The time it will take to sell a house in Big Bear dropped by 10 months in April 2008.  With the pick up in home sales that we saw in March, the absorption rate for the Big Bear real estate market dropped from 32.72 months to sell to 22.80 months to sell. 

This is encouraging news for home sellers though the market is still very heavily favored toward buyers.  The market will need to get closer to a 1-3 month absorption rate in order to get back to a sellers market.

Now that we are heading into the spring and summer season for Big Bear, sales will pick up even more.  But, so will the properties coming on the market.  The total inventory of houses on the market is currently at 1094.  This number could easily be 1500 by July 4th of this year.  So, even if the number of sales pick up to 100 home sales per month, the number of homes on the market will still far outweigh the demand. 

The number of sales per month needs to be closer to 200 for the market to see any kind of significant pick up.

                                                            Absorption Rate By Price Range

                                                                   Absorption Rates By Area

Properties priced under $500,000 are selling the quickest while those between $500,000 and $1,000,000 are not faring as well.

Properties in Fox Farm, Sugarloaf, & Erwin Lake sold better as compared to Big Bear Lake Central, Lake Williams, Baldwin Lake,  & Big Bear City.

These numbers change from month to month.  Some of the price ranges and areas that are not doing well now have performed better in previous months. 

If you are interested in how the real estate market in Big Bear is performing, be sure to sign up for my RSS feed or email newsletter.

The National Association of Realtors recently released a report on second home sales that was reported on by The Dallas Morning News.

The article states that second home sales nationwide dropped by more than 30% in 2007 when compared to 2006. This is pretty consistent with what we saw in the Big Bear real estate market in 2007. There were 1172 residential sales in 2006 as compared to 796 sales in 2007, a difference of 34%.

I noticed a few important points to take from the article as it relates to the Big Bear real estate market:

Second homes are discretionary purchases, and there is a natural tendency to pull back from big-ticket items in periods of uncertainty.

This seems relatively straight forward though we are still seeing some big ticket sales.

There were 45 sales in Big Bear over $1,000,000 in 2006 and 39 sales in 2007. That is only a drop of 13%. There have been 6 sales so far in 2008 over $1,000,000 and 4 properties in escrow right now.

There were 186 houses sold in 2006 priced between $500,000 and $1,000,000 while there was 135 sales in the same price range for 2007. This a drop of 27%.

Houses sold under $500,000 in 2006 totaled 945, with 2007 numbers for this price range coming in at 623 homes sold. This is where the biggest drop was noticed, almost a 34% drop in sales.

Buyers simply adopted a wait-and-see attitude

We definitely noticed this mentality in Big Bear’s prospective buyers over the past year. Buyers would come up and look at properties, find the perfect place, and then say,”we are going wait and see what happens with things.” In a time of uncertainty, most people want to wait and see what is going to happen with the prices of homes, which is completely understandable.

But, it is during these times that good opportunities will present themselves so you have to be aware of this fact. By the time you realize we have hit the bottom of this market, it will be too late. The top of the market was late 2005 and no one knew until until mid 2006 and later. Once you find we’ve hit bottom, everyone knows. This changes all the dynamics of a buyer’s market. Prices and buyer competition will again rise. Does this sound familiar?

Even with the slowdowns, a significant number of residential properties purchased in 2007 – almost one third of total sales – were acquired as second homes.

This is a significant number when you look at it. For every 3 home sales in the U.S last year, 1 was a second home. This should only increase as more and more Boomers start thinking about retirement. Also, as the world population continues to grow everyday, many people are going to want the cabin in the woods to get away from it (and them) all.

Big Bear is uniquely situated to capitalize on both of these aspects. With over 20+ million people in the Southern CA area, Big Bear and Lake Arrowhead are really the only two options within a few hours drive. And given that we are surrounded by the National Forest, there are only so many options that will be available.

The median price of vacation homes purchased nationwide in 2007 was $195,000, down 2.5 percent from 2006.

The median price for homes purchased in Big Bear in 2007 was $309,950, down 3% from the median price of $319,400 in 2006.

Vacation home buyers appear to be more bullish about the housing market. About 80 percent second-home buyers surveyed last year said they considered it a good time to invest in real estate. That compares with about 60 percent of primary home buyers who had that view of the market.

Interesting point given that most of them have been waiting to see what happens with this market. The current rumblings out there that were are hitting bottom now is bringing some of the fence sitters out to buy. It is still too earlier to tell but I expect things to start getting better in the next 12-24 months.

A peak of population is moving through the prime years for buying recreational property.

The Baby Boomer generation should continue to drive second home and vacation homes sales for years to come. Boomers are the biggest generation from a population standpoint. This, coupled with the fact that many Boomers are now getting the money from their parents passing away, a good amount of this money will be spent on discretionary items like second homes.

Though it may be slow now, pent up demand will catch up and sales are certain to follow.

Knowledge and information are key components of making any smart decision. While all real estate values, customs, and trends are determined by local standards and economic forces, there are still some similarities shared by all second home markets.

These are all good points to keep in mind if you are planning on investing in, or selling, a home in the Big Bear area in the near future.

