MONTEREY – The median home price in Monterey County remained relatively flat at $857,000 compared to the same time last year, when it was $852,778. Although inventory was down only slightly by 1%, new listings fell 18% and homes for sale stayed on the market 33% longer compared to a year ago.
“The record median home price was March 2021 at $918,500,” said Adam Pinterits, director of government and community affairs for the Monterey County Association of Realtors. “The median (highest) home price this year was again in March at $912,000.”
Month-over-month, the median home price in June was down 5% from May when it was $900,000, inventory was up 7%, the number of new home listings on the market fell 17% and homes stayed on the market longer, rising 33%. %.
Pinterits said many factors are contributing to the recent increase in average days on market, but rising interest rates are a big factor.
In May, national figures showed mortgage rates rose 230 basis points from a year ago (1 percentage point equals 100 basis points), from 3.01 to 5.31% . Compared to a year ago, the monthly mortgage payment rose from $1,220 to $1,842, an increase of 51%, and the median family income increased by 4.5%.
According to the National Association of Realtors, the annual mortgage payment as a percentage of income rose to 24.4% in May from 16.9% a year ago. Largely due to rising house prices relative to modest gains in median family income and rising mortgage rates. Regionally, the West has the highest mortgage payment to income ratio at 35.8% of income. Mortgage payments are not considered onerous if they do not represent more than 25% of income.
MLSListings County Summaries reported that a median single-family home in Monterey County cost $857,000 in June and sold for 100% of list price, compared to Santa Cruz County where the median single-family home cost $1.325 million. dollars and was selling for 104% of the selling price. registration price. In Santa Clara County, the median cost was $1.8 million and sold at 106% of the listing price, and in San Mateo County, where the median single-family home cost $2 million and sold for is sold at 109% of the sale price. In San Benito County, the median single-family home fetched $859,500 in June and sold for 99% of list price.
In Monterey County, the drop in the number of new registrations cannot be attributed to a single cause, said Pinterits, who added that there is usually an increase in the spring, so a drop in the month-to-month comparison to another from May to June is not entirely surprising.
“Interest rates are again a factor because those looking to sell are often buyers in turn and may be hesitant to sell when they then have to buy at higher rates,” he said.
The Monterey County median home price is not expected to decline significantly this year or for the foreseeable future as long as supply exceeds demand, Pinerits said.
“Over the long term, the single most important factor in solving the affordability problem, particularly on the Monterey Peninsula, is a new, sustainable, drought-tolerant water supply,” he said. “Until such supply is established and housing inventory is increased, supply is unlikely to come close to meeting demand.”
The Monterey County real estate market is being impacted by rising interest rates which is contributing to higher median days on market and lower new listings and overall inventory, prompting potential sellers to consider waiting and maybe renting the property.
“That could reverse somewhat if interest rates drop and proposed new rental regulations cause them to sell instead,” Pinterits said. “This in turn could contribute to the continued availability of rental housing and affordability issues. It comes down to an inventory problem, insufficient housing supply exacerbated by a lack of water supply and new construction which continue to be driving factors in our housing market trends.