If you’ve been wondering why the housing market in Monterey County still feels competitive — even with higher mortgage rates — you’re not alone. Many buyers are asking why inventory remains limited, while sellers are trying to figure out if now is still a good time to make a move. The reality is that today’s market is being shaped by two major factors: limited housing inventory and homeowners staying in their homes longer than they used to. Across California, and especially in desirable coastal communities like Monterey, Pacific Grove, Carmel-by-the-Sea, and Salinas, many homeowners locked in historically low interest rates over the last few years. Because of that, they’re less motivated to sell unless they absolutely need to move. That has created a shortage of available homes for buyers. Why Inventory Still Feels Tight Even though the market has shifted from the frenzy we saw during 2021 and early 2022, inventory in Monterey County is still relatively low compared to historical averages. Many homeowners are holding onto properties because replacing their current mortgage with today’s higher rates can significantly increase monthly payments. Others are choosing to keep homes in the family instead of selling, especially in California where long-term property tax advantages can make inherited homes more valuable to keep than sell. This trend has reduced the number of homes hitting the market, which continues to support home values throughout much of the Central Coast. What This Means for Buyers For buyers, patience and preparation are more important than ever. The good news is that buyers today generally face less competition than they did during the peak pandemic market. Contingencies are becoming more common again, and some sellers are more open to negotiating repairs, credits, or pricing adjustments. However, well-priced homes in desirable neighborhoods still move quickly — especially properties near the coast, move-in-ready homes, and homes in strong school districts. If you’re planning to buy in Monterey County this year, having a solid financing plan and understanding your local market is critical. What This Means for Sellers For sellers, low inventory can still work strongly in your favor. Because there are fewer homes available, properly marketed properties continue attracting serious buyers. Homes that are priced correctly and presented well can still generate strong interest — especially in communities where demand remains steady from both local and out-of-area buyers. The key difference today is that pricing strategy matters more than it did a couple years ago. Buyers are more selective and more sensitive to affordability than they were during the ultra-low interest rate environment. Looking Ahead for Monterey County As we move further into 2026, many experts expect inventory to slowly improve as more homeowners adjust to the current rate environment. That could create more opportunities for buyers while helping the market become more balanced overall. Still, Monterey County remains a highly desirable place to live because of its coastal lifestyle, limited land supply, and long-term property demand. Those factors continue to support the local housing market even during periods of economic uncertainty. Whether you’re considering buying, selling, or simply trying to understand where the market is headed, having a local strategy matters more than ever. If you’d like to know how these trends specifically affect your neighborhood or home value, I’d be happy to help.