Big Bear Real Estate: 2007 In Review

Despite a substantial market slowdown, it remains a great time to be looking to buy real estate in Big Bear.  Interest rates remain at historical lows; the inventory of homes has increased significantly over recent years; the number of motivated sellers is also on the rise; and the unique dynamics that make Big Bear an attractive investment real estate market are all still in place.  As 2007 is now behind us, let us review what has transpired in Big Bear's real estate market, take a look at where things currently stand, and consider the direction going forward.

Oh What A Year It Wasn't

As 2007 is now history, let us take a look at what transpired in Big Bear´s real estate market.  The figures below represent only residential sales and the data, unless otherwise specified, is taken from our local multiple listing service.

Big Bear Real Estate: Market Statistics, as of December 31st, 2007 (taken from Big Bear MLS data)

Single Family Residence
2005 to
2006 to
No. of homes sold 1,817 1,172 -35% 794 -32%
Median list price $295,000 $325,000 10% $320,000 -2%
Median sales price $290,000 $319,400 10% $310,000 -3%
Sales, as a % of list 98.0% 96.3% -2% 95.3% -1%
Average DOM 68.6 83.6 22% 124.2 49%

Of Note

As your local real estate professional part of my expertise comes from diligently tracking, in much more detail than is mentioned here, what is happening statistically in Big Bear´s real estate market. I often find that review of the numbers leads to questions. If you have questions, would like insight and analysis in order to make more sense of what is covered, do not hesitate to call or email. I am happy to help and look forward to hearing from you.

Review of Big Bear Real Estate in 2007

It has been said before that "no news is good news."  In 2007, there was no shortage of news on real estate and most of it was not good. Unless of course you´re a buyer with money to invest, in which case historically low interest rates, the increased inventory of homes to choose from and the many motivated sellers in the market, is an enticing combination. Many would be buyers however have been frozen in the headlights as the market continues to digest the bad apple of the sub-prime mortgage situation.

It is important to note that Big Bear is a 'resort market' and differs as such from typical 'primary residence' markets. In many primary residence areas right now, bank-owned properties, owners trying to avoid foreclosure, and homebuilders who still need to sell lots of new inventory absolutely shape and control those markets. That cannot be said here. In Big Bear´s market, there is just not much discretionary buying at the moment, which has lead to the dramatic decrease in sales. Buyers in Big Bear typically place a lot of value in owning an investment they can see, touch, use and enjoy and it is the enhanced quality of life these vacation homes provide for them and their families, in addition to all the tax benefits and the possibility for appreciation, that attract buyers to Big Bear. Most of the recent sales I have been a party to consist of buyers whose time horizon is longer: meaning regardless of what happens in the next six months to a year, they are getting in the market now at a really good price with great financing terms and plan to use and enjoy the benefits of home ownership in Big Bear for years to come.

Regarding the Numbers: A Bit of Analysis

You´ll notice in the table above that the number of homes sold in 2006 vs. 2007 was down 32% and that the average ?days on market´ has grown from 83 to 124.  What I find interesting is that the sale to list price ratio has held up at around 95%. This happens because in a price sensitive market, overpriced listings do not get shown.  Only when a property has a very competitive list price does it sell.  Then, on average, it sells close to the list price. Many sellers come on the market listed too high. Gradually they begin to realize that ?hope´ is not really a solid strategy.  They then play a catch up game which extends their days on market. Another interesting note is on price.  In 2005 the median sale in Big Bear was $290,000, in 2006 it was $319,400 and in 2007, despite the lack of activity, it was $310,000.  Of the 1065 current listings the median list price is $339,000. In a nutshell, prices in our resort market are holding but number of transactions is way down.

Looking Forward

So the big question, of course, is what does the future hold? How long until the market stabilizes and what happens to prices between now and then? The truth is that the future, especially given the current climate, is uncertain. There are too many factors, all of which have been quite volatile of late, such as employment figures, overall economic growth and interest rates, just to name a few. To pinpoint the exact timing of change is impossible. In my opinion, a shift back toward a more balanced market will be determined by the mood of the consumer and the overall health of the economy. When those with discretionary income feel comfortable stepping off the sidelines, the number of homes sold in Big Bear will rebound.

What is certain is that as a buyer or a seller, there has never been a time that expert counsel and representation has been more in need. Making an educated decision given the many options open to buyers in this market, requires putting a knowledgeable professional like myself to work for you.

In closing, I think that, while 2007 might be a year most sellers would like to forget, 2008 has the potential to be a very very memorable year for buyers who have been considering owning in Big Bear and are ready to take advantage of current opportunities.