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Monterey, CA Homes for Sale & Real Estate

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Monterey is the incorporated city on the north side of the Monterey Peninsula, where the peninsula meets the southern curve of Monterey Bay, between Pacific Grove, Seaside and Del Rey Oaks. Three local facts shape a Monterey purchase more than price: California American Water cannot serve new or intensified use from the Carmel River under a 2009 State Water Board order, the city bars rentals of under 30 days in its residential districts, and the only transfer tax on a sale is Monterey County’s $1.10 per $1,000.

The city covers 8.65 square miles of land (2020 Census) and was California’s capital under Spanish, Mexican and U.S. military rule, according to California State Parks. This guide covers the neighborhoods as the city names them, the housing stock, the coastal rules, the water situation with dated status, short-term rental and rental rules, hazards, closing costs and what a seller should prepare.

Monterey homes for sale

Monterey market report

Where Monterey sits and the neighborhoods the city names

Monterey runs from the harbor, Fisherman’s Wharf and Cannery Row on the bay up into forested hills on the south side of town. Pacific Grove adjoins it to the northwest, Seaside and Del Rey Oaks to the east, and Pebble Beach and Carmel lie over the hills to the south. Highway 1 passes through the city, and Highway 68 runs inland toward Salinas.

The city’s Neighborhoods and Housing page lists 15 neighborhoods and associations, and its Neighborhood & Community Improvement Program publishes a boundary map for them:

Aguajito Oaks
Alta Mesa
Casanova Oak Knoll
Del Monte Beach
Del Monte Grove/Laguna Grande
Deer Flats
Downtown
Fisherman’s Flats
Glenwood
Monterey Vista
New Monterey
Oak Grove
Old Town
Skyline Forest
Villa Del Monte

A Monterey mailing address does not by itself prove a parcel is inside city limits. Check the jurisdiction on the county assessor record before relying on any city rule below. If the parcel turns out to be outside the city, county planning rules apply instead; our guide to unincorporated Monterey County covers that side of the line.

For neighboring cities, see our pages on Pacific Grove homes and rules, Seaside and Carmel-by-the-Sea. Each has its own planning department, and the peninsula’s water constraints apply across all of them.

Housing stock: adobes to postwar apartments

Monterey’s oldest buildings are the adobes and other structures of Monterey State Historic Park, which California State Parks dates between 1827 and 1847, the Mexican and early American eras. The Custom House is the oldest government building in California and State Historical Landmark No. 1. Privately owned homes near the historic core can carry historic-resource review on exterior changes, so ask the city’s planning staff before you plan a remodel.

The city’s 2015–2023 Housing Element, citing the city’s historic surveys, says most R-3 zoned land developed with single-family homes is in Downtown and New Monterey. The same document notes that a large share of the rental stock was built to house military personnel, and it counts the Defense Language Institute and the Naval Postgraduate School among the largest local employers. It also records condominium conversions between 2008 and 2014.

Monterey is a renter-majority city. The 2010 Census counted 4,360 owner-occupied and 7,824 renter-occupied households, and the Census Bureau’s 2020–2024 survey puts the owner-occupied rate at 36.2%.

Measure (City of Monterey)	Figure	Period and source
Owner-occupied housing unit rate	36.2%	2020–2024, Census ACS
Median value, owner-occupied homes	$1,076,300	2020–2024, Census ACS
Median monthly owner costs with a mortgage	$3,137	2020–2024, Census ACS
Median monthly owner costs without a mortgage	$793	2020–2024, Census ACS
Median gross rent	$2,353 a month	2020–2024, Census ACS
Mean travel time to work	18.5 minutes	2020–2024, Census ACS
Land area	8.65 square miles	2020 Census

The survey median value is a five-year blend of owner estimates, not a sale price. For pricing, use recent closed sales of the same property type in the same neighborhood. In practice a Monterey search turns up three broad groups: older cottages and bungalows on small lots near downtown and New Monterey, condominiums and small apartment buildings, and larger houses on wooded or view lots in the hill neighborhoods.

