As winter transitioned into spring and the longer sunlit days of early summer, the Monterey Peninsula real estate market entered its active selling season. The second quarter traditionally brings heightened energy to the market, and the early part of the quarter delivered, driven by fresh inventory, strong buyer interest, and the unmistakable allure of life along the Monterey Peninsula's iconic coastline. However, the momentum briefly paused as global economic uncertainty—sparked by newly announced tariffs and a sharp dip in the stock market—led to a temporary slowdown in transactions. Still, the resilience of the market quickly reasserted itself. By June, activity picked up once again, closing out the quarter with strength and signaling renewed confidence as we head into the heart of the summer season.
The Monterey Peninsula's real estate market experienced a strong start to 2025. The overall market saw a 14.6% increase in home sales this quarter versus Q1 of last year. In addition, a small 4.9% increase in average sales price led to a 19.7% rise in total sales dollar volume when compared to last year. During Q1, Pebble Beach saw a surge in the entry market, experiencing 15 home sales under $3M. While Carmel-by-the-Sea was a bit slower than usual in Q1, the Carmel Highlands area saw four strong sales during the quarter and added eleven active listings. Though higher-priced homes across the market continued to sell slower than usual in Q1, during the first few days of April our company represented three sides on two amazing sales in Carmel. One sale just off Scenic Road sold for $13M and another on the beach in Carmel sold for $17.5M.
It was a great holiday season on the Monterey Peninsula with locals, second homeowners, and visitors enjoying the beautiful landscapes, inspiring outdoor activities, and bustling restaurants and shops our area has to offer. Beginning in the summer and extending into Thanksgiving, Christmas and New Years, town was busy, vibrant and festive, an indicator that the Monterey Peninsula community is very healthy alongside a healthy real estate market. The Monterey Peninsula real estate market experienced a strong and resilient performance in 2024, demonstrating overall health despite a notable slowdown at key price points of the business. Throughout the year, and certainly closer to the Q4 presidential election, the market experienced a slowing of both inventory and demand. Our company heard from several prospective buyers that they had decided to wait until after the election before making a real estate decision. This clearly had an impact on the number of sales to end the year, but even with this influence, the overall market saw an 8.4% increase in home sales year over year and a small increase in average sales price, leading to a 9.7% rise in total sales dollar volume in 2024 over 2023.
As the Monterey Peninsula's Indian summer brings sunshine and warmer temperatures across the region, the real estate market is also experiencing an enjoyable period. After a spike in activity during the second quarter, the market experienced another well-performing quarter during Q3. This means we have seen six consecutive months of good activity and sales volume in our market, following a slower sales cycle over the prior 18 months. In addition, there is also promise for a third strong quarter ahead as September saw 115 homes go into escrow, the most of any month since May 2022. Inventory also closed the quarter with 379 active listings, over one hundred more than the same time last year, and the most we have seen on the Peninsula since the summer of 2020.
We have great news to report in the real estate market on the Monterey Peninsula. In the second quarter of the year, we saw the number of sales increase, sales volume increase, average sale prices increase, inventory increase and days on market decrease. Clearly, in this quarter the rain clouds lifted from above the Monterey Peninsula and so did the slow start to the year. Looking back at Q1, January and February gave some of the quietest months we have seen in years. March started a measurable recovery in both new listings and sales. This surge continued throughout the second quarter across the entire Peninsula resulting in three of the busiest months in real estate over the last two years. The sun is now shining, town is busy, and summer is in full swing.
Much like the close of 2023, the Monterey Peninsula's real estate market had a sleepy start to 2024. The typical rainy and windy weather conditions throughout the opening months of the year paired with continued economic pressure on both the entry level and luxury ends of the market led to a slow first two months of the year. The entry level market remained uneasy due to lingering elevated interest rates. The higher end of the market stayed slow over the winter months due to macro-economic uncertainty, geopolitical concerns, and other distractions that kept most affluent buyers on the sidelines. Luckily, as we moved into March, we felt a surge of activity. After 91 new listings in January and 98 more in February, March saw 152 new listings come to market. This was the highest number of new listings we have seen come on the market in one calendar month since June of 2022.
The Monterey Peninsula was bustling this holiday season. Town was busy, shops and restaurants were full, and the outdoor lifestyle was in full swing for both the Thanksgiving and Christmas holiday weeks. The rest of the quarter was a bit quieter, as was the real estate market. Across the entire Peninsula, Q4 was down just slightly from the same quarter last year. For the entire year, 2023 experienced a meaningful reduction in the number of homes sold and in total dollar volume compared to 2022.
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