Trends are interesting. You almost have to drill down to neighborhoods to get an accurate picture of values increasing or decreasing. For instance, in Seaside Highlands, prices have held reasonably well until recently. Many of the homeowners there had owned older properties on the Peninsula. They let those rental properties go to foreclosure while desperately trying to hold on to their primary residence in Highlands.

Well now they have to let the Highlands properties go and we're seeing more foreclosures, which has brought down selling prices in Highlands. Interestingly enough, in the older neighborhood where they lost their rentals, prices are starting to rise slightly. Remember that pricing is usually dependent on comparable sales, which date back 4-6 months. So many of the newest property prices are reflective of those sales. As more and more properties sell for higher, the comparables start raising the prices.

My instinct says that we'll see prices increase slightly in Seaside and Marina, while values decrease in Monterey, Pacific Grove and Carmel/Pebble Beach. The key is lending, which is far easier on the lower end properties. If you are interested in specific neighborhoods, give me a call and I'll show you what is happening now.

I guess I shouldnt have been so general in saying the Monterey area. Most of my experiance and info is based on single family home sales in Seaside. Most if not all bank owned or short sale.What I see and what Ive also delt with is a lot of multiple offers and homes selling for over asking price. Example, home lists at say $310,000, gets 6+ offers and sells for $350,000. Now after seeing this happen over and over,myabe $10K,20K,30K+ over asking price, why not just list comparable homes at $340,000.Instead I see comps listing for maybe $290,000 or so.

There might be more to it but that how it looks to me.

The market it broken.

Used to be a first-time buyer would pick up a low end home. Previous owners of that home would take the equity in the sale and 'move up' towards the higher end stuff.

That's not happening anymore. A lot of what's selling is bank-owned/short sale. Zero equity comes out of the sale. So now a first-time buyer buys a lower-end home and the previous owner has zero equity from sale -- and probably can't buy a home for two to five years if they even wanted to. That stifles median to higher-end properties, where the previous homeowner would have gone. Many in that category who want to sell simply don't (for as long as they can). Those who have move to must lower price to sell. Hence, downward pressure on prices.

The vicious part of the cycle is the self-fulfilling aspect. The further prices go down, the more people go upside down on their mortgages. Upside-down mortgage = MUCH greater odds of eventual foreclosure. High foreclosure inventory = downward pressure on prices... and the cycle continues.

So far drops have been focused on the low to mid-tier regions/neighborhoods. But the impact of the destruction of these markets is slowly moving it's way towards the high-end regions. That's when things get real bad, and is why you see the government desperately trying to keep the Ponzi scheme afloat.

Seaside, Curt Abramson from Bailey Properties here. Although we've seen sales activity pick up substantially in the past couple of months, it's primarily due to the fact that prices have dropped to the point that buyers have become interested again. It's important to remember that a seller can ask whatever price they want, but it isn't a sale until a buyer and the seller agree on price and terms.

There are also significant differences from one area to the next. Monterey and Pacific Grove have averaged over 250 single family homes on the market for the past 4-5 months, selling about 25 a month, and an unsold inventory index of 10-12 months during that timeframe. Seaside has had less than 100 homes on the market, and has been selling almost 30 a month on average, with an unsold inventory index of less than 4 months during the same timeframe. When the unsold inventory index is low, that reflects high demand, and you may expect prices to start rising.

Of course, the difference between the 2 areas mentioned above? Price. Monterey/PG average sold price is close to a million dollars, Seaside about 1/3 of that. Buyers are active in the lower end of the market.

If you'd like more detailed info about the area, you can contact me via my website, noted below. Hope this info helps with your planning.

Sea -

With a quick glance at stats:

1.) For condos/thomes/single family residence October 07 compared to October 08 there has been a 40% drop in average sales price.

2.) The low point appears to have been in July with the average sales price at $324,000. Since July, average sales price has climbed $366,000 (up 12%)

3.) Total Sales Volume has been climbing on average and days on market fairly flat for the last several months.

A local agent will be able to give you more details.

CJ