The Coastal Zone and Monterey’s Local Coastal Program

Much of Monterey’s waterfront, from Cannery Row through the harbor to Del Monte Beach, lies in the California Coastal Zone. A project there can need a coastal development permit as well as city approvals. The city’s Local Coastal Program page explains where the planning stands.

In the 1980s the city split its coastal area into five subareas and wrote a land use plan for each: Cannery Row, Harbor, Del Monte Beach, Skyline and Laguna Grande.
The Coastal Commission certified every one of those plans except Laguna Grande.
An implementation plan, the zoning half of a full program, was never prepared.
With a $250,000 grant from the Coastal Commission and the Ocean Protection Council, the city has been drafting a single consolidated land use plan and an implementation plan for council adoption and Commission certification.

The city’s posted timeline is out of date: it aimed to finish in spring 2017, then to start formal review by summer 2022. We found no certification date as of October 2026. Until the program is certified, ask both the city and the Coastal Commission’s Central Coast District office which agency issues the coastal permit for a specific project.

Water: Cal Am, the cease-and-desist order and Pure Water Monterey

California American Water (Cal Am) supplies Monterey, and the Monterey Peninsula Water Management District (MPWMD) sets local water rules. Supply has been limited for decades because Cal Am drew more from the Carmel River than its water rights allow. The table puts the key decisions in date order.

Date	Event	Source
October 20, 2009	State Water Board adopts Order WR 2009-0060, a cease-and-desist order on unlawful Carmel River diversions; Condition 2 bars new service connections and increased use from a zoning or use change	State Water Board hearing notice, 2026
2016	Order WR 2016-0016 amends the 2009 order and sets December 31, 2021 to end all unlawful diversions	State Water Board hearing notice, 2026
2018	CPUC Decision 18-09-017 approves Cal Am’s Monterey Peninsula Water Supply Project, including a 6.4 million-gallon-per-day desalination plant	CPUC D.25-08-006 (summarizing the earlier decision)
September 2020	Pure Water Monterey, a purified recycled water project, starts deliveries to retail customers	MPWMD milestones
2022	Pure Water Monterey reaches its initial goal of 3,500 acre-feet a year	MPWMD milestones
August 14, 2025	CPUC Decision 25-08-006 adopts 2050 demand of 13,732 acre-feet a year and a firm supply of 11,114 acre-feet a year	CPUC
October 2025	MPWMD reports the Pure Water Monterey expansion complete; the CPUC’s 2025 decision counts it at 2,250 acre-feet a year, and the project engineer, Kennedy Jenks, dates the ribbon-cutting to October 2, 2025	MPWMD; CPUC D.25-08-006; Kennedy Jenks
October 21, 2025	MPWMD applies to the State Water Board to rescind Condition 2, with a trigger to reinstate it if Cal Am’s diversions exceed 3,376 acre-feet in a water year	State Water Board hearing notice, 2026
November 5 and 10, 2026	Public comment hearing, then closing briefs due, under the schedule amended July 9, 2026	State Water Board hearing notice, 2026

What the order means for a buyer today

As of October 24, 2026, the hearing on MPWMD’s request was still ahead, so Condition 2 remains part of the order. Under it, Cal Am may not divert Carmel River water for new service connections, except those with approvals obtained before October 20, 2009.

The condition also bars increased use at an existing address from a change of zoning or use. Check the State Water Board’s Cal-Am page for any ruling after the November 2026 hearing.

For a buyer, an existing house with an active meter can keep its current use. A plan to add a unit, convert a building or change use is a different question. Before you remove contingencies on such a plan, ask MPWMD and the city what water entitlement the parcel has and what permit the project would need; our Monterey County water and property plans guide lists the questions to ask.

Desalination status

The CPUC’s August 2025 decision set supply and demand estimates only; it did not approve or reject the desalination plant. It also declined to lower the demand forecast for the higher cost of desalinated water that the City of Marina raised.

The adopted 2050 demand of 13,732 acre-feet a year is 2,618 more than the adopted firm supply. We found no source showing the plant under construction or in operation as of October 2026, so treat any timeline you hear as unconfirmed.

Short-term rentals and rental rules

Monterey does not allow short-term residential rentals in its residential districts. When the city council adopted Ordinance 3564 on March 7, 2017, its findings said that since 1991 the city has prohibited short-term residential rentals, meaning lodging for transient guests for less than a calendar month or less than 30 consecutive days, in all residential districts.

