Zillow.com has received a lot of attention lately in the real estate industry.  In essence, this site allows users to pull up the value on any property in the U.S., ideally their own.  The site uses public data to get among other things the property square footage, age, year built, and most important, sales data.  It then crunches all this information and comes up with its current valuation, which typically is a wide range.  It allows the user to add information to their property that may change the value or that is wrong on the site.  It is a pretty interesting site and quite fun to mouse around and look at all the details it pulls up on properties.  There are even some satellite photos with different angles that you can view.  The site is still in beta testing and they continue to add new features.  Take a look at the site here.

When I first heard of Zillow earlier this year, there was a conversation out there that this service was going to replace the real estate agent.  The thought was it would be very similar to what the founder of Zillow did to the travel agent business when he founded Expedia.com.  I have heard the same comments many times before when the Internet was coming about and real estate advertising was going online.  With each new technology change, that argument comes up.  What many people do not understand is that a real estate purchase is vastly different than booking your next vacation.  From the dollars involved to the number of occurrences it happens in a persons lifetime, the two fields are vastly different.  No matter how much technology changes, the majority of consumers are still going to want a lot of hand holding when it comes to buying or selling a home.  That is what a professional real estate agent is for.

I have found that using Zillow to valuate properties in the Big Bear area can be inaccurate. 

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Just received the most recent sales numbers for August, 2006 (Download first_american_aug. 06.xls  {Excel file, 1.61 MB}, compliments of First American Title).  It looks like much of the same as the number of sales in August were down 20% compared to last year and 40% versus August of 2004.  Year to date, the number of sales this year are down 23% as compared to the last ten years average.  Compared to 2005 & 2004 year to date numbers, sales are down 23% & 43% respectively.

It is very important not to confuse the number of sales with the level of prices.  Interestingly enough, prices are not down at all.  In fact, prices are still higher than they were last year by a significant amount.  Based on the Big Bear MLS sales statistics, the average price for residential sales year to date is $407,898, with a median price of $324,000.  The average price last year at the same time was $375,627, with a median price of $284,000.  That is a 14% appreciation in residential prices over the last year.

I do believe this number will come down closer to the lower single digits over the next year as more inventory and competition is on the market but this is not even close to all the stories I keep hearing about the real estate market going down the toilet.  Don’t believe everything you here but make sure you hear everything.

Given the amount of press coverage nationwide regarding the real estate market, I thought it would be informative to discuss the current real estate market conditions in Big Bear.

Big Bear has not been immune to the national sales statistics this year either.  People see that homes are still selling and that prices are still high, and think that things still must be okay.  The fact is that prices are still much higher than they were in 2000, but they are starting to level off and in some cases, drop.  I think it is only a matter of time, if not already happening, before a noticeable price drop will be seen.  I don’t anticipate a huge drop in prices, but I think it will probably be around 5-10%.

One of things that I have been keeping an eye on is the number of sales over the last 10 years.  2004 was the 2nd best year (just 21 sales shy of # 1 which was 2002) for the number of sales over the last 10 years.  Looking at these numbers (Download 10_year_average_doc.xls [Excel doc. 1.6 MB] compliments of First American Title), it shows the Big Bear real estate market was already slowing down towards the beginning of 2005, which ended up 22% down in sales from 2004.  To further show what the market is doing this year, 2006 has consistently been lower than the 2005 sales numbers on a per month basis.  The 2006 sales activity is 24% down from the 2005 number year to date, and compared to the 2004 numbers, the market is down 44% year to date.  All this and the prices are just starting to show a downward decline.

I have noticed over the last few months that sellers are starting to get a little bit more anxious when it comes to the market conditions.  As a seller, it is more important now than ever to price the property correctly in the beginning, or face the risk of the market, the buyers and the agents rejecting the home.  Buyers are looking at all the options now and they have definitely been listening to the news a little too much as many of them think the floor is caving in and prices are dropping drastically…..that has yet to be seen.

It will be interesting to see what happens in the next 6-12 months.

Sometimes it takes reading or seeing something numerous times, in this case blogging, before I feel the need to embrace it. Working in the real estate business for the last 8 years, there have been numerous changes in our industry, almost all dealing with the internet and technology. Blogging appears to be the next “thing” as much as I can tell. So, this is my attempt. I have some ideas in mind, we’ll see how it goes.