Big Bear Real Estate: Will the market keep rolling into summer?
The first quarter of 2010 is already in the books. Now that tax time is behind us, T.S. Eliot was right, April is indeed the cruelest month; will the Big Bear Real estate market keep on rolling into the summer? Let’s get into the trenches and review the state of the Big Bear real estate market to see what the first quarter numbers indicate:
On the supply side, inventory remains tight as there are currently 636 active residential listings in the Big Bear Valley. Historically this number will be on the rise in the months to come as spring is normally a time when sellers get their properties ready to bring to the market, although ‘normal’ is not a word you could use to describe the real estate market in Big Bear over the last few years. And if demand remains constant or increases, which seems probable, more on that below, then the market may continue to efficiently absorb the well priced homes, which would in turn keep overall supply from seeing a big increase through spring. We shall see…But I anticipate seeing the number of listings head towards 750 by mid-June.
There are currently 139 residential properties in escrow leading to a whopping absorption rate of 21.8% (that number had been hanging at around 10% through the price correction period over the last few years.) That is an incredibly healthy change in that number and illustrates a high level of demand.
Bank owned listings make up 8% of the active inventory but 47, or 33.8%, of the 139 homes in escrow are bank owned. The bank owned absorption rate stands at 92%. That is truly amazing, but certainly makes sense, as properties listed under market value continue to draw lots of buyer interest and in many cases the competition for these deals is fierce.
In Q1 of 2010 there were 192 closed sales and 44% of those were bank owned. That was an overall increase of 15% in number of transactions compared to the first quarter of 2009, although sales under $250k have increased 25%.
Also, interesting to note, in March we saw the increase in number of transactions spread into the $250k-$500k price range as those closed sales increased by a stunning 41% in March 2010 compared to March 2009. Days-on-market of properties sold in the first quarter of 2010 averaged 134, whereas the average bank owned days on market was 59, and the average sale to list price ratio increased from 94% in late 2009 to where it stands currently at 97%.
What does all that tell us about the Big Bear real estate market rolling into the second quarter? In a nutshell, demand has significantly increased and shows no signs of retreat. The dynamics behind demand in Big Bear real estate, which is primarily a second/vacation home market, are being driven by a few main factors:
- Urgency to lock in historically low interest rates: The Fed spent nearly all of its allotted 1.25 trillion (with a T!) stimulus money and has recently stopped making the market in mortgage backed securities by no longer buying literally all that Fannie and Freddie churn out. As a result, private investors will need to step in, but will likely demand a higher rate of return for the risk involved and, as such, many feel interest rates will begin to rise.
- That, coupled with the urgency to take advantage of the incredible deals popping up, should keep the real estate market in Big Bear humming right along heading into summer. (Interested in what is for sale in Big Bear?)
Let me know if you are interested in more details on the opportunities in the Big Bear real estate market . I am happy to help and always look forward to hearing from you. Until next time, all the best and happy hunting.