Signals from the Spring Market

A few signals we've been tracking as we move into summer on the Monterey Peninsula.

You've probably heard the economy described as "K-shaped," where the two sides of the country are having very different experiences. One side is buoyed by stock market gains and business profits. The other is squeezed by inflation and higher interest rates. That divide is showing up directly in who is buying homes here. (Compass Chief Economist Mike Simonsen breaks down the national version of this dynamic, and it's worth a viewif you want the macro view.)

Cash is leading the market

So far in 2026, 54% of Peninsula sales have closed in cash. In Pebble Beach, it's 77%. Buyers with capital are moving, and they are not waiting on rates.

Here is how it breaks down across our markets, January through mid-June:

The pattern is clearest at the top of the market, where buyers depend least on financing and respond most to where the broader economy is sending capital.

Rates eased, but inventory tightened

Rates actually started 2026 at the lowest point of the last three springs, around 6.5% at the end of May, down from nearly 6.9% a year ago. And buyers showed up: 260 homes closed January through May, a three-year high, up from 241 last year and 229 the year before.

Supply went the other way. Homes for sale at the end of May fell to 219, down about 17% from 265 a year ago. Fewer homes are coming on, and a greater share of those that do are selling.

There's a structural reason behind the tight supply.

More mortgages now carry a rate above 6% than below 3%. Homeowners sitting on very low payments are reluctant to sell and trade into a higher rate, so they stay put. Over time, as fewer owners are locked into those ultra-low rates, more homes will come to market. For now, supply stays tight.

What it means if you're thinking about a move

If you're looking to buy and you find the right home, it's worth moving rather than waiting to time rates. If rates drop, remember that every other buyer on the sidelines is watching the same thing, and they'll be back in the market with you.

If you want to compete with cash, you have options. We've helped several clients make a strong cash offer and then finance the purchase on the back end with a bridge loan. It's a way to win the home now and sort out the financing after.

Let's talk about your situation

Thinking about a move this year? We're glad to put together a quick read on your specific neighborhood and price point, with no obligation. Reach out and we'll send you the numbers that actually matter for your decision.

The Bambace Peterson Team bambacepeterson.com | 831.200.3178