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Week of November 27th - December 3rd
Property Tips and Tricks
It's the product, not the price
Frequently, buyers fixate on finding that elusive 'bargain.' In highly competitive markets such as ours, efficiency prevails: many seek value, making it unlikely to chance upon a clear 'bargain' amidst competitive bidding. The hunt for an obvious bargain is better suited for those solely focused on real estate investments, rather than those seeking a home for enjoyment.
For some, a home is a mere structure, a basic utility, and they might favor the cheapest deal available. For others, a home is a place to enjoy life, but also a place to create value, which requires someone to be able to see what others may miss in a property.
The ability to recognize true value and determine a 'fair price' is a skill honed through extensive experience. What might appear 'expensive' to some could reveal unexpected value under expert scrutiny. A skilled real estate advisor should be able to repeatedly showcase their expertise in this domain, being able to demonstrate that even an expensive property can offer incredible value.
I've found that superior properties and prime locations consistently yield the best long-term outcomes in both location-based enjoyment and enduring capital appreciation. Allow me to illustrate this observation with a brief anecdote.
I was once involved in the sale of a prime frontline property in Carmel. The home had been passed down from the parents to the children, who, now living out of town, opted to sell it. Discovering the rich history and memories embedded in the house from years past was truly special. Interestingly, the previous owners, nearly four decades ago, sold the beach house for approximately $1 million to buy another residence a bit inland for about $800,000. Today, that frontline Carmel property is valued at around 9 times its original sale price, while the inland house is valued at roughly 3 times its initial sale price.
This story led me to think about the properties that have seen the greatest appreciation over the years. Among them are the oceanfront residences near the Lodge in Pebble Beach, which have soared in value by as much as 40 times since their transactions in the 1970s. Considering the expenses for modern construction in the area, the increase might be closer to 20 times, but it's still an impressive achievement, outpacing inflation by nearly fourfold.
Real Estate News
Housing inventory rises nationally, not here
As we head into the winter season, the amount of homes available for sale typically dwindles. On a national level, home inventory actually rose in November (compared to October), due largely in part to mortgage rates hovering close to 8%. Comparing to previous November months, November 2023 had just over 754,000 active listings across the country, which is 1% above November 2022 and 48% above the height of the Pandemic Housing Boom in November of 2021, when homes were selling incredibly quickly and mortgage rates were historically low.
Here in Monterey County, housing inventory still declined from October to November, falling in line with the trend established in previous years. Comparing to previous November months, in November of 2023, there were 362 active listings in Monterey County (single-family residential), which is 24% below November 2022 but 10% above November of 2021.
Per the Case-Shiller index, prices are up nationally year-over-year by 3.9%, as well as up by 1.3% above last year's peak (June 2022) and up 6.6% since the bottom in January. Nationally, home prices are up 45.1% since March 2020.
While we do not have access to the same sort of data on a County-wide level as the Case-Shiller, we can make a few inferences by looking at the median sale price of single-family homes in Monterey County, which landed at $925,000 for the month of November, compared to $815,000 in November of 2022 and $918,500, which is when the median sale price peaked in 2022 (March of 2022). The median sale price in Monterey County is up by around 37% from March of 2020.
Big picture - the real estate market is still marching along, inventory is still low, and prices are still healthy.
Looking at the high-end market, the combined worth of super-prime homes sales nationwide, valued at $10MM and above, reached $31.7 Billion in the 12 months leading up to September 2023, which is a decrease from the peak of $40.7 Billion seen in 2021 after the pandemic, yet notably surpasses the pre-pandemic figure of $18.6 Billion in 2019.
Here in Monterey County, the combined worth of super-prime homes sales reached $191.9MM in the 12 months leading up to September 2023, a decrease from the peak of $352.6MM in 2022, yet surpassing the pre-pandemic figure of $78.5MM in 2019.
Worked with me in the past? Share your experience.
Jonathan Balog
DRE# 01980970
Broker
M: 831.747.0310
[email protected]
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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