By Mike Sannes, December 21, 2014
Looks like we will have a white Christmas here in Big Bear this year! Recent storms brought winter weather with a solid 4-6 inches of new snow and much more is expected. With 2014 rapidly winding down, and the New Year just around the corner, we wanted to wish you all Happy Holidays and provide a quick update on the Big Bear real estate market.
Supply and demand defines all markets, and the Big Bear real estate market is no different. On the supply side, it has been an interesting year in that we have seen larger than normal variations in homes available for sale.
- We started the year in a very low inventory environment, with less than 3.5 months of supply in late winter.
- We then saw a dramatic increase in homes for sale and reached 8.5 months of supply by summer’s end.
- At present, we have settled into a more ‘balanced’ market as there are currently 512 active residential listings on the market that, with roughly 95 closings per month, equates to 5.5 months of supply.
The Big Bear real estate market always experiences seasonal fluctuation in inventory. However, this year, the variation in the number of homes for sale month by month, was more dramatic than normal.
The demand for homes in Big Bear, based on the number of closed residential sales, decreased dramatically when compared to 2013. Through November, we have seen roughly 16% fewer sales than over the same period last year. Prices however, have not only held but increased. The average sales price, January through November of this year compared to last, is up an impressive 10% overall.
So to summarize 2014 in the Big Bear real estate market:
- Fewer homes have sold in Big Bear this year (16% fewer than last year);
- But those that did sell, sold for more money (10% average price increase as compared to last year).
The future, as they say, is not ours to see. That said, I expect that Big Bear will continue to gravitate towards a more "normal" and balanced market. This would mean that there would be approximately a 6-month supply of homes to choose from, as opposed to a strong buyers’ market (when inventory swells to the 8 month mark or more), or a strong sellers’ market (when inventory drops to 4 months or below). I also expect to see an increase in the number of sales overall next year, as there are some very nice deals still available and interest rates remain historically low. I also think we will continue to see appreciation, but I expect that to continue at a slower but steady pace.
Food for thought regarding investing in real estate here in Big Bear: although on an average price basis Big Bear is up 23% from its very bottom at the end of 2011, there is still quite a way to go on the appreciation side before Big Bear would be deemed ‘overpriced’ relative to other areas in Southern California. Big Bear has not seen the dramatic run-up in prices that much of Southern California has seen recently.
In fact, if in the next 3-5 years, we were to get just half-way back to where we were at the end of 2006, that would produce a respectable 27% increase in values from where we are now over that period of time. This seems plausible to me as long as the economy overall (as measured most importantly by job growth and wage increases) continues to thrive. I have no doubt the population in the metropolitan areas of Southern California will continue to want to invest in ‘life-style’ type real estate that not only produces a nice return, but also provides a great alpine get-a-way that they and their families can use and enjoy as well.
Thanks for checking in with us regarding the real estate market in Big Bear. And until next time – Have a very merry Holiday Season and a happy, healthy and prosperous New Year. Do let us know if you or anyone you know has questions about buying or selling real estate in Big Bear. Cheers!