That ordinance added City Code section 22-19.5, which bars owners, tenants and their agents from advertising a prohibited short-term rental. Each day an ad stays up counts as a separate offense.

A buyer who expects vacation-rental income from a Monterey house or condo should assume it is not available in a residential district. Commercial and visitor-serving zones follow different rules, so ask the city before relying on any rental use outside residential zoning.

Long-term rentals have their own requirements. Chapter 8, Article 2 of the City Code, the Rental Inventory (Ordinance 3671, 2023), requires owners to register rental units and report information to the city each year. Its fees fund mediation, legal referrals and education, and the article does not set a rent cap or local eviction rules.

Covered rentals fall under the state Tenant Protection Act (AB 1482). The California Attorney General lists 8.6% as the maximum increase for Monterey County increases taking effect August 1, 2026 through July 31, 2027, up from 7.7% for the year before. Our AB 1482 guide for landlords explains which units are exempt.

This is general information, not legal advice. Before buying or renting out a Monterey unit, check its rental status with a California landlord-tenant attorney.

Earthquake, tsunami, fire and flood hazards

Sellers of most California homes report mapped hazards on the Natural Hazard Disclosure Statement, and the report a seller orders from a disclosure company is the place to start. Our natural hazard disclosure report guide explains how to read it.

Earthquake zones. The California Geological Survey’s EQ Zapp map shows whether a parcel is in a mapped fault rupture, liquefaction or earthquake-induced landslide zone. It also tells you when CGS has not yet evaluated an area, which is different from “no hazard”. Our earthquake fault zones guide covers what a zone means for building.
Tsunami. CGS publishes Monterey County tsunami hazard area maps with the Governor’s Office of Emergency Services. Low-lying parcels near the harbor, Cannery Row and Del Monte Beach are the ones to look up.
Fire hazard severity zones. CAL FIRE’s State Responsibility Area maps took effect April 1, 2024, and its Local Responsibility Area maps for cities came out in four phases between February 10 and March 24, 2025. Inside the city, CAL FIRE directs owners to the local jurisdiction, so confirm the zone with the city for wooded hill neighborhoods before you price insurance.
Flood. Look up the parcel on FEMA’s Flood Map Service Center and ask your lender early whether flood insurance will be required.

Transfer tax and point-of-sale requirements

Cost or rule	Monterey figure	Customary payer
County documentary transfer tax	$1.10 per $1,000 of value	Seller (Ticor 2026 guide)
City transfer tax	None listed for the City of Monterey	Not applicable
Escrow fee	Varies by escrow company	Split between buyer and seller
Owner’s title policy	Varies with price	Seller
MPWMD retrofit certification (Rule 144)	Low water use fixtures before any change of ownership	Selling owner or agent certifies

On a $1,000,000 sale the county tax is $1,100. Ticor Title’s 2026 guide lists no city transfer tax anywhere in Monterey County, and it notes that payment terms are negotiable, so put the split in the purchase agreement. Our California transfer tax overview covers exemptions.

MPWMD Rule 144: the water fixture retrofit at sale

MPWMD Rule 144 requires every plumbing fixture in an existing structure to meet the district’s low water use standards at a change of ownership. The selling owner or an authorized agent must certify compliance before the sale.

Certification can come from a district-certified inspection report, documentation from a district-certified building official, or an owner certification with dated receipts for each fixture.

The rule makes it a violation for a buyer or seller to tell escrow to close a sale that does not comply, and its retrofit exemptions were deleted in 2017. The General Manager can grant a conditional extension when remodeling will begin within 180 days.

Adding a toilet, or adding floor area equal to 25% or more of the existing building, triggers a retrofit of the whole site. Our guide to California point-of-sale requirements compares this with other local rules.

