August 2013 Market Update: As we head into the last weeks of summer here in Big Bear, the nights have definitely been getting cooler, but has the Big Bear real estate market been cooling off as well? Thanks for checking in with us on the state of the real estate market in Big Bear. We are happy to help and always look forward to hearing from you, so do let us know if you have any questions on the market or are interested in buying or selling real estate here in Big Bear.
The overall trend we have seen so far this year -- increasing demand in the face of low to moderate inventory -- is, for the most part, still in effect. As you recall from last month’s update, June of 2013 was the first month we documented a decrease in residential sales (off 7% from June 2012) in over a year. We attributed this to the sudden increase in interest rates and a limited amount of well-priced properties for sale.
Let’s take a look at what transpired in July and what that tells us about the direction the market is heading going into the 4th quarter:
- A solid comeback in sales occurred: July 2013 saw a 25% increase in the number of closed sales from June (114 sales in July vs. 91 in June) and a 16% increase in sales when compared to July 2012.
- July also saw demand for more expensive homes continue to increase, as sales in the price range between $250k - $500k increased 53% from the year prior and increased 17% from the month prior. It will be very interesting to keep an eye on how sales in August shape as an indicator on what is to come, so stay tuned for that report, which will be out in 2 weeks.
- The average price of homes sold in Big Bear increased 2.5% from July of last year and was up slightly when compared to June as well.
- The all important sale-to-list-price ratio has tightened up to 97% and the days-on-market is down to 93 days.
The inventory is gradually climbing back to what we would consider a normal, balanced market and the absorption rate (the best indicator of current demand, defined as the number of homes in escrow, divided by the number of active listings) has been holding at an amazing 37% (this was stuck in range of 12%-15% in 2008 – 2010). So, if interest rates continue to hold under 5%, I expect a strong finish to the third quarter and expect to see a healthy increase in sales and prices in the fourth quarter as well.
Again, let us know if you have questions on any of this or any properties you see for sale in Big Bear. We have access to all that is for sale and are looking forward to helping you find and buy a great piece of real estate.