With 2010 rapidly winding down, the friendly over-under wager on whether or not we will see more residential closings this year than we did last is very much in question. Last year there were 892 sold and as of now there have been 841 for 2010. However there are 125 residential listings in escrow. Will we see 53 more of these close prior to 12/31/2010? We shall see. More to the point with respect to the real estate market in Big Bear: the absorption rate of 18% (pending of 125/active of 697), sends a strong message that demand is more than keeping up with current supply. For most of this year we have been used to seeing a 10% - 12% absorption rate, meaning that if no new listings hit the market, it would theoretically take 10 to 12 months to sell what is active. Over the last few months, the supply of inventory has dropped to five to six months.
What is the overall state of the Big Bear real estate market? In looking at residential sales in November of this year versus last, transactions are flat under $250k, which to date in 2010 has been where most of the money has changed hands. However, the market between $250k and $500k saw an increase of 9%. So, the trend of demand continuing to spread into higher price ranges, which speaks well of the overall confidence of those willing and able, remained intact. This does not surprise me as many of the ‘deals’ that exist in our market have gradually shifted as well. Will that eventually carry into the market above $500k? When looking at the numbers, the market between $500k and $750k still remains the softest with respect to days on market (266 in the $500 – $750 price range versus 122 overall) and list-to-sale price ratio (94% in that price range versus 96% overall).
My feeling is twofold: it is apparent to me that the upper end is continuing to slide as compared to the healthy stabilization and even small increase in prices that we have seen under $250k. I think that shift is far from done and more and more sellers, who have thus far been able to ride out the market, will actually have to cut bait and sell, leading to many more competitively priced homes in the upper price ranges in 2011.
In addition, I think this will be the year that banks make a big effort to clean up their balance sheets and move forward. Meaning all the attempts, many would say halfhearted, at loan modifications and short sales will take a back seat and the banks will focus more on listing and selling what they own. To accomplish this, like any seller looking to achieve this result in the current market, they will need to price aggressively. With respect to bank-owned properties in Big Bear, I am very well organized to keep you informed on what is coming to market. So let me know if you are interested in receiving information on these opportunities prior to them being publicly listed. This provides a distinct advantage over other buyers in the market. Keep in mind that we have access to all that is for sale in Big Bear. We are here, happy to help, and look forward to hearing from you. All the best to you and yours this Holiday Season! Let it Snow!