July 2013 Market Update: Thanks for checking in with us on the Big Bear real estate market – Lots to cover, so let’s dive right in: The real estate market in Big Bear showed significant progress in the first half of 2013. The recovery we have been tracking has solidified. The rebound in number of sales persists and price appreciation is underway.
- As compared to the first half of 2012, this year (January - June) saw a solid 17.8% increase in the number of residential sales. Interesting to note: Of what sold 13% were foreclosures, 10% were short sales and 75% were ‘regular’ resale.
- 30% of all those sales were cash transactions.
- 65% of all those sales happened under $250,000, whereas 27% sold between $250,000 and $500,000. The number of sales in this $250,000 to $500,000 price range increased 63% from last year! It is encouraging, and a healthy sign for the market overall, to see demand for higher-priced homes increasing at such a substantial rate.
There are 505 ‘Active’ residential listings on our Big Bear MLS and 165 homes currently in escrow which, based on a 45 day closing, equates to 4.5 month supply. The inventory has been steadily increasing from the 356 listings we had 4 months ago. But although it has increased, inventory still remains low for this time of year as we usually have 650+ listings on the market coming into August. Based on current supply and demand, it is still most definitely a sellers' market here in Big Bear. That said, there are certainly some amazing deals for buyers to be had as well.
A few other interesting stats on the current Big Bear real estate market: With this dramatic increase in demand, the average ‘Days-On-Market’ dropped from 110 last June to 74 this June. (Over the first 6 months of this year it averaged 104 vs. 130 over same period last year.) And the very important ‘sale-to-list-price-ratio’ has held firm at 95% overall.
Price Appreciation in Home Prices in Big Bear
What effect, you may wonder, has all this activity had on prices here in Big Bear? Well, we are seeing some steady appreciation so far in 2013. Through the first six months of 2013 the average price overall in Big Bear Valley has increased 4.7%. This is the first year since 2006 that prices have risen over a 6 month period and certain areas of Big Bear have seen significantly larger increases. The chart to the right shows Average Sales Price by Area and the Change in the first half on 2013 vs. 2012.
In researching the latest market data, a surprise to me was that June of this year actually saw 9% fewer sales than June of last year. This is the first month in over a year that this has occurred. The slowdown in June was primarily caused by the rapid (1+%) increase in long term interest rates that occurred in May. This sudden and steep jump in rates rattled the market, as such a substantial increase has a dramatic effect on affordability. However, from a historical perspective, rates are still very very low and in the long run I think the increase in interest rates will actually create more urgency in the market as it is a clear signal that the low cost of money right now may not last and the opportunity to lock in a super low rate on a great piece of real estate could be diminishing.
It would seem to me that the Big Bear real estate market is poised to have a very strong second half of the year and I personally would not be surprised to see double-digit average price appreciation this year. Rates are still, and should continue to be for the near term, incredibly low and although the market is competitive, there are still incredible deals available. What is essential in today’s market is to work with a real estate team that knows the market and inventory in Big Bear well enough to keep you a step ahead of other buyers. We look forward to helping you do just that and hope to hear from you with any questions on the market or any homes you see for sale. Until next time – All the best and happy hunting.