First Half Huddle: Monterey County Real Estate’s Midyear Scorecard

As we transition into the second half of 2024, it's a good time to reflect on the real estate market's performance over the past six months. I'm pleased to report that our market has demonstrated remarkable resilience and strength during this period, despite the various challenges and fluctuations we've encountered.

Below we'll compare the first half of 2024 with previous years to gain insights into our market's trajectory. I've compiled a detailed chart which I'll be referencing throughout. The data on the chart will serve as the foundation for the observations and trends explored.

Now, let's dive in:

Overall Market Trends

• Slight decrease in the number of sales compared to last year

• Overall sales volume is up, largely due to higher prices

• Both the median sales price and price per square foot are up compared to the first half of 2023

• Inventory has increased slightly, but still sits far below what it was a couple of years ago

• High prices and interest rates are affecting buyer behavior, more at lower price points/sub-luxury

• Some buyers are priced out of the market while others choose to wait before purchasing

I normally do not group too many price points, but to paint a few broad strokes, I've broken the market down into a couple of segments to provide a few takeaways:

Luxury Market ($2MM+)

• Strong performance overall

• Compared to the first half of last year, there are more sales, both a higher median sales price and a higher price per square foot

• The average sales price is down slightly as certain products (larger homes in Pebble Beach) are in less demand

• Active inventory in June 2024 at a 4-year high

• The sales velocity in this market segment is stronger than the sales velocity at lower price points in our area

Mid-Range Market ($1MM-$2MM)

• There has been a significant increase in inventory lately

• This price range presents the most opportunity for buyers today

• The only price range with both median and average sales prices down year over year.

• Moreover, the median and average sales prices are sitting at a 4-year low

Market Outlook

• Expectations for the summer months include more inventory coming online and an increase in sales activity

• Certain sub-markets offer more opportunity for buyers (properties in need of renovations)

• Sellers can expect strong sales prices, but it is not advisable to test aspirational pricing

Potential Market Shifts

• Continued Inventory growth without parallel sales growth could put downward pressure on pricing

• A significant rise or drop in interest rates will affect the market, lower price points are more sensitive to this