nature hikes and the dog show all well attended. With over 70 new members and 21+ home sales in the past two years, the Community is as vibrant as ever with full Golf and Ranch Clubs and strong demand for its stunning architecture and privacy in nature.

With only 1 house and 25 homesites on the market, 3Q22 yielded just $7.4m in total sales with one house and two vacant lot sales, down 38% QoQ and down 83.7% YoY. The median home price however moved up 13.4% QoQ but is down 7.8% YoY, due to the variety in inventory with views, style, location and size as the major price differentiators. The 6,424 sq.ft. hacienda style home sale was on the market for 124 days (compared to zero days on for the two homes sold last quarter) and closed at $5.9m (-8.5% off ask) after its original list of $6.95m. This is a sign that sellers’ expectations must come down and buyers have gained some bargaining power.

Our team has one home at 14 San Clemente Trail in escrow closing in October, one stunning home available for $13m at 19 Long Ridge, and buyers eager to make the Preserve their home will have to be patient building or wait for the right house to become available.

After the buyers' frenzy of the past two years, buying up years of inventory, we have seen deal flow plateau and begin to taper in line with lower inventory; however, demand remains strong for quality homes on the smaller side with views located near the Clubs or the front gate regions. We anticipate prices to remain flat, however elevated 30% from two years ago.

Brian Keck

Preserve & Carmel Valley Ranch Specialist

$4M

$3M

$2M

$7.4M

$2.5M

$2M

$1.5M

Quarterly

Average % off list price

3Q2022 Sales

Sellers will benefit from appropriately pricing from beginning.the -9%

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $5.90 -8%

2Q2022 $5.45 44%

1Q2022 N/A N/A

4Q2021 $5.43 44%

3Q2021 $6.40 49%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $5.90 -6%

2Q2022 $5.45 40%

1Q2022 N/A N/A

4Q2021 $5.43 44%

3Q2021 $6.28 37%

Pacific Grove Market Overview

With the third quarter coming to a close, it seems that all eyes are watching the news to see what will happen with this ever-changing housing market. Interest rates have gone up, houses are staying on the market longer and inventory is still relatively low. Is the market correcting itself? We cannot predict what is going to happen, but what we can do is share the data and watch the trends.

Pacific Grove continued to have steady growth in 3Q22, with 51 houses sold compared to 2Q22, with 45 houses sold, an increase of 13%. The days-on-market for houses sold more than quadrupled from last quarter, growing from 10 days to 45 days.

Pricing has decreased approximately 5% from 3Q21 to 3Q22, with the median sales price at $1.38M. We continue to see the trend of low days on market when priced competitively however, buyers are taking their time with due diligence and using their contingency periods to negotiate price. Out of the 51 deals closed in 3Q22, 24 were at asking or above list price, leaving 27 deals closing below asking. In 2Q22, 27 out of 34 deals closed at or above asking. This is a clear sign that we're shifting toward a buyer's market with more negotiations taking place. The Washington Park/Pine Avenue region led the pack with 22 houses sold this quarter. The highest priced sale was in the coveted Beach Tract location on Ocean View Boulevard, which went $155K over ask, closing at $6.6M.

Currently, there are 22 active listings in the Pacific Grove area with an average of 74 days on market and roughly 50% have had price adjustments. Pricing is going to be a key factor when sellers are looking to list their property. They will need to be educated on what has recently sold and be prepared to negotiate. On the flip side, buyers will need to pay attention to the market and inventory as well and make sure they are positioned and ready to make an offer if they see a listing they like.

The coastal town of Pacific Grove offers small cottages to large Victorians with a broad range of pricing making it an inviting place to settle. As we look ahead into the Fall and Winter selling seasons and the pace slows down, think about how I can help you with your Pacific Grove real estate needs. Our Team is here to help make any transaction smooth and seamless.

