©2014 Merritt Ringer

Read, Seen, or Heard

I heard a great story recently -- I love telling it -- of a little

girl who was in a drawing lesson. She was six and she was at

the back, drawing, and the teacher said this little girl hardly

ever paid attention, and in this drawing lesson she did. The

teacher was fascinated and she went over to her and she said,

"What are you drawing?" And the girl said, "I'm drawing a

picture of God." And the teacher said, "But nobody knows

what God looks like." And the girl said, "They will in a

minute."

~ Ken Robinson

Failure is not an option; it comes bundled with the

software.

~ Unknown

Table of Contents

National Price Rises………………………………... 3

A History of California Prices……………….……...4

Credit Conditions…………………..…….…………5

Different Trajectories..…………………….………..6

Carmel………………………………...….….…… 7-8

Carmel Valley…………………………..….………9-10

Carmel Highlands………………………..…..……10-11

Pebble Beach…………………………….………...12-13

Pacific Grove…………………………..…....….….14-15

Monterey………………….……………….....…… 16-17

Monterey-Salinas Corridor……………………….18-19

Seaside & Marina ………………………….………20-21

An Agent’s Life …………………...….…….…..…..22

End Note …………………………………...…….....23

Caveat: I’m no economist (despite the performance of

most, this is no boast). I also lack the gift of prophecy;

from the evidence, I’m not alone. The information here is

as reliable as I can make it, but isn’t comprehensive. The

opinions are just my opinions; but they were forged on

the front lines of our market.

NATIONAL HOME PRICES

This is a year-over-year index of national home prices, a special breed of graph.

What it shows most eloquently is the rate of price increases has recently stalled a

bit. Prices are still rising well above inflation, just not as rapidly as at the year’s

start.

CALIFORNIA PRICES HISTORY

Slightly dated but entertaining, here’s a chart of general California prices.

CREDIT CONDITIONS

How tight is credit? Ben Bernanke, having completed his tenure as Chairman of

the Federal Reserve, was recently turned down when he tried to refinance his

personal residence. His home is worth less than a million and he’s on the lucrative

speech-making circuit (the rumor is $250K a pop). Presumably, an algorithm

didn’t like his employment status. Of course, some banker is sure to leap at this

opportunity if only for its promotional value. What an eloquent little fable about

our mortgage market.

DIFFERENT TRAJECTORIES:

2 FORMS of FINANCING

CARMEL: NEW ESCROWS

Another brisk month in Carmel, averaging more than a new escrow every day.

Almost 80% of the new sales were asking over a million and a third were over

$2M as the general price level continued to climb. There was one short sale.

CARMEL CLOSED SAMPLES

The sale of this home offers a cautionary tale. The owner, a skilled architect, built

a masterpiece in an area of lesser homes, violating Building Rule #1 (location

matters most). He then violated Selling Rule #1 (price matters most). This home

was on the market, with brief breaks, for over 8 years (!) as he switched agents 7

times and tried 16 price changes (some upwards). Finally, a rising market rescued

him; he sold for $1.720M less than he first asked, closing for $2.075M. With

better footwork, he likely could have made $500-700K more & saved 7 years.

Here, they did everything right. Carmel Point (location, check). Priced right

(check). It sold in 8 days - not 8 years - for just $60K less than the asking, closing

at $2.190M.

CARMEL VALLEY: NEW ESCROWS

Sales volume in the valley has been slowly sliding for the past six months. Prices,

while healthy enough, aren’t ripping the roof off: we saw just 3 sales asking over a

million last month and the highest was asking just $1.525M. There was one short

sale.

CARMEL VALLEY: CLOSED SAMPLES

On a flat acre+ in mid-Valley, this nicely remodeled 2700+ sf home with pool & a

well for landscaping dropped $99k from the ask price to close at $1.4M (+$8.00).