Selling a home in Monterey

A Monterey sale runs on the same California contract as anywhere else, but water and rental rules shape what buyers ask. Work through these steps before you list:

Confirm the jurisdiction from the parcel record, so buyers know whether city or county rules apply.
Complete the MPWMD retrofit and gather the certification, receipts or inspection report early; it is due before the sale unless the district grants a remodel extension.
Document the water picture. Collect any MPWMD water permits, records of fixture counts and approvals for second units or added bathrooms, since a buyer cannot assume more water is available.
Pull permit history for additions, garage conversions and accessory units, and check whether the property is in the Coastal Zone or near a historic resource.
Order the Natural Hazard Disclosure and complete the state seller disclosures; our seller disclosure guide lists them.
Assemble rental records for any tenant-occupied unit: leases, rent history, AB 1482 notices and the city rental inventory registration.
Price from closed sales of the same property type in the same neighborhood, adjusting for view, lot and condition.

Diamond belongs to C.A.R., NAR and the area MLSs. Beyond the MLS, we reach likely Monterey buyers through our own client database and targeted off-market campaigns, following MLS rules and NAR’s Clear Cooperation policy.

Diamond may refer you to partners we work with; you’re free to choose any provider. Our Monterey County seller services page covers preparation and pricing.

Questions people ask

Is Monterey under a water moratorium?

Under State Water Board Order WR 2009-0060, Cal Am may not divert Carmel River water for new service connections or for increased use from a zoning or use change. MPWMD applied on October 21, 2025 to rescind that condition, and the Board’s public comment hearing is set for November 5, 2026, with closing briefs due November 10. Existing homes keep their current service.

Can I add an ADU or a bathroom to a Monterey house?

It depends on the parcel’s water entitlement and the permits the project needs. Adding a toilet triggers a whole-site fixture retrofit under MPWMD Rule 144, and a new unit raises the connection question under the cease-and-desist order. Ask MPWMD and the city before you count on the addition in your offer price.

Are short-term rentals allowed in Monterey?

Not in residential districts. City findings say stays of less than a calendar month or under 30 consecutive days have been prohibited there since 1991, and City Code section 22-19.5 has barred advertising them since 2017.

Does the City of Monterey have a transfer tax?

No city transfer tax is listed in Ticor Title’s 2026 guide. Sales pay Monterey County’s $1.10 per $1,000, which the seller customarily pays, though the split is negotiable.

What does a seller have to do before closing in Monterey?

Certify that the home’s plumbing fixtures meet MPWMD’s low water use standards under Rule 144, and deliver the state disclosures, including the Natural Hazard Disclosure. Rule 144 makes it a violation for either party to tell escrow to close a sale that does not comply.

Does Monterey have rent control?

We found no city rent cap. The city requires annual registration of rental units under its Rental Inventory ordinance, and covered units fall under AB 1482, with a maximum increase of 8.6% for increases taking effect August 1, 2026 through July 31, 2027.

Is the desalination plant being built?

The CPUC approved the project, including a 6.4 million-gallon-per-day plant, in 2018. Its August 2025 decision set supply and demand figures without approving or rejecting the plant. We found no source showing construction under way as of October 2026.

Is my Monterey property in the Coastal Zone?

Check the city’s coastal zone mapping or ask the planning office. The waterfront from Cannery Row to Del Monte Beach is covered by the city’s coastal land use plans, and a coastal development permit may be needed for exterior work there.

How do I check earthquake, tsunami and fire zones for an address?

Use CGS’s EQ Zapp for fault and seismic hazard zones, CGS’s Monterey County tsunami hazard area map for tsunami, and CAL FIRE’s viewers for fire hazard severity zones, then confirm the fire zone with the city. The seller’s Natural Hazard Disclosure report also lists them.

Which neighborhoods does the city recognize?

The city lists 15: Aguajito Oaks, Alta Mesa, Casanova Oak Knoll, Del Monte Beach, Del Monte Grove/Laguna Grande, Deer Flats, Downtown, Fisherman’s Flats, Glenwood, Monterey Vista, New Monterey, Oak Grove, Old Town, Skyline Forest and Villa Del Monte.

If you are weighing a Monterey home, or a sale where water or rental rules affect value, our Monterey County guide covers the rest of the peninsula and the Salinas Valley. When you want to talk through a specific address, contact Diamond Real Estate Group.

Sources & notes

Last reviewed October 2026 by Matthew Martinez.