Limited inventory, strong demand buoy Monterey County median home price – Monterey Herald

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SALINAS – The median single-family home price in Monterey County rose slightly by 1% year-over-year in October to $864,200 as closed sales dropped 37% from the same period.

There were 152 closed sales of single-family homes in Monterey County in October, compared to 240 in the same month in 2021.

“To put that in perspective, constrained inventory in our region makes fluctuations in sales volume that might be less remarkable in other markets seem more significant here,” said Monterey County Association of Realtors Government and Community Affairs Director Adam Pinterits.

Month-over-month, single-family home sales dropped 22% from September to October in Monterey County.

“Recent slowing in sales was recorded following repeated interest rate increases,” said Pinterits. “What is not yet reflected in the market data is this week’s dip in interest rates, which should help buyer demand pick back up to a degree.”

According to published reports, mortgage rates dropped nearly half a percentage point this week.

The 30-year fixed-rate mortgage is averaging 6.61% for the week ending Nov. 17, decreasing by 0.47 percentage points from a week ago, according to Freddie Mac. The week-over-week change in rate is the largest since this summer. Other loan types are seeing lower rates as well, with the 15-year fixed-rate mortgage decreasing by 0.4 percentage points to 5.98%.

According to MLSListings, closed sales were down year-over-year in the other four counties it reports on in October with Santa Cruz, San Benito and Santa Clara counties showing a 38% drop and San Mateo County with a 39% decrease in closed sales.

The median cost for a single-family home in Santa Cruz County in October was $1.3 million, in San Benito County it was $763,000. Santa Clara’s cost was $1.6 million and the median cost in San Mateo County was $1.8 million.

The inventory in Monterey County was 448 homes on the market in October, down 5% from the previous month and down 1% from the same time last year. The number of new listings in October was down 26% from September and decreased 43% from October of last year. The percent of sales price to list price in October was 99%, compared to 101% the same time last year.

But single-family home in Monterey County spent more time on the market year-over-year going from 11 days in October last year, to 19 days on the market in October this year, a 73% increase.

“Several factors influence days on market,” said Pinterits.

Some sellers do not adjust their price expectations as rapidly as the market changes. As demand moderates in step with interest rates, sellers who must buy a different home in turn may be reluctant to adjust their asking price, he said.

“This is especially true for prospective sellers who bought at low interest rates and now may be faced with as much as double the interest to buy a different home after selling their current residence,” said Pinterits. “Average days on market also tend to stretch a bit longer in this time of year.”

With Monterey County single-family home median price increases of 5% month-over-month and 1% year-over-year, the county’s median home price seems to be staying relatively stable.

Pinterits explained that Monterey County is a unique and desirable place to buy a home for many reasons.

“Local quality of life combined with relative proximity to strong employment and business opportunities and ongoing hybrid and remote work acceptance, keeps buyer interest in our area relatively strong despite rate changes,” said Pinterits. “We also have a great community of realtors who work hard to match sellers with the most qualified buyers.”

Pinterits said that in the longer term, approval of the Monterey Peninsula Water Supply desalination project by the California Coastal Commission will help ease constrained inventory and improve affordability. For now, the Monterey County Association of Realtors expects limited inventory and strong demand to continue to keep prices stable or growing.

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