Thanks for checking in with us regarding the Big Bear real estate market. Winter is in full swing here in Big Bear with lots of snow on the ground and lots of fun to be had on the slopes. With the New Year recently underway, it is a good time to get caught up on what has transpired in our market in 2012 and what the prevalent trends tell us to expect in the year to come.
Dramatic Increase in Properties Sold
For the Big Bear real estate market, 2012 was a very encouraging year. Compared to 2011, we saw an impressive 24.7% increase in the number of residential sales (1,080 in 2012 vs. 865 in 2011). To put that in perspective, we haven’t seen a year with transactions over 1,080 since 2005.
A few interesting facts about those closings:
- Foreclosures made up only 19% of our market, a big decrease from 2009 when they accounted for 35%;
- Short sales accounted for 13%; and
- 2012 saw the return of regular old, run-of-the-mill ‘re-sales’ which accounted for 66.5% of the market overall.
- Also of note: cash sales accounted for 35% of closings for 2012 with conventional financing making up 58%. (FHA, VA and Owner Carry make up the difference.)
Prior to December, which had fewer closings than December of last year, we had seen an increase in the number of monthly closings for seven months straight. All-in-all, from a ‘number-of-sales’ standpoint, 2012 was indeed an impressive year. (Let me know if you would like more information on which particular areas of Big Bear accounted for the lion share of this overall increase in sales.)
Prices on the Rise in Big Bear
What impact, you may wonder, did this big increase in sales have on prices? Overall the average price in Big Bear rose 6.4% in 2012 compared to 2011. To put that in perspective, it has been six years since we have seen a yearly increase in average sales price. (Again, price increases vary dramatically in different areas of Big Bear, so let me know if you would like more details on which areas appreciated the most.)
A few interesting notes on the price increases:
- In the past few years it has been the market under $250,000 that has been strengthening, whereas now we are seeing demand also spread into higher price ranges.
- Sales in the $250,000 - $500,000 range increased a whopping 38.9% from last year.
- The price ranges from $500k - $750k and $750k – $1 million showed solid increases as well.
So it is not only the bank owned homes under 100k that are selling now in Big Bear. In fact, sales of homes over $1 million almost doubled: 21 closings in 2012 vs. 12 in 2011. Many are also starting to realize that we are in the middle of an amazing trade-up market. So if you have out-grown your Big Bear cabin, trading-up in today’s market is certainly worth considering.
Inventory Declines
Lack of inventory is emerging as the biggest obstacle to a sustained market rebound. To avoid a bottle-neck in the Big Bear real estate market, we simply need more inventory. We currently have only 352 active residential listings. (Inventory levels have never been this low in the time since I started selling up here in 2004; see below for a historical perspective.)
Active Residential Listings: A Historical Perspective
With 131 homes currently in escrow the absorption rate stands at 37%. This equates to a four-month supply using a 45 day closing period, about half of what was avaible two years ago . If inventory remains tight and demand remains consistent or continues to increase, this will lead to more and more competition for well-priced new listings. As a buyer in today’s market, it is imperative to stay a step ahead with real-time alerts on new listings. I can, if you would like, set you up to receive those. If you are interested, just let me know.
Putting it all Together
For buyers, the current affordability of cabins coupled with rock bottom rates make it a great time to consider a mountain home investment. I look forward to helping you achieve your real estate goals here in Big Bear. If you are considering selling, normally spring into summer would be the best time to list. However, the current market, with its solid demand coupled with the lack of quality inventory, makes this a great time to market and I look forward to helping you with that as well. I hope you find this update useful and informative and until next time, all the best and happy hunting.