Why Nobody Is Selling in Monterey, CA: Mortgage Rates & Prop 13 Explained

If you have been watching listings across Monterey, Pacific Grove, Carmel-by-the-Sea, or Carmel Valley, you have probably noticed a striking pattern: plenty of buyers are actively searching, yet remarkably few homeowners are putting their properties on the market.

In the video above, I break down the two biggest financial mechanics behind Monterey County’s historically low inventory — and how both buyers and sellers can plan around them.

1. The “Golden Handcuffs” of Locked-In Mortgage Rates

Many Monterey Peninsula homeowners purchased or refinanced when 30-year fixed mortgage rates sat between 2.75% and 3.5%. Trading a sub-3.5% mortgage for a new loan at today’s prevailing rates means a significantly higher monthly payment even on a similarly priced property. Unless a homeowner has a compelling life transition — such as a relocation, retirement downsizing, or estate settlement — many choose to hold onto their existing financing.

2. California’s Proposition 13 Property Tax Base

Under California’s Proposition 13, a home’s assessed property tax value is based on its purchase price plus modest annual inflation adjustments capped at no more than 2% per year. Longtime Peninsula homeowners often pay property taxes based on an assessed value from decades ago.

What many homeowners don’t realize is that California Proposition 19 allows eligible homeowners who are 55 or older, severely disabled, or victims of wildfire/natural disasters to transfer their existing Prop 13 taxable value base to a replacement primary residence anywhere in California (subject to state rules and filing deadlines). Always consult the Monterey County Assessor or a qualified California tax professional to see how Prop 19 applies to your specific situation.

What This Means for Buyers and Sellers

• For Buyers: Because fewer homes come to market each month, preparation matters. Having full lender underwriting, knowing which micro-neighborhoods fit your daily routine, and tracking coming-soon inventory gives you a clear edge when the right property appears.
• For Sellers: Low inventory means serious buyers have fewer alternatives. When your home is priced accurately, prepared with upfront California disclosures, and marketed with editorial video, it stands out immediately.