Monterey County single-family home median price hits $865,000 in January

Peninsula Premier Admin

MONTEREY – January 2021 has seen an all-time high median sales price of $865,000 for single-family homes in Monterey County marking a 33% increase year-over-year and continuing a trend experienced in a surprisingly robust year for real estate in 2020.

The real estate market in Monterey County usually slows down at the end of the year, but in 2020, as with everything else, it was a less than typical year with the median sales price of single-family homes in Monterey County increasing 28% year-over-year from $613,250 in December 2019 to $788,000 in December 2020, according to MLSListings, a multiple listing service for Northern California.

But 2020 had already posted new highs, as the median price for a single-family home in Monterey County reached a high mark of $850,000 first in September, falling to $844,500 in October, before regaining the $850,000 foothold in November and ending at $788,000 in December.

In all of 2020, Monterey County realized price appreciation to new highs with the median sales price, as well as the average price rising 31.4% to $1,346.111, closed sales were up 2.6%, and total sales volume up 32.3% over 2019.

“We may be seeing the work-from-home effect at play here in Monterey County,” said Elliot Eisenberg, Ph.D., MLSListings partner economist, in his Q4 2020 quarterly market overview.

Eisenberg said to expect to see that “continuing effect as buyers move away from the downtown corridors and into the suburbs and rural areas.”

Matt Huerta, Monterey Bay Economic Partnership housing program manager, said that he has been tracking the rise in Monterey County median sales price and sees the “k-shaped” recovery at work here.

A k-shaped recovery describes when after a recession, certain parts of the economy resumes growth while other parts fall behind indefinitely as is occurring during the COVID-19 pandemic.

“Median household income in Monterey County was just over $75,000 in December,” said Huerta. “The amount of folks who can afford a home in that ($850,000) range is 13%.”

To afford an $850,000 home, most loans would require at least a down payment of 20% or $170,000 and would mean earning about $127,000 annually before taxes to afford a roughly $3,000 monthly mortgage payment.

“I can’t recall a time in which I’ve seen an increase of that magnitude” in median sales price, said Kevin Stone, Monterey County Association of Realtors CEO.

Stone said he is not surprised considering the trend of buyers relocating to areas outside of urban centers has been steady since late spring and early summer of 2020.

“In the case of Monterey County specifically, we have seen a number of individuals and families relocate here from the greater Bay Area,” said Stone. “With the flexibility for many tech and other related business to work remotely, there is an obvious attraction to do so in a place where there is less traffic/congestion, better air quality, fewer people, (COVID-19 concerns) and housing that is more affordable – comparatively speaking.”

The median single-family home prices in the other areas covered by MLSListings in December 2020 were $1,700,000 in San Mateo County, $1,375,000 in Santa Clara County, $1,070,000 in Santa Cruz County and $725,500 in San Benito County.

Stone said real estate has continued to be a strong and reliable investment. Sustained demand for housing and a relatively low supply will result in the continued escalation of prices.

“In my opinion, the duration of the pandemic has changed the perceptions of many as it relates to where they choose to call ‘home,’” said Stone. “It is possible we will see a median sales price of over $900,000 in 2021. This of course will present challenges to current residents looking to purchase their first home, or even move up in the market, in a very competitive environment where we continue to lack an adequate supply of housing.”

Huerta said he sees an opportunity to create economic development where there are higher-paying jobs and more effort to address the supply side of the housing market by building more diversity of unit types instead of what we tend to have seen in Monterey County and the region.

“When we do get more supply it’s either at the low end of affordable housing or the high end of luxury homes,” he said.

The Monterey Bay Economic Partnership housing program manager said that collectively Monterey County leaders need to come together and strategically update local housing elements to ensure that local needs are addressed at all income levels and to not fall into the trap of becoming one large bedroom community.

“A lot of it takes political will,” said Huerta.

Contributed by local news sources

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