Hello all! March, the month when winter finally turns to spring, is here at last. Although two recent storms have left lots of new snow on the ground, so there is still plenty of winter fun left to be had. Let’s take a look at how the Big Bear Real Estate market is holding up.
Currently, we have 650 active residential listings on our MLS. I expect that this will be the low for the year and inventory will begin to steadily increase as we move towards summer. By late summer, I would not be at all surprised to see over 1,000 homes on the market. (As a seller, would you think it makes more sense to market when the inventory is low or when it is high?) There are 105 homes currently in escrow leading to a whopping 16% absorption rate or 6.25 months of inventory. Overall, the first two months of 2011 is on par with what we saw over the same period last year. The first two months of 2011 saw 121 closings versus 118 in 2010. The average price of all sales in January and February of 2011 was $225,656, a 5% decline from $236,903 over the same period of 2010.
It will certainly be interesting to see how the market shapes up as we head towards the busier selling season in Big Bear. Interest rates are still historically low, as are prices. It seems the most difficult challenge for buyers in the current market is finding the RIGHT house, as the inventory of well-priced homes is actually a bit thin right now. Bank-owned properties, less than 7% of our active inventory, continue to attract lots of attention. There are simply not enough to go around. But I would suggest to any of you fixated only on foreclosures that, in general, it is better to buy a GREAT house at a good price that it is to buy a good house at a great price. Food for thought there….
We have been analyzing the market with respect to price range and geography of late. Today, let’s take a look at how buyers are paying for their purchases. As the graph below illustrates, the Big Bear real estate market has seen an incredible increase in the number of cash sales. In 2002, only 7% of closed sales were cash, versus 33% in 2010. Another interesting note: in 2010 under $150,000, a total of 41% of the deals were cash. And overall, 41% of all bank-owed sales last year were cash buyers as well. I initially thought that when looking at the upper end, say over $1,000,000, we would see mostly cash buyers as well, but that price range saw 31% which is still a big number, but in line with the average for the overall market. This dramatic increase of cash buyers in our market makes sense to me as it is indeed more difficult (for good reason), and certainly more of a hassle to obtain a financing than in years past. (Although financing is certainly obtainable and qualifying is a very straightforward process, so let me know if you need a great referral to a lender on that.) But I think aside from that, what is driving most of these cash sales is that folks that are looking to park some money for the next few years are of the mind that the real estate market will outperform equity and debt markets. More than anything, it is the solid investment opportunities that are driving so much cash into real estate right now. As I mentioned before, it is indeed a great time to buy the RIGHT piece of real estate in Big Bear. Contact me for the information and insight you need to make an informed and educated decision. I am happy to help and always look forward to hearing from you.
Until next time – All the Best and Happy Hunting.