This is the time of year we get asked most how the Monterey Peninsula real estate market is doing. And the honest answer usually starts with a question of its own ... compared to when?
So I wanted to write to compare the last three springs side by side, and share what we are seeing and experiencing firsthand.
Here is a quick recap of the last three Januarys through May. Any single month can make a big change, but looking at these five months makes the picture a lot clearer.
2024 — inventory still tight
The spring of 2024 was a cautious one. Mortgage rates were sitting near 7%, there was not much for sale, and not a great deal traded ... about 229 homes closed between January and May, the fewest of the three years here. Buyers were patient, and most would-be sellers stayed put as we heard about “the lock in effect.”
2025 — the “year of choice”
A year later, one thing changed in a big way. Inventory started to swell, and by the end of May 2025 there were about a third more homes for sale than the spring before. But demand did not climb to match it, and closed sales nudged up only a little. With more to choose from, buyers had room to be selective, and the homes that came up had plenty of company on the market.
2026 — tightening
And this spring has turned that balance back around, to the surprise of many. It isn't clear until you look at the numbers that inventory has pulled back from last year's high. Interest rates eased to start the year, the lowest of the three springs (about 6.5% at the end of May, down from nearly 6.9% a year ago), and closed sales have reached a three-year high. But there are still fewer homes coming on the market, and of the ones that do, more are selling.
The thread running through all three
Here is what stands out to us, having watched these markets and the buyers and sellers in them for years. Each of the last three springs built real momentum early, only to run into a major world event that gave buyers pause (the election in 2024, tariffs in 2025, and the war with Iran in 2026). And yet the thread running through it is resilience ... closed sales have risen every single spring, even through those headwinds. What is surprising now is that the constraint is on supply, not buyers, which is exactly what many of you are feeling on the ground: a little less to look at, and a little more competition for the homes worth having.
This is especially pronounced in the high end markets. In Carmel-by-the-Sea's Golden Rectangle, Northwest Carmel, and along the Monterey Peninsula golf course in Pebble Beach, inventory has been thinning for years, and the best homes keep their premium no matter the season.
So what does all of this mean for you? That depends on your market focus and price point, because the averages only tell part of the story. If you are weighing a move in either direction, we are happy to put together a specific plan, analysis and roadmap that might help you navigate this finicky market.
