By Mike Sannes, March 18, 2015
Hello and thanks for checking in with us regarding the the Big Bear real estate market. The beginning of a new year is always an interesting time for Big Bear real estate. How we start the year often lends insight into where we might finish and what to expect in between.
A Tale of Two Months
This year started as a tale of two months in stark contrast. The Big Bear real estate market finished strong in 2014. The average price of homes in Big Bear was up 9.8% last year compared to 2013 (The number of closed sales, however, was off by 13.7%.)
I was expecting that momentum to carry into 2015 but in fact, January of this year saw only 62 closed residential sales vs. 81 in January of 2014 (a 23% decline.) This is not uncommon as, after the holidays pass, the winter months in Big Bear can often be slow from a sales perspective. Prices held but our average days-on-market increased (up to 128 days on average from 115 last January.) The growth that we did see in the market in January came in the price range of $250,000 - $500,000. Sales in this price range were up a substantial 59% compared to last year. Whereas sales under $250,000, where most of the money has been changing hands — sales under $250,000 accounted for 62% of all sales in Big Bear last year — actually decreased in January by 51%.
January Residential Results
And then came February. The market made a nice recovery as we saw 69 closed sales this February vs. 67 in February 2014 (up 3%.) Hopefully this trend of seeing more homes sell this year than last will continue. We are already half way through March and I do see this trend holding as we head into Spring. Aside from seasonality, it is hard to point a finger as to why January was so underwhelming. I have noticed that cash buyers have accounted for only 28% of closed sales so far this year. In previous years, these cash buyers have typically accounted for approximately 35% of Big Bear sales, with that number peaking in the 40% range in 2008-2010.
February Residential Results
Supply & Demand Indicate Shift to Sellers’ Market
The story in the Big Bear real estate market from a supply and demand perspective is the recent increase in demand. When running these numbers, there were 407 active residential listings on our Big Bear MLS and 157 homes currently in escrow (not counting short sales, as those often do not close.) These figures equate to a whopping 38.5% absorption rate. The absorption rate has been hovering in the high 20% to low 30% range in recent months, so this is a significant increase. Although the total number of listings have come down a bit, it is really the large boost in the number of homes currently in escrow that has contributed most to this increase in the “speed” of the market.
Based on a typical 45-day closing period, current inventory equates to only 3.8 months of supply. If you recall, less than four months of supply denotes a “sellers market” and, based on the limited competition and rising demand, now is a great to time to list and sell here in Big Bear. We have been able to achieve fantastic results for many sellers in the market and would very much look forward to speaking with you about how you can obtain a top-dollar sale as well.
A couple of bright spots looking forward:
- Interest rates remain at historically low levels.
- Mammoth Mountain’s purchase of our two local ski resorts has recently closed.
- The confidence in the overall economy should help keep Big Bear’s real estate market heating up as winter fades.
We have access to ALL that is for sale here in Big Bear. So if you have questions on anything you see for sale, or would like a more specific valuation pertaining to your particular property, please do let us know. Until next time, all the best and happy hunting.