MONTEREY – The median price of a single-family home in Monterey County was about $660,000 in September, continuing a steady climb to its pre-recession high, due in part to decreasing inventory, low-interest rates, and lower prices relative to Santa Clara, San Mateo and Santa Cruz counties.

“Prices are generally declining slightly outside of Monterey County, where they were up just a bit,” said Elliot Eisenberg, PhD., an MLSListings partner economist.

MLSListings Inc is the Multiple Listing Service (MLS), for Northern California and carries property listings for real estate professionals in Monterey, San Benito, San Mateo, Santa Clara and Santa Cruz counties.

Eisenberg pointed out that the median price in Monterey County is about half of what it is in Santa Clara County where the median price is about $1.23 million and San Mateo County where it is hovering around $1.5 million.

Santa Cruz has a median price of almost $800,000, and San Benito comes in at about $605,000.

According to MLSListing logs, Monterey County had a record median home price of $728,000 in the second quarter of 2007.

“The biggest issue is a lack of inventory,” said Eisenberg of the Monterey County market. “Interest rates are low, which helps, but there are no houses to buy and builders aren’t building.”

In his assessment of Monterey County, Eisenberg said that inventories are down this quarter and have been declining slightly over the past several years. Sales have been declining for a year.

Single-family home inventory for the third quarter of 2019 was 887 in Monterey County compared to 3,296 at its peak in the third quarter of 2007.

“I believe our diminished inventory, in conjunction with a strong economy, play a role in driving the high prices, though sales are down for roughly a year now,” said Kevin Stone, Monterey County Association of Realtors CEO.

Regionally the heady days of bidding wars are largely in the past, but inventories remain limited, so prices are not likely to decline much.

But looking at just the Monterey Peninsula gives a slightly different perspective.

“September was a really good month for sales on the Peninsula, with 26 homes sold in Carmel at a median price of $1,509,000, 17 homes sold in Pacific Grove at a median price of $870,000, 12 homes selling in Monterey at a median price of $1,114,432 and 12 homes in Pebble Beach with a median price of $2,092,500. That is 67 (single-family) homes that sold in September, which is equal to what sold in Salinas,” said Mark Bruno, Keller Williams realtor. “I believe that is the reason you are seeing a large jump in the median price for September.”

Bruno explained that as prices rose over an unprecedented eight-year period, the number of lower-priced homes became less available throughout the county.

“This means there will be less sales in the lower price ranges and even if the higher-end portion of the market remains flat, the median prices will go up. This is what we saw statistically at the end of the last upward cycle, where the stats were showing the market prices were continuing to increase as the sales started to drop off,” said Bruno.

The realtor said he believes the market is shifting where price increases will cool off, making the market more balanced.

“I don’t believe home values are going to go backward. They are more likely to stabilize and we will see healthier growth in the 2-5% range for the next several years,” said Bruno. “With that said, there are still pockets that are hot and Monterey County continues to be a good value when compared to many of our neighbors to the north.”