On El Caminito, way above the Village, this modernistic home took a bumpy road

to closing. They started in mid-2012, experimented with 7 different prices, went in

& out of escrow 3 times, switched agents, and finally closed for $130K more (!)

than their lowest ask: $1.025M.

CARMEL HIGHLANDS: NEW ESCROWS

No homes, zero, went into escrow in the Highlands last month.

CARMEL HIGHLANDS CLOSED SAMPLES

No closings in the Highlands, not one

PEBBLE BEACH: NEW ESCROWS

The upper reaches of the Pebble market lit up last month with homes entering

escrow that were asking $31.250M (yes, over thirty million), $10.3M, $5.790M,

and $2.495M. There were no distressed sales.

PEBBLE BEACH CLOSED SAMPLES

On Crespi, just 5 years old, with nice views, this 8,574 sf home had 6 BR/7.5BA,

and sat on over 1.5 acres. It sold, all cash, in 72 days for $8.4M.

Being a tad dated did not stop this 5800+ sf home on Padre with ocean views from

selling. They did have to come down about 20% in price but they did so fairly

briskly, finding a buyer in 166 days & closing for $4M.

Pebble saw 4 closings in September at, or well over, $4M, two in the $2M range,

and none below $1.4M.

PACIFIC GROVE: NEW ESCROWS

Volume in PG continued to be pretty stable. There were no new escrows asking

over a million. One short sale was the only sign of distress.

PACIFIC GROVE CLOSED SAMPLES

On Central, with ocean views, this 3800+ sf Georgian had 4BR/3BA. It took 43

days to find a buyer who paid all cash: $2.350M.

This fixer near downtown had about 1,000 sf, 3BR/1BA. In 7days it sold all-cash

and full-price for $499K.

MONTEREY: NEW ESCROWS

One new escrow asking over a million, one over $900k, two over $800k, and then

lots at prices descending until we ended up with one asking under $400k. The best

news is that not a single distressed sale happened.

MONTEREY CLOSED SAMPLES

Here are 2 homes that sold for the same price, just for comparison

Somewhat remodeled single-level 2600+ sf home in Aguajito Oaks neighborhood

took all of 3 days to find a buyer and sold for $1.1M.

They tried for 6 months to sell this almost 2500 sf Victorian last year without

success. They switched agents, kept the same price, and sold in 80 days for $1.1M.

MONTEREY-SALINAS CORRIDOR: NEW ESCROWS

(east to San Benancio)

Half the new sales were asking in the $1.495-1.575M range, half were under. There

was on short sale. This market continues to plod along.

MONTEREY-SALINAS CLOSED SAMPLES

Monterra, ocean view 5600 sf home with 5BR/5.5BA on almost 3 acres. In 2008,

they sold for $3.8M and have been trying to sell since September, 2012, with a

couple breaks. They finally closed, after switching agents, for $3.2M.

Pretty typical of what Pasadera offers these days: 5200+ sf, 3BR/3+BA. In 2006,

that fateful year of the market peak, this home sold for $2.950M. This time, it sold

pretty quick for almost full price at $1.675M.

SEASIDE & MARINA: NEW ESCROWS

These two towns showed healthy sales volume in September, though there were no

sales asking over $620K or under $219K. Two of the new escrows were bank-

owned and there were 5 short sales. These communities remain a bit more beset

by fallout from the crisis than the rest of the Peninsula.

The Savannah model at East Garrison: brand new, 2800+ sf. It sold in 12 days, no

doubt helped by the agent’s MLS note that the “sales office is open 7 dyas per

week”. It closed at $678.5K.

You’d think the driveway was the most prominent selling feature of this remodeled

3/2 home on Malta in Seaside. It sold in 8 days for $530K.

MARINA & SEASIDE CLOSED SAMPLES

An Agent’s Life

September? It was a blur.

Thank your for taking a few minutes with my e-magazine. Your

comments & questions are welcome. Let me know about issues you’d

like to see addressed here or stories and facts you’d like others to know.

© Merritt Ringer 2013

©2014 Merritt Ringer