Yearly Archives: 2018

November 2018 Market Update by Mike SannesBig Bear Real Estate - The Mike Sannes Team, November 9, 2018

Hello from Big Bear and thanks for checking in with us regarding Big Bear real estate. There is quite a bit to catch up on since our early summer update, so let’s dive right in.

What a roller coaster ride 2018 has been for the Big Bear real estate market. If you recall, we ended the 1st quarter (Q1 market update) with a solid 10.8% year-over-year average sales price gain. The perfect storm of historically low supply, combined with higher than normal demand for that time of year due to our complete lack of a snow-filled winter, fueled the 1st quarter increase. In fact, by the end of May the increase in the average sales price here in Big Bear peaked at 15% (3% a month for 5 months straight!). As is typical, late Spring into early Summer brought lots of new inventory and many very optimistic sellers to the market. It was at this time, in our last market update in early June, that we speculated as to whether the Summer market would be able to “absorb” all this new inventory especially given these new and ambitious prices. 2018 YTD Monthly Absorption RateIn looking at the absorption rate chart to the right it is safe to say that the answer to that question is… not exactly.

Note: The absorption rate is often thought of as the "speed" of the market. For example, if we have 100 active listings with another 50 homes in-escrow, the absorption rate would be 50%. This would be akin to doing 100 mph in your car, as a 50% absorption rate in Big Bear is a very fast market, whereas 25% is quite slow.

Through the 2nd quarter and into the 3rd of this year, the market simply stalled quite dramatically as the chart below, which details the number of closed residential transactions, illustrates. The larger than normal spread that developed during this time, between the average $ per sq/ft on new active listings vs. similar properties sold in the last 30-60 days, was simply too much for market to bear. And as such sales, and in turn prices (and also the leaves) began to fall as we headed into Fall.

Residential Sales YTD 2018

Which brings us to where we are now: Year-to-date (through October) vs. 2017, the total number of sales decreased by 19.5%, or 234 homes. Each month of 2018 has seen declining year over year sales; however, in looking at the last 3 months (August, September, October) compared to the same period in 2017, sales are off by a substantial 35%.  A dramatic slow-down to say the least.

2018 Has Seen Declining Residential Sales

Change in Average Sales PriceDue to this slow-down the market gave back much of the price gains for the year as the average price increase now sits at 4.3%, an average decrease of over 2% a month for the last 5 months straight from its peak of 15% at the end of May.  The chart to the right illustrates just how thing have changed since May of this year.

So to summarize: The market was hot, and then it was not. However, October did bring with it a wave of price reductions from motivated sellers looking to find the market and we are seeing a significant uptick in activity overall as we head into November.  Months of SupplySo perhaps the amazing number of sales we saw in the last half of last year and the amazing run-up in prices that defined the beginning of 2018, was a bit of an anomaly and we are settling into a more normal, slower-but-steady, (but not stagnant) market as we look towards 2019. There is currently 5.6 months of supply, which indicates a balanced market, (as opposed to the strong seller’s market we saw in Q1.

It has been an interesting ride indeed and we will keep you posted going forward. So please do let us know if  if you have any questions on the market, on any homes you see for sale here in Big Bear, or on your homes current value.

For Buyers: There are currently many great homes at reduced prices to choose from and our new MLS Search, which has new filters added such as recent price drops, new listings, days-on-market, and recently sold properties, can help.  So, be sure to check it out.

For Sellers: The market, although volatile, is still up year-to-date and the tremendous online exposure our marketing provides will help ensure great results and a top-dollar sale. Contact Mike for more info.

Until next time, thanks for reading and Happy Hunting!

June 2018 Market Update by Mike SannesBig Bear Real Estate - The Mike Sannes Team, June 15, 2018

Hello from Big Bear and thanks for checking in with us regarding Big Bear real estate. As we are already over five months into 2018, let’s dive right in and catch up on the happenings in the Big Bear real estate market.

The listing season is well underway and the number of homes for sale here in Big Bear has significantly increased since our last update. You’ll recall from our first-quarter update that the inventory, which typically declines in the winter months, dropped much more than usual this winter. In February of this year there were only 262 active residential listings; this is the lowest we have have seen since I began selling real estate here in Big Bear in 2004. However, by mid-April there were 364 active listings and currently there are 469 active residential listings on the Big Bear MLS. As expected, we have seen a substantial increase in supply as we head into summer.

Historical Absorption RateBut as we know, markets are driven by both supply and demand. An informative market metric that illustrates both supply and demand is the absorption rate: The rate at which active listings are being absorbed (a.k.a. purchased) by the demand in the market. The absorption rate is often thought of as the "speed" of the market. For example, if we have 100 active listings with another 50 homes in-escrow, the absorption rate would be 50%. This would be akin to doing 100 mph in your car, as a 50% absorption rate in Big Bear is a very fast market, whereas 25% is quite slow.

With 469 active listings and 151 homes currently in-escrow (which equates to 4.7 months of supply), we currently have a 31% absorption rate in Big Bear. As the chart above illustrates, this is down notably as compared to the prior five quarters.

For you information, the charts below show the current absorption rates by area and by price range.  Where the absorption rates are red, that indicates the speed is faster than the overall market.  Where the absorption rates are blue, this indicates that the speed is slower than the overall market.

Absorption Rate

Also of note: When looking at the first five months of this year as compared to last, you’ll find that the number of closed residential transactions decreased by a sobering 12.6% (483 in 2017 vs 422 in 2018). The Fox Farm area took the brunt of the decline. However, the average price of all the residential homes sold during this same period, increased by a substantial 14.9% ($306,205 in 2017 vs. $351,723 in 2018).
Absorption Rate

As we head into the summer selling season here in Big Bear the market overall, so far at least, has been able to absorb all this new inventory at a respectable pace. But, with the significant decrease in the absorption rate from March to June, primarily caused by the dramatic rise in number of listings, it will be interesting to see if this will continue to be the case.

Stay tuned, and until next time, all the best and happy hunting. Please do let me know if you have questions on any homes you see for sale here in Big Bear, or your homes current value given the recent appreciation we have experienced. THANKS!

Q1 2018 Market Update by Mike SannesBig Bear Real Estate - The Mike Sannes Team, April 19, 2018

Hello and thanks for checking in with us regarding the Big Bear real estate market.  The first quarter of 2018 is in the books, so let’s take a look at what transpired and what to expect going forward.

Q1 was a Supply-Side Story

Big Bear’s unique resort home market, like all markets, is driven by supply and demand. The story in Q1 of 2018 was on the supply side. The lack of quality inventory in our market overall had two main effects.

Lack of Quality Inventory Meant Fewer Homes Sold

Q1 2018 Home SalesFirst, fewer homes sold in the first quarter of this year (Jan-March), then sold in the same period of 2017. In fact, closed residential sales for the first quarter of 2018 were off a substantial 10.8% vs. 2017 (240 in 2018 vs 269 in 2017). The primary reason for the decline in the number of homes sold was a lack of well-priced homes for sale. ...continue reading

2017 Year In Review by Mike SannesBig Bear Real Estate - The Mike Sannes Team, January 31, 2018

Hello and Happy New Year! Thanks for checking in with us regarding the Big Bear real estate market.  2017 was an incredible year for real estate in Big Bear.  Let’s get caught up on what transpired and also speculate on what this means for the market going forward. ...continue reading