The shift from offices to working from home may be one of the greatest legacies of the Covid-19 pandemic for Monterey County. After coming to a near standstill in March, the residential market began rebounding in June, and July is experiencing a surge of homebuyers from urban areas looking for more home space for work and schooling and access to the coastline and nature.
“We’re absolutely seeing a significant increase from out-of-city buyers, predominantly San Francisco, but also Los Angeles and other markets, where people are looking for a quieter pace of life,” says Dan Lynch, CEO of Carmel Realty Company and Monterey Coast Realty. He estimates about 60 percent of the interest is coming from out of the county.
Recently, Pebble Beach and Carmel Valley got national press as places where tech workers were looking to buy, but Lynch says that more mid-range markets like Pacific Grove, Marina, Seaside and Monterey are “incredibly hot” with a big demand, coupled with enough inventory to meet it. He says there’s a lot of interest in new communities like East Garrison (near Salinas) and The Dunes and Sea Haven in Marina, where homes are in the $750,000 to $1 million range, which is less than Silicon Valley prices.
July home sales are in a bit of a “frenzy” Lynch says, but a few months ago they were near nil, after shelter-in-place orders went into effect. In May, transactions were down 95 percent. At first, agents couldn’t show homes, then they couldn’t show homes that were furnished. Today they can, with strict protocols in place. With open houses out of the question, companies are depending more on digital marketing.
Home prices remain strong, Lynch says, but they’re not surging upward thanks to enough inventory to meet the demand. He believes the influx of families from other areas will contribute to the county’s ability to rebound after the pandemic. “We couldn’t be happier because of the quality of families who are moving in,” he says, adding they will be enrolling in local schools, shopping locally and contributing to nonprofits.
Commercial real estate seems mixed compared to residential. While industrial and office properties are performing well despite the pandemic, restaurants and retail appear to be struggling. Greg Findley, managing director of the Cushman & Wakefield Salinas office, says they’re seeing an uptick in the need for industrial properties in the Salinas Valley. Thanks to the Paycheck Protection Program and Small Business Administration loans under the CARES Act, companies in the industrial and office sectors have for the most part been able to pay their rents and keep employees.
“In the Salinas Valley, the office market was very tight going into the pandemic and appears to be holding its own,” Findley says.
There have been more requests for rent deferrals from restaurants and retail businesses. While some restaurants have been able to shift to take-out and outdoor seating, others have struggled. Some restaurants and retail businesses won’t survive, but Findley says it’s too early to tell: “We won’t know what it’s going to look like until we’re on the backside of this pandemic. We don’t know ultimately how many will survive.”