The Big Bear real estate market saw an increase in homes sold in the month of March with a total of 46 48 homes sold.  Historically speaking, this is still considered very slow sales activity, though it is nearly 60% 65%higher than January and 50% 54%higher than February of this year. 

The median sales price for homes sold in the month of March also increased, going up nearly 8% ($282,000) 10% ($2865,00) as compared to the previous month ($260,000).   The median sales price is still down 2% only down $1000 from the January median sales price ($287,500).

While there were more homes sold this past month, they are still far off the sales numbers from 2006 & 2007.  March 2008 home sales were down 54% 52% as compared to March 2006 and down 44% 42 % to that of March 2007. 

In addition, the median sales price for homes in Big Bear for March 2008 was down 13% 11%and 10% 8% for 2006 and 2007 respectively.

We are heading into our summer selling season so these monthly sales numbers should increase.  It will be interesting to see how they compare to 2007 sales numbers.  Be sure to check back monthly to keep tabs or sign up here to get Big Bear real estate market updates sent to you via email.

* Note: The chart above will be updated on a monthly basis. It represents single family home sales in the Big Bear area, including Big Bear Lake, Big Bear City, Moonridge, Fox Farm, Sugarloaf, Erwin Lake, & Fawnskin. Data courtesy of the Big Bear MLS. These numbers do not include raw land or condos nor does not include homes in the Big Bear MLS that are located out of the Big Bear area.

The absorption rate provides a clear picture of what is happening in the real estate market and is good to share with buyers and sellers.

I determine the absorption rate for Big Bear by taking the previous month’s sales in a particular price range or area (you can use others like bedrooms, square footage and such), and divide that into the total number of available properties in that same criteria set.  This will give you the amount of months it will take for the market to absorb the properties for sale, assuming no other properties come on the market.

I prefer to use the previous month’s numbers rather than going back a full year or 6 months because the last month is more representative of the current market conditions. 

Determining the absorption rate by going back 12 months can be done, though I feel it is outdated.  Sales that happen 12 months ago really don’t show how the market is currently performing.

Why is this important?  Knowing the absorption rate will tell you what the real estate conditions are like in a particular price range and area.  If you are selling your property, this will help when determining your asking price.  When getting ready to buy, this will help you become more informed on what segments of the market might provide you with more leverage.

                                                                  Absorption Rate By Price Range

                                                                        Absorption Rates By Area

By price range, the properties for sale in the price ranges of $300,000 and below, and $500,001 to $1,000,000 did the best last month.  The properties priced between $300,001 to $500,000 and $1,000,001 and over did the worst in February.

By location or area, Big Bear Lake West & Central, along with Fox Farm and Sugarloaf had the best sales activity rates while Lake Williams, Baldwin Lake, Erwin Lake, Big Bear City, Fawnskin, Whispering Forest, Moonridge, and Big Bear Lake East did not perform as well last month.

The key to both of these is the amount of homes for sale.  There are 361 homes for sale in the $300,001 to $500,000 price range and only 5 sales last ast month.  Likewise, there were 204 homes for sale in Moonridge with only 4 sales last month.

If you are considering selling or buying in the Big Bear, make sure you know these numbers.

Big Bear Absorption Rates For January 2008

Big Bear Absorption Rates For February 2008

I provide Big Bear real estate updates all the time.  Absorption rates are updated on a monthly basis, market updates on a weekly and monthly basis, and neighborhood updates for areas like Castle Glen, Meadowbrook Estates, and Big Bear lakefront properties from time to time.

Be sure to check back or sign up for my real estate newsletter feed and make it easier on yourself.

There are a few different ways to answer this question.  Looking at the average sales price or the median sales price are a couple of the most popular ways to do so.

One way that I thought would be interesting is to look at direct comparison of some Big Bear properties that have sold the past few years.  I pulled data on some properties that sold within the past few years and have subsequently resold, and then compared the sales price data. 

It is interesting to see how the home prices have fared in Big Bear the past couple years.

These prices assume that nothing else was put into the properties.  208 Turlock, for example, had another $35,000 put into the property by the owner for upgrades during the past 2 years.  Therefore, the real loss in equity is closer to -16% as they had approx. $391,000 into to the property.

Obviously, home prices in Big Bear have come down the past few years.  I believe the numbers above go to show that the homes prices peaked right around the end of 2005 and beginning of 2006.  Most of the homes that were purchased around this time frame, and that have since been resold, have realized the biggest equity losses. 

Homes that were purchased in years prior to 2005 still have some equity, but we’ll see if that continues or if they start see some equity losses in the next year.  If home prices continue to fall, that could be the case.

Another important point to note is that the biggest price drops & best values for home buyers in Big Bear are in the bank owned properties.  There was an average of 33% drop in the sales prices as compared to the previous sales prices of the 4 properties above. 

If you are a home buyer looking for a good deal in the Big Bear area, then you may want to focus on these. Check out bank owned & REO properties in Big Bear for more details and information.

The listing price is $244,950, 2 bed, 1 bath, 1,020 square feet with a detached garage.

This photo was pulled from our Big Bear MLS this morning. It has been on the market 36 days with this same photo. Given that close to 80% of all home buyers are now going online to start their search, the fact that first impressions and curb appeal are huge, and the reality that there are many properties/options on the market for sale, does this