From nearly 20 years of observing the California market, it seems that coastal cities like Monterey, where supply is inherently limited, tend to have prices influenced more by scarcity than by interest rate cycles. This discrepancy becomes even more pronounced when including areas near Pebble Beach and Carmel. The presence of tourism infrastructure such as large resorts, golf courses, and aquariums is also a crucial background for understanding this market.

At the beginning of 2021, the median home price in Monterey was around $950,000. As of 2026, it is estimated to be about $1.31 million, indicating a cumulative increase of approximately 38% over five years. Considering that the national average during the same period is around 35-40%, it appears that Monterey has shown trends similar to or slightly above the national average. The price gap between properties with ocean views and those without has also widened during this time.

Looking at the yearly trends, from 2021 to 2022, there was a sharp price increase due to a surge in demand from people looking to move out of the city, driven by the rise of remote work. After interest rate hikes in the second half of 2022, transaction volumes noticeably decreased, but due to the already limited supply, the price drop was more restrained compared to other areas. A gradual upward trend has been observed again since 2024. Notably, there is still a seasonal pattern where transactions peak around the May car auction event and golf tournament season.

The key factors supporting Monterey's market include its coastal location, strict development regulations leading to limited new supply, and demand from retirees and vacation home buyers. Given the area's economic characteristics tied to tourism, there is also a steady demand for investment aimed at short-term rental income. Local regulations, such as those for coastal erosion prevention and water supply restrictions, are among the factors that slow down new supply.

However, a cautious approach seems necessary for the future market. Since the absolute price level is already high, sensitivity to changes in interest rates may be greater than in other areas, and the potential impact of fluctuations in the tourism economy on the local economy should also be considered.

For Korean households, Monterey is often viewed more as a vacation home or retirement destination rather than a primary residence. If considering a purchase, the limited market supply suggests long-term price stability, but given the high initial entry costs, it is advisable to plan finances comfortably. If managing a second home is challenging, it is wise to factor in management company costs in advance.

Nationally, tourist and retirement cities like Monterey, which have inherently limited supply, tend to show price increases that are generally similar to or slightly above the national average. In contrast, emerging cities in the Sun Belt with active new land supply have shown much steeper price increases, which can be attributed to differences in supply elasticity.

Mortgage rates are also a consideration. In the Monterey market, where the median price exceeds one million dollars, even a one percentage point change in interest rates can significantly affect monthly payments. Although recent trends show a gradual decrease in rates, it seems prudent to calculate repayment capacity generously due to the high absolute prices in this market.

Based on long-term observations of this area's market, Monterey appears to be a market that shows steady trends rather than sharp fluctuations. Approaching it from a long-term holding perspective rather than seeking short-term profits seems to be a more suitable strategy for this area's characteristics. If weighing the timing of a purchase, paying attention to properties that come on the market during the off-peak tourist season can also aid in negotiations.