Vacation destinations have seen their markets soar as professionals can now work and live where they previously only vacationed. Once reserved as a holiday locale, the Monterey Peninsula is now being considered a co-primary residence, with people splitting their time between the coast and their other home. So, 2022 is making its entrance loud and clear.

The Agency spoke with Braden Sterling, Principal at Sterling-Huddleson Architecture and Managing Director of The Agency Carmel, about the state of affairs along the Monterey Peninsula. Read his insights below.

To the Fairways We Go

There has always been a draw to the spacious living and golf properties of the Monterey Peninsula, and I consider myself one of a lucky few who have seized the opportunity to live, play and work on the Peninsula without sacrificing the ability to run a business. But Carmel’s secret is out! And this local allure has inspired the influx of people seeking the same: Resort-style recreation in the comfort of home.

Community Resources & Construction

The result? A surge of buyers desperately bidding up the prices of properties. A new premium has been set on ocean and golf-side living, along with new standards of in-home amenities and the desire to be within proximity to outdoor hiking, resorts, wineries, beaches, and prestigious events.

This demand is raising the property values far beyond what an average buyer can afford, making the area unaffordable for many who are necessary contributors to maintaining a balanced, well-rounded community. The tangible effects on those who make their living servicing the community and the tradespeople who construct these beautiful properties could be devastating. Plus, the inevitable increased traffic, longer lines at the grocery store and inability to book your favorite table at the local restaurant also present clear challenges.

The disruption in the real estate and construction industries is further fueled by a lack of real estate inventory and backlogs in construction supply, commodity pricing, and the difficulties of obtaining the necessary approvals for construction. It’s simple: We don’t have enough homes or the resources to build homes to satisfy the demand. These disruptions and the related rising construction costs are critical variables for us as residents and those who are considering relocating to the Peninsula.

A Breath of Fresh Air

As we see the demand to invest in larger homes outside of the city and the resulting strain on the real estate and construction industries, we must be aware of the lasting effect on our community and our daily lives. As a community primarily occupied by retirees and second homeowners, we are now seeing a shift in this demographic, with younger professionals relocating and working virtually.

After nearly a decade of looking through my office window onto the courtyard of San Carlos Square in Carmel-by-the-Sea, I have witnessed neighboring businesses come and go, mostly struggling to find their audience and interest in their goods. Our community, which has been largely supported by seasonal tourism, is now becoming busy year-round. The courtyard is filled with young families and children, a variety of age groups, and individuals who help stabilize our seasonal economics while bringing new personalities and perspectives to our community.

Despite the challenges of real estate and construction, there’s a lot to look forward to with this evolution, including the revitalization of our restaurants, farmers’ markets, and the city in general with new energy. I believe this is something to be celebrated, a positive stemming from the shifting market of the last two years.

So, what’s next?

Well, we have the opportunity to embrace growth in our community and welcome new neighbors all the while remaining aware and actively supporting fellow community members to shepherd the change in an intentional way. The future of our community is bright, and the evolution of the Peninsula is just as exciting as it is inevitable. I look forward to what’s next for our beautiful, flourishing community.