Carmel Valley real estate sales in November were the highest sales level in 5 years, even outpacing November 2005 by 19%. The primary driver for the sales results was the growth in Carmel Valley condo sales. While condo sales increased over the previous 4 years, detached home sales had a significant increase versus November 2008, however detached home sales were lower than the 2005 to 2007 time period. Detached homes had a high level of pending sales in October; however, 30% of the October pending sales did not close escrow in November causing the sales to be lower than expected. The probable cause is the short work month due to holidays. The Carmel valley real estate market has experienced a significant sales mix change over the past 5 years with both detached and condo homes. Detached home sales have seen the 2800 to 3100 sq ft homes (current average price $882,000) increase from 10% of sales to 33% of current sales while the 3100 to 4000 sq ft homes (current average price $1,085,000) decrease from 24% to 11% of current sales. For condo sales the 1000 to 1200 sq ft homes (current average price $394,000) increase from 17% to 37% of sales while the greater than 1800 sq ft homes (current average price $605,000) decrease from 29% of sales to 4% of sales.   

The big news in inventory is that since August Carmel Valley inventory has reduced by 34%, both detached and condos had significant reductions. Since August the market has seen a steady reduction in new listings, to the point that November only had 59 new listings. This steady decline in new listings explains the major reason for the inventory decline. If this is seasonal, we would expect to see new listings increase after the first of the year.

Comparing Carmel Valley detached prices versus San Diego detached prices from 2003 through 2009 we can see how different the impact has been from the real estate crisis of the past few years. From 2007 to now the San Diego detached prices have declined 36% while the Carmel Valley detached have declined by 10%, based on overall averages. This is based on two major items, months supply and the level of distress sales – foreclosures and short sales – in the market. Since May 2009 the number of foreclosure sales in Carmel Valley was 6% of sales while for San Diego foreclosure sales have exceeded 30%. During the period of major price declines – 2007 through the early part of 2009 – San Diego was experiencing double digit months supply while Carmel Valley was in the 4 to 6 month range. Both high foreclosure sales and high months supply are causes of major price declines and Carmel Valley has been protected on both counts.

Carmel Valley price trends for both detached and condos have similar characteristics. Price volatility is more pronounced for both at the higher end of their market. As a general statement Carmel Valley appears to have experienced the largest price drop in 2006 whiles the overall San Diego market had its’ major decline during 2007. After 2006 Carmel Valley inventory had major reductions in inventory which more than compensated for the decline in sales keeping supply and demand in some semblance of balance, while San Diego’s inventory ballooned causing double digit months supply causing home prices to go into major decline. The major pricing issue facing Carmel Valley real estate is the out of balance supply/demand relationship of the high end of the market which indicates further price erosion.