The Monterey Peninsula market is sending mixed signals in early 2026 — not because demand is weak, but because buyers are behaving very differently across price points. Some homes are flying off the shelf in days, while others linger for months. The question everyone is asking: Is price point driving the market, or is something deeper at play? The answer is both.
The most active segment right now is the $2.2M–$3.5M range, especially in Pebble Beach, Monterey’s sunbelt, and parts of Pacific Grove. These homes often sell quickly even when they’re dated, undersized, or lacking views. Buyers in this tier are prioritizing location and land over finishes. They’re willing to take on remodels — or full teardowns — if the lot is near the a coveted micro‑neighborhood.
The $3.5M–$5M range is active but more discerning. Homes here need at least one strong value driver — views, proximity to downtown or amentinies, a remodeled interior, or a standout lot. Well‑positioned homes still move quickly. Overpriced or “almost there” listings sit. Buyers in this tier are touring more homes before writing, passing on properties that feel overpriced or compromised, expecting updates or a compelling location premium.
The $5.5M+ market is the slowest right now, and it’s not due to lack of wealth — it’s due to value alignment. Buyers at this level are patient, analytical, and unwilling to pay top dollar unless the property checks nearly every box. When a luxury home is priced correctly, it still sells — but the margin for error is razor thin. True oceanfront or ocean‑view homes. Architecturally significant properties. Rare lots or attractive locations to beach & amenities with opportunity for builds.
So...price point seems to be shaping buyer behavior, but it’s not the only force. Across the Peninsula, three factors consistently determine whether a home sells fast or lingers:
Location: Still the number‑one driver. Micro‑neighborhoods matter more than ever — even the “right” side of the street can shift value dramatically.
Views: A powerful multiplier. Ocean views can override condition, size, and even layout. No‑view homes must rely on land, walkability, or price.
Condition: Important, but flexible. Buyers will overlook outdated interiors if the location is exceptional. They will not overlook a mediocre location, even with a stunning remodel.
From my take, the Monterey Peninsula market is segmented. It’s fast and competitive in the $2M–$3.5M range. It’s selective in the mid‑luxury tier. It’s value‑driven and patient at the top.
Source: MLS Listings Inc