Kelly Savukinas Pacific Grove Specialist

3Q2022

$8M+

$6M - $8M

$4M - $6M

$3M - $4M

$2.5M - $3M

$2M - $2.5M

$1.5M - $2M

$1M - $1.5M

$76M

Total Dollar Volume

Get Smart 3Q2022 Snapshot

13% increase from 2Q22 21% decrease from 3Q21

51

Units Sold in 3Q2022

45

Average Days on Market

13% increase from 2Q22 20% decrease from 3Q21

327% increase from 2Q22

3Q2022 Top Pacific Grove Sales

1051 Ocean View Boulevard

$6,650,000

913 Ocean View Boulevard $3,700,000

1036 Bayview Avenue

218 Bentley Street

513 Crocker Avenue

80% increase from 3Q21

$2,599,000

$2,325,000

$2,215,109

404 Evergreen Road $1,975,000

1013 David Avenue $1,900,000

472 Gibson Avenue $1,859,265

1186 Jewell Avenue $1,850,000

416 9th Street

987 Syida Drive

$1,800,000

$1,790,000

1022 Del Monte Boulevard $1,775,000

901 Ruth Court

$1,750,000

308 Bishop Avenue $1,705,000

543 Spruce Avenue

$1,700,000

30 Acropolis Street $1,700,000

815 Grove Acre Avenue $1,650,000

731 Eardley Avenue

$1,650,000

Quarterly Sales

# of Sales Beach/Asilomar

Downtown PG Washington Park/PineCandy Cane Lane Country Club/Forest Hill/Delmonte Park

Average % below list price 3Q2022 Sales

Pricing is key in the competitive market.

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $1.38 6%

2Q2022 $1.38 14%

1Q2022 $1.60 14%

4Q2021 $1.25 16%

3Q2021 $1.30 24%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $1.53 2%

2Q2022 $1.52 8%

1Q2022 $1.70 9%

4Q2021 $1.59 24%

3Q2021 $1.51 25%

Carmel Valley Ranch

Market Overview

Carmel Valley Ranch had a strong third quarter as the valley sunshine and Ranch amenities remain attractive to both younger families and retired full-time and part-time residents. We saw strong growth from last quarter with $9.6m invested (up 97% QoQ) across 5 sales but a slowing from same quarter last year (down 13% YoY). The pace at which homes sold also picked up from last quarter with just an average of 24 days on market (selling 38% faster QoQ) but slower than the same quarter a year ago by 33%. The shorter time on market left buyers with less wiggle room in price where the average discount was 2.66% off ask (down 48.5% QoQ); however, compared to the same quarter last year, discounts grew by 50%.

The five sales this quarter included two condos up on the highly sought-after Summit on Fairway Court ($2.05m) and 7 Fairway Lane where buyers are paying premiums for larger square footage and views. The tastefully updated single-family residence on Holt traded for $2.1m with great golf course views and easy access to Valley amenities. The lone Club Place condo sale held strong ($1.61m) selling its first day on the market 1.3% over ask and up nearly 45% from the average price two years ago. Carmel Valley Ranch has consistently been a strong buy and this quarter reinforced the trend. With no homes on the market or pending, sellers can expect to hold the negotiating power as demand remains strong.

We are pleased to provide this analysis about your community and welcome any questions or feedback about this report. You can expect to receive it each quarter but if you need any additional information or would like to discuss how this might impact the value of your home, feel free to reach out any time.

Brian Keck

Preserve & Carmel Valley Ranch Specialist

$9.6M

$4M

$3M

$2.5M

$2M

$1.5M

increase from 2Q22

decrease from 3Q21

increase from 2Q22

decrease from 3Q21

decrease

Quarterly Sales

#

-3%

Average % off list price 3Q2022 Sales

Carmel Valley Ranch

Median Home Sales Price ($M)

Quarter Median YoY % Change

3Q2022 $2.05 12%

2Q2022 $1.60 -14%

1Q2022 $2.46 63%

4Q2021 $1.93 34%

3Q2021 $1.84 31%

Average Home Sales Price ($M)

Quarter Average YoY % Change

3Q2022 $1.92 4%

2Q2022 $1.63 -10%

1Q2022 $2.46 64%

4Q2021 $1.85 17%

3Q2021 $1.85 30%

Steady pace of sales leaves buyers with less negotiating room.