Monterey Peninsula sales transactions in the summer months remained strong. This has been true for the past several years. Median sales prices remain steady across all markets.
Certain markets and price points are extremely competitive with several different types of buyers. These include: First time homebuyers, second/vacation homebuyers, investors for remodels (i.e. “Flippers”), and investors for rental properties.
When homes come on the market below certain prices in each respective market they receive an offer(s) quick. A valuable “Competitive Price Point” metric for each market is the average of the median sales price.
A “median price” is that half the homes sell above that price and half sell below that price.
The metric of both “Six Months” and “12 Months” illustrates the moving competitive price point.
To illustrate the point, let’s look at one market, Monterey, and the properties currently under contract.
As of October 19 there are 22 homes in escrow.
The “Competitive Price Point” metric is $893,317.
6 homes in escrow are above this ($900,000-$3,650,000) with average days on market of 87 days.
16 homes are in escrow below this ($545,000-$875,000) with an averagedays on market of 49 days – 44% fewer days on the market.
Homebuyers: Trying to buy a home below the Competitive Price Point requires a well-prepared and solid offer. This includes cash or all pre-qualifications complete so that you are ready to present an offer (with limited contingencies) right when the house comes on the market. For those above the Competitive Price Point, there is an inverse correlation as to how many potential buyers there are based on the price. As price increases, there is less competition (buyers) for the property.
Home sellers: For the same reason, trying to sell a home above the Competitive Price Point takes a longer time. Make sure to be transparent with all information and inspection reports to reduce any friction or opposition of why a buyer might object to writing an offer. For those homes priced below, having pre- inspection reports is also important, as you can expect a more active listing and having this information readily available for buyers helps invoke confident offers that maximize the value of your property.