There have been a few great articles in the papers lately about the very active local real estate market with COVID 19. We wanted to share a little bit about our experience with it so far, and some of the sources of all this action.
One important concept is that Monterey Peninsula real estate has been active in all price ranges. From the 550,000 single family homes in Seaside and Marina to multi multi million dollar estates in Pebble Beach, Carmel, Carmel Valley and Big Sur, the market has been on fire for the last couple months. Here’s why – buyers getting conventional conforming loans buying in the $500,000-$850,000 range have never had more buying power than right now with all time low interest rates. They can afford more house than ever before due to these rates, and so they are taking advantage of the opportunity to find a great long term investment knowing they are buying real estate on the California coast. They’re buying with confidence – not waiting to time the market, not waiting for a correction. They’re taking full advantage of great debt.
We’ve also seen a surge of activity in the 1.5-3 million range where those buyers are also taking advantage of great financing by getting large jumbo loans at unbelievable interest rates. They have a significant amount of money to put down – let’s say on a $2,500,000 they put down 25% – that’s over $600,000 down and borrowing almost 2 million at a great rate. Banks are inundated with applications to refinance existing mortgages, and new mortgage applicants, and lenders are working harder than ever to process these loans. As a borrower, it’s critical to work with an experienced lender you trust, and we can make those recommendations.
In addition to jumbo financing, we are seeing many cash purchases in a wide range of price points. Cash offers are very attractive to sellers who understand that banks have so much activity lately, and with cash there is no risk of those delays, but many financed purchases are being done.
Buyers are coming from all of our major feeder markets – the Silicon Valley, Texas, Los Angeles. Texans are trying to get away from the summer heat, Silicon Valley executives are seeking refuge to a less densely populated environment as working from home becomes more and more of a long term plan. We’ve also noticed many local transitioning families trying to move from Monterey to Carmel for the school districts, or Carmel to Carmel Valley for the sun. With high prices and great interest rates, it’s undoubtedly a great time to sell, and a great time to buy right now on the Monterey Peninsula.