2Q2022 Pebble Beach Market Update
The Pebble Beach market concluded the first half of ‘22 on a subdued note with the slowest quarterly activity since the start of the pandemic – posting 24 sales and total investments of $115.2M. These totals represented a -25% slide in deal flow and a -50% dip in dollar volume from 1Q22 and a -55% drop in sales and a -48% cut in investments from this same quarter last year. In retrospect, although the slower deal flow was 36% below 2Q historical averages, dollar volume was up 32% - signaling competitive negotiations throughout the quarter continued to hold home values firm.
Median sales prices for the coveted areas of Central Pebble Beach and Monterey Peninsula Country Club rose this quarter to highs of $10M (+20.6% QoQ) and $2.77M (+9.7% QoQ) respectively while the Upper Forest retracted to $775K (-58% QoQ). This anomaly was due to zero available single-family homes in the Upper Forest area and only condos in that region selling above the list prices but below the $1M threshold.
The top of Pebble’s market ($10M+) remained active with 5 closed escrows and 2 sales pending while the $7M-$10M price bracket is beginning to saturate - posting zero sales this quarter while representing 32% of active listings. The $2M-$3M (5 sales) and $3M-$4M (4 sales) price brackets posted solid gains – propelled by strong demand for homes under $4M. Interestingly, the $1M-$2M price bracket stalled this quarter (1 sale) but for a unique reason as razor thin inventory levels and strong demand pushed sales in this price bracket up – holding the entry ticket for single-family homes in PB above $2M.
Even as inventory levels rose from 16 to 28 actively listed by quarter’s end and the average days on market for actives rose to 111.1, the average days on market for sold properties shrunk from the previous quarter to 28.7 (-30% QoQ). These differing dynamics reflected a combination of pent-up buyer demand in the lower price points and a plateauing of activity in the upper price points where the majority of listings are concentrated.
With the various extraneous market influencers like rising interest rates, global supply chain disruptions and a tapering economy, overall buyer sentiment has begun to shift towards a more cautious behavior pattern, which is moving the needle away from a heavily favored sellers’ market that we’ve experienced over the last few years. As we head into the 2nd half of the year, we anticipate the market to continue its mild tapering trend and a rebalancing of negotiations between buyers and sellers.