News FOURTH QUARTER 2003 REPORT First Published in The Carmel Pine Cone January 2004

Contents Market Barometer Median Sales Prices Gross Dollar Volume Sales by Quarter Distribution of Sales

The Beat Goes On -
Local Real Estate Market Unstoppable



Fourth Quarter & Year End Report

For the third time in the last four years, yearly dollar volume exceeded one billion dollars in the 10 Monterey Peninsula markets. The total for 2003 was $1,153,569,459, slightly above 2002 and just a shade under the record-breaking number of the year 2000.

Digging into the numbers, one finds that the make-up of the gross dollar figure has changed dramatically. The big money markets of Carmel, Pebble Beach and South Coast are all substantially off their 2000 numbers. The other high-end market, Carmel Valley, posted a small gain.

This shortfall was overcome in 2003 by healthy increases in the lower priced markets. Incredibly low interest rates spurred those big gains. Marina's dollar volume reached $49 million last year as opposed to $33 million in 2000; Seaside booked $82 million in 2003 and only $40 million in 2000. Another area of strong increases was the Salinas/Monterey Highway corridor. Dollar volume there has been pumped up by the marketing of the new properties at Pasadera and the expansion of Las Palmas. The Corridor booked $187 million in 2003 as opposed to $99 million in 2000. These numbers reflect the theme of the split market that we have been reporting for a couple of years. Our local real estate market has been, and continues to be, strong at the lower end and relatively weak at the upper or luxurious end of the market. Prices Prices continue their inexorable upward march. Six of the 10 markets posted double digit gains over 2002. Monterey led the pack with a 16.8% gain over 2002, jumping from a median sales price of $535,000 in 2002 to $625,000 in 2003. When the current boom began in 1996, Monterey lagged for a long time in terms of prices. Last year Monterey caught up! These year-end reports are the meatiest ones we do as we have the luxury of reviewing a full year's numbers and of comparing results on an annual basis. You can look at the charts and do your own calculations of comparisons that interest you. Just for fun, we did five years of price appreciation and discovered these interesting numbers: Carmel was up 51.5% in the period from 1999 to 2003; Carmel Valley 42.6%; Del Rey Oaks 87.2%; Marina 71.4%; Monterey 57%; Pacific Grove 49.4%; Pebble Beach 40.9%; Salinas/Monterey Highway 69.8%; Seaside 210%; South Coast 52.3%. Number of Transactions There were 1,391 closed real estate transactions on the Peninsula in 2003. This was the third highest total in the last five years and a bit up over last year. Fourth quarter transactions dipped slightly, from 415 in 2002 to 378 in 2003. Of the 378 sales closed in the 4th quarter of last year 92, or 24%, were for more than one million dollars; 75% of the sales were for more than $500,000. Housing on the Peninsula, even in the so-called affordable markets, has become very expensive. Great Start for 2004 Our Market Barometer was red hot on January 1st. Seventy-five percent of the listings in Marina were in escrow, 66% in Seaside, 44% in Pacific Grove and 36% in Monterey. These are extremely strong readings reflecting a thin inventory.

These numbers may be a bit of an exaggeration as many listings expire on December 31, diminishing the number of listings on January 1. January is also a strong listing month, so, in theory, at least, the inventory should grow during the month. We did a spot check on the above four towns on January 26, and this is what we found: Marina had a total of 17 listings, of which 12 were in escrow for a reading of 70.6%, a little off the January 1 mark but still very strong; Seaside's January 26 reading was 51.5%, Pacific Grove 40.4% and Monterey 33.%.

These were also excellent numbers. As we moved toward the end of the month the market in these towns continued to be strong. These strong barometer readings mean that there will be lots of closings in those markets during the first quarter.

At the cool end of the market the situation is less rosy. Carmel and Pebble Beach had barometer readings of 17% on January 1, and South Coast had an extremely low reading of 10%. Our January 26 spot reading showed that Carmel had moved up a bit to a respectable 22% but that Pebble Beach has slipped to 13% and South Coast to an almost invisible 7%.

Everything points to a terrific beginning for 2004 in the lower priced markets. The high end, though not dead, is struggling. It will have its day again. We just do not know when.

Please Call Us

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.

Many of our buyers are from out of town and before they act they need to gain an understanding of our local market. If you are an out-of-town buyer, you are extremely dependent on your agent for guidance. We are skilled at assisting you up the learning curve so that you can make sound decisions. The way we prosper is by putting our buyers into good, solid situations.

We know the market and would be happy to evaluate the value of your house at no charge. We know how to help you get ready for market to get the best price for your property. Selling a property is a cooperative effort between the seller and his or her agent. We will guide you on the team approach to success.

Please email us, call us at 831-622-4642, or write us at PO Box 350, Carmel, CA 93921.