The "Perfect Storm" of 2008 Will Be Hard to Forget
For Big Bear real estate, 2008 was a year that will certainly be hard to forget. The analogy of a 'perfect storm’ comes to mind in trying to describe the array of unprecedented events that transpired last year. For real estate in Big Bear the year started out slower than molasses on a very, very cold day. The deed recordings for January (44) and February (43) were roughly half those of 2007 which, by historical standards, was also a very slow year for sales. The 10-year averages from 1997 through 2006 for deed recordings in both January and February are 133 and 134, respectively. The 20-year averages from 1987 through 2006 are 126 and 121, respectively. So, the first two months of 2008 were roughly 65% off the 20-year average. That would point to a dramatic shift in the market wouldn’t you say??
The Clouds Hanging over Big Bear Real Estate Began to Part Mid-Year
That trend reversed from June through November when deed recordings in 2008 surpassed the year prior. In fact by June of 2008 the market began to find more traction as prices were coming down and the inventory was building towards the high of roughly 1,250 residential listings in late summer. Looking at residential transactions under $250,000 in the Big Bear real estate market, June began a trend of increased sales which continued through the end of the year. In fact, overall in 2008 compared to the year prior, sales under $250k were up 25%; whereas, the total number if of transactions was off 16%. A few more numbers of-note. The average residential sale price in the entire Big Bear Valley has dropped 18% this year and 26% from the peak in November of 2006, (certain sub-areas have seen much steeper declines than others.) In 2008 versus 2007, the average days on the market increased from 125 to 135 and the average sale/list price went from 95% to 94%.
The Financial Crisis Impacted Big Bear Real Estate's Recovery
Coming into the fall, just when the Big Bear real estate market was showing more signs of stabilization, the credit markets, investment banks and financial markets overall, took a big turn for the worse. These events pulled the rug out from under the momentum that had been building causing the real estate market in Big Bear to limp to the finish line in 2008.
Looking Forward: What will 2009 bring to Big Bear Real Estate?
The big question, as always, is what comes next. It is important to note that nothing fundamentally has changed. The uniqueness Big Bear offers as an investment market remains. It is still within a 2 ½ hour drive of roughly 20 million people. There is still a big, beautiful public lake and two great ski resorts right in town. Being surrounded by national forest and predominantly a second home market, Big Bear has not seen an abundant oversupply of new construction. In fact the active inventory has come down of late as there are currently 936 homes on the market.
My take on the coming year: For those who have kept some powder dry, the combo of interest rates around 5% and the dramatically discounted prices will be hard to resist. Many who have been waiting, will now get into the Big Bear real estate market, as it truly is a great time to buy.
I will post next regarding the growing number of Big Bear foreclosures, otherwise known as bank-owned listings, that we are seeing in the Big Bear real estate market. So, check back for that. Also, check out the new map-based Search Big Bear MLS now available on my Big Bear Real Estate website. And, as always – when you’re ready to buy, I am your guy. So let me know if you have questions or would like more info. Happy Hunting.