Let us get caught up on the happenings in the Big Bear real estate market as we roll into the summer ‘selling’ season. Here in Big Bear it seems we have altogether skipped spring and gone straight into summer. On Sunday a couple weeks ago it snowed most of the day and now it is mid-eighty degrees and beautiful. At last!
Looking at the Latest Market Statistics
When looking at the latest numbers a couple of trends are apparent: On the supply side the inventory is growing rapidly, which is quite typical this time of year. A month ago we were hanging around 650 residential listings whereas now there are 775. As a buyer this is great news as there are many more options to choose from. If you are on my update list you will have noticed that you are receiving more email alerts from me than normal lately, as there have been some incredible deals pop up in the last week. (If you would like to receive these emails on the amazing deals as they hit the market, just let me know.)
So, with more great opportunities available, are more buyers writing offers? I expect that to be the case in the coming months but as of now the increase in supply has outpaced demand. There are 124 pending sales (homes in escrow). Compared to the current 775 listings, the absorption rate has fallen from a steady 10-11% to 6.25%. In terms of closed sales, the Big Bear real estate market took a bit of a breather in May. The total number of closed sales for May dropped off 6% from what closed in April. However, in the under-$250k price range, the total homes sold rose 7%, as that price range remains very competitive. Bank-owned listings currently make up 7% of the active inventory, 30% of what is pending and 42% of the closed sales for May. A big question remains as to how many new bank-owned listings we will see hit the market this summer. I expect the percentages above to hold steady but the competition for these properties amongst buyers to increase.
Looking at Short Sales
Short sales are continuing to catch the attention of interested buyers and I thought I would wrap up this month’s report by elaborating on this topic. A short sale occurs when a property is listed for less than what is currently owed. For example if a property is listed for sale at $200k but there is a loan of $250k, this will require the lender to approve taking a ‘short’ payment in order to release the lien so the property can be transferred.
There are a couple of key points to understand when looking at this type of property:
- The house is still owned by the seller, not by the bank.
- The seller will take no money out of the sale and as such, really is not invested in what it sells for, just that it actually does sell so that they can avoid a foreclosure.
- The lender has nothing to do with determining what price the property is listed for and will not generally indicate, without completing their process which they need an offer to begin, what price they might be willing to approve.
- The banks will normally take four to six months to respond with a decision, so there is nothing ‘short’ about the process from the buyer’s perspective. This can be frustrating if you do not know what to expect going in.
The question most buyers have, when contemplating short sales, is how likely is it, if we are patient and wait the four to six months, that we can actually close the deal and buy the house?
There are a couple of key factors that greatly determine the probability of success in short sales. Contact me for information on those factors if you are interested in this type of property.
But let’s look at what the numbers in the Big Bear real estate market tell us: Going back 12 months from the end of May there have been 548 short sales listed.
- Of those, 25% have closed, those are your basic odds of achieving the desired result.
- 6% of those are in escrow now,
- 16% are active listings and
- 53% have failed.
Much of what occurs in the short sale process is not logical so contact me for the insight necessary to make sense of it all. Until next time -- Happy Hunting!