When we advise our clients looking forward at the 2020 market, it’s important to reflect on the last few years and consider a few economic factors from a local, state, and national scale.

The 2020 Monterey Peninsula Market

2015-2018 was a busy time for Monterey Peninsula real estate. It was a strong sellers market with low inventory and ready and able buyers. Interest rates were good, but not as great as they are today. In summer and fall of 2019 we noticed a subtle softening in local real estate activity, and interest rates dipped below 4%. This ignited another surge in market activity and real estate has been consistently moving as we look ahead to 2020. There are many national concerns over 2020 politics, and state wide concerns over the housing shortage, but California is taking steps to increase housing possibilities by passing bills making the development of Accessory Dwelling Units much less difficult. This is great for both tenants looking for housing and homeowners looking for rental income or convenient housing for family members. Regarding political concerns, we have to consider we are in very small, niche market with undeniable appeal for buyers due to our location and environment.

Interest rates continue to remain low making buyers more capable than ever, and while we are seeing some price reductions, properties continue to sell very quickly when priced right. There is a balance within the marketplace right now that we anticipate will continue in 2020. Buyers are ready and willing to buy, but are more cautious about their offer prices than in recent years.

We think interest rates will continue to remain low for the first few months of the year, and we’re not sure what will happen with rates in the fall and winter seasons of 2020. For now, the economy is showing no signs of a correction in our local market, but we’re very interested to see how the development of ADU’s will influence the market in the next few years, and how access to water will play a role in those initiatives. Overall, we’re pleased with the direction 2020 is heading and we’re expecting a healthy market.