Real Estate Report presented by Thérèse & David Kent CRS / Alain Pinel Realtors

May 2018 Report

Single Family Homes in Monterey County, Carmel Valley, All Neighborhoods Change >


Median Price
$1,169,000
-25.9%
Average Price
$1,463,580
-7.0%
No. Sold
12
+100.0%
Pending Properties
17
-10.5%
Active
56
+24.4%
Sale/List Price Ratio
94.2%
-0.3%
Days on Market
107
+80.3%
Days of Inventory
135
-39.9%

Market Barometer

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Market Commentary

Prices & Sales Up in April

The median sales price for single-family, re-sale homes in Monterey County rose 8.2%, year-over-year, to $607,750 in April. 

The average price for homes was up 3.1% compared to last April: $897,708.

The median price for condos jumped 16.2% year-over-year to $495,500. The average price jumped 34.1% to $618,192.

Home sales were up 31.8% year-over-year. Condo sales were 36.8%.

The sales price to list price ratio, or what buyers are paying compared to what sellers are asking, continues to hover just below the 100% mark.

The ratio for homes was 98.6%. For condos it was 99.4%.

Property is selling slightly faster than normal. It is taking only fifty-one days from when a home comes on the market to when it goes under contract. The average for the past fourteen years is sixty-eight days.

For condominiums, it took sixty-five days from listing to contract in April. The average is sixty-six days.

Inventory, or the lack thereof, continues to be the biggest factor in the Monterey market, as it is throughout the Bay Area.

There are only sixty-five days of home inventory. The average is one-hundred and ninety-three.

For condominiums, there are sixty-one days compared to an average of one-hundred and ninety-four.

As of May 5th, there were five hundred and twenty homes for sale. The average is 1,333.

There were fifty-five condos for sale. The average is one hundred and twenty-two.

Selecting the Right Mortgage

Selecting the type of mortgage that best suits your needs is not a simple undertaking. The right mortgage will depend on many different factors, including your financial situation and how you expect it to change in the future, how long you'd like to keep your house, and how comfortable you are with the possibility of your mortgage payment changing.

For example, a 15-year fixed-rate mortgage can save thousands of dollars in interest payments over the entire term of the loan, but your monthly payments will be greater. With an adjustable-rate mortgage, you may start with a lower monthly payment  -- but your payments could increase.

The best way to find the right mortgage for you is to discuss your finances, plans and preferences with a mortgage professional, whom your REALTOR® can recommend.

FIXED-RATE MORTGAGES

Fixed-rate mortgages, the most common type of mortgage, offer consistently stable monthly payments. Your property taxes and homeowner's insurance may increase, but your monthly payments typically won't fluctuate.

With fixed-rate mortgages, you have the option of choosing a 30-year, 20-year, 15-year or 10-year repayment plan. You may shorten the loan through a biweekly mortgage, allowing you to make the equivalent of an extra month's payment per year. In selecting the length of your repayment, remember that a shorter loan carries higher payments but accrues less interest and allows you to build equity quicker.

ADJUSTABLE-RATE MORTGAGES

The interest rate on an adjustable-rate mortgage (ARM) is dictated by changing market rates. When interest rates rise, your monthly payments will go up, and when interest rates decrease, your monthly payments will go down accordingly.

ARMs often provide a lower initial interest rate than fixed-rate mortgages, attracting people who need lower payments early in the loan in order to qualify for a mortgage. ARMs also can benefit people who plan to move or refinance in the near future or those who expect their incomes to increase in the coming years.

Before applying for an ARM, find out how high your monthly payments can go during the life of the loan. An ARM includes two caps or limits on interest rate increases; one cap states the boundary for how high your interest rate can go during each adjustment period, and the other cap sets the maximum total amount of all interest adjustments over the entire term of the loan.

The rates of an ARM typically change once or twice a year, and there is usually a lifetime cap on both the individual rate adjustments and the total amount the rate can change over the life of the loan. By applying the terms of the caps to your mortgage payments, you can anticipate the worst-case scenario prior to applying and determine if this figure is in line with your finances.

REVERSE MORTGAGES

A reverse mortgage is a loan made to senior homeowners that allows them to convert the equity in their homes to cash for living expenses, home improvements, in-home health care, or other needs.

To obtain a reverse mortgage, you must meet certain criteria that differ greatly from the qualification requirements for other mortgages. Reverse mortgages are generally limited to borrowers 62 years or older who own their own homes either outright or nearly so. Homes also must be clear of tax liens. And, unlike other mortgages, seniors don't have to meet income or credit requirements to qualify for a reverse mortgage.

Borrowers typically have the option of receiving the reverse mortgage's proceeds in the form of a lump-sum payment, fixed monthly payments for life, or a line of credit. A reverse mortgage's interest rate is usually an adjustable rate that fluctuates monthly or yearly. However, the size of monthly payments that borrowers receive doesn't change.

BALLOON MORTGAGES

Balloon loans are short-term mortgages with some of the features of a fixed-rate mortgage, like low interest rates, but without the benefit of full amortization. As opposed to a 30-year fixed-rate mortgage, balloon loan payments only cover part of what you've borrowed during the term of the loan. At the end of the term, you're required to pay off the loan's balance by refinancing or making a lump-sum payment.

Balloon mortgages are typically five-, seven- or 10-year loans, so they can be beneficial to borrowers who anticipate selling or refinancing their homes in a short period of time.

Many companies offer a conversion feature at the end of the loan's term. For example, the loan may convert to a 30-year fixed loan at the 30-year market rate plus a certain percentage point. To qualify for a conversion, you usually need to be in good standing with the payments on your balloon loan. Balloon mortgage programs with conversion options are also called a 7/23 convertibles or 5/25 convertibles.

BUY-DOWN MORTGAGES

Today's mortgage lenders have developed variations on the old buy-down method of offering an interest rate that is 2 percent below the fixed rate for the first year and 1 percent below the fixed rate for the second year, followed by 28 years of paying the regular fixed rate. Buy-downs now charge higher interest in the beginning of the loan to cover the future yields.

For example, if the current market rate for a fixed-rate loan is 8.5 percent at a cost of 1.5 points, the buy-down gives the borrower a first-year rate of 6.5 percent, a second-year rate of 7.5 percent and a third- through 30th year rate of 8.5 percent. The cost would be 4.5 points.

Prices & Sales

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Days of Inventory

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Sales to Date

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Sales Price Ratio

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