Taking Stock of It All: Q1 2026 Monterey Peninsula Market Update

In this issue I’m covering several themes: the stark divergence between record corporate profits (especially AI-driven) and national housing trends, the latest housing data, gold’s historic overtake of U.S. Treasuries as the world’s top central bank reserve asset, a 30-year comparison of Monterey real estate versus gold, the long-term impact of money printing on housing prices, and the proposed “mansion tax” in Monterey County.

Local Q1 2026 market numbers for Monterey County and the Peninsula are at the end—feel free to skip straight there if you’d like the local story first.

Corporate Profits vs. National Housing: A Tale of Two Markets

While the national housing market continues to move toward balance, corporate America—particularly the companies driving the AI boom—is delivering strong results. The largest U.S. public companies are on track for 13%+ earnings-per-share growth for the sixth consecutive quarter.

The Mag 7 Effect

Four of the seven Magnificent 7 companies (Apple, Google, Meta, NVIDIA) are headquartered in the Bay Area. Here’s how their local market compares to the national picture:

What This Means for Monterey County

Localized wealth concentration matters far more than national averages. Strong corporate profits, stock grants, and executive compensation in the Bay Area continue to support demand in premium coastal markets like Monterey through second-home purchases, relocations, and cash buyers seeking quality of life.

National Housing Market — What the Latest Data Is Telling Us

• New listings rose 3% year-over-year in the four weeks ending April 19, the largest increase since November.
• Mortgage rates eased to 6.3% (down from 6.46% two weeks earlier).
• Pending home sales declined only 1.2% year-over-year, the smallest decline in recent months.
• Home price growth slowed to +1.7% YoY in March, the slowest annual growth since 2012.
• Median days on market increased to 54 days (5 days longer than a year ago).
• Price reductions rose to 18% of listings (up from 16% a year ago).
• Only 25.6% of homes sold above list price.

Gold Overtakes U.S. Treasuries as the World’s #1 Central Bank Reserve Asset

For the first time in 30 years, central banks now hold more gold ($4 trillion) than U.S. Treasuries ($3.9 trillion). Decades of government spending and money printing have clearly eroded confidence in fiat currency.

With all this talk of gold over the past several years, I ran a split-test investing scenario for fun—what if you had around $60K in cash to invest in 1996? Should you have just bought gold, or put that money down on a rental property on the Monterey Peninsula?

The Seed Money Showdown: Monterey Real Estate vs. Gold (1996–2026)

If you had $58,750 in 1996, which path would have performed better?

How well did the S&P 500 do over the same period? Your $58,750 would have turned into $1,072,000—much closer to the return on real estate (but you would have missed out on some nice tax deductions along the way).

A 30-Year Fixed Mortgage Is a Long-Dated Call Option on Inflation

What does this mean? You borrow today’s dollars at a fixed rate and repay in tomorrow’s cheaper dollars while your house price rises with the tide of new money. You are long the house and short the dollar. Here’s how that shows up over a long stretch of history:

Looking ahead, I do not expect money printing or government deficit spending to slow meaningfully in the coming years. As a result, I anticipate continued upward pressure on asset prices, particularly on desirable real estate.

Local Policy Watch: The Proposed “Mansion Tax”

Monterey County supervisors voted unanimously to study placing a new real estate transfer tax on the November ballot for multimillion-dollar homes in unincorporated areas (Carmel Valley, Carmel Highlands, Pebble Beach, Big Sur). Projected revenue: $1.7M–$8.7M annually, depending on the rate (1–5%).

Los Angeles’ Measure ULA (the original “mansion tax”) has raised over $1 billion since 2023, yet:

• High-end transaction volume dropped 38–55%
• Property tax revenue loss from fewer sales offsets a significant portion of collections
• Only ~175–187 genuinely new affordable units have been completed so far

Q1 2026 Market Update: Monterey County & Monterey Peninsula

The first quarter of 2026 reflected continued resilience in the Monterey real estate market. While new listings moderated slightly, sales volume increased meaningfully year-over-year in both the county and the Peninsula, driven by higher average prices. Buyers continue to take more time to decide, resulting in longer days on market.

Source: MLS · Single-family residential · Monterey County.

Source: MLS · Single-family residential · Monterey Peninsula.

Key Takeaways for Q1 2026

• Sales volume rose significantly in both areas (+14% county-wide, +22% on the Peninsula), fueled by higher average transaction prices.
• The number of closed sales remained stable or modestly higher, while new listings declined slightly, contributing to tighter active inventory on the Monterey Peninsula.
• Buyers are exercising greater caution, with median days to sell increasing notably (especially on the Peninsula).
• Price per square foot continued its upward trend in both markets, confirming sustained demand for well-located properties.

Overall, the first quarter of 2026 points to a healthy, balanced market with strong pricing power despite a more measured pace of transactions. This environment continues to favor well-prepared sellers. Buyers are granted more time to evaluate options as the median days to sell in both the County and on the Peninsula are up year over year. Homes priced above the median price range continue to do well, while more affordable options struggle to find buyers.