MONTEREY >> In May, the median cost for a single-family home in Monterey County was $897,000, compared to $1,022,500 a year ago, according to MLSListings, a 12% decrease in the local housing market.

With a 30-year-fixed mortgage rate currently hovering around 6.75%, Monterey County homes sat on the market about 17 days — up 55% from May 2024 — before selling for 99% of the list price. Those figures were based on 137 closed sales — down 22% from last year — from an inventory of 544 homes reflecting an increase of 22% year-over-year.

As combination of factors helped contribute to the median price drop in the county.

“Interest rates have not dropped as much or as quickly as some would like, leading many to put off buying a home,” said Adam Pinterits, government and community affairs director for the Monterey County Association of Realtors. “Fewer qualified buyers combined with sellers on a timeline often contributes to decisions about price reductions. Even qualified buyers are often proving to be pickier than buyers a few years ago.”The median income level in Monterey County is $104,500 says the California Department of Housing and Community Development. According to U.S. Bank, a standard rule for lenders is that 28% or less of monthly gross income should go toward a monthly mortgage payment. The means about $2,400 per month for this amount, which could only afford median income level people in Monterey County about a $340,000 home.

But as the number of houses in the Monterey County market have increased, and interest rates remain between 6-7%, new listings and closed sales trended down.

“The relative improvement to inventory suggests a shift in seller attitudes,” said Pinterits. “Whereas a year or two ago a seller who bought or refinanced with lower interest rates could not imagine selling when the rate on their next home would be doubled. Now, more are adjusting for the fact that rates are not likely to go down much further in the foreseeable future. Some buyers are starting to catch on too and getting off the sidelines.”

Pinterits said that inventory is cumulative, especially with the average days on market growing compared to a few years ago and added that new listings at any given time tend to fluctuate more from year to year.

“The dip in closed sales is an indicator of the pickier outlook of many buyers,” he said. “It is more of a buyers market now than a few years ago, when the median price was higher, rates were so low that many buyers were competing for a few listings, and even fixer-uppers were getting offers above asking price.”

Monterey County continues to be more affordable compared to counties to the north. Santa Cruz County’s median home price is $1,340,000, Santa Clara County’s is $2,162,500 and San Mateo County’s is $2,059,400, but San Benito County to the east has a slightly lower median home price at $839,000.

“Despite the increase in homes for sale, Monterey County is still inventory constrained compared to other regions,” said Pinterits. “While transactions generally have slowed, there are still a lot of opportunities for buyers and sellers to find their match and make a good deal.”

The median price for a condominium or townhouse in Monterey County also decreased year-over-year by 2% from $690,000 last May to $677,500 in May 2025. Inventory increased 37%, closed sales decreased 55%, days on the market increased 71%, and new listings fell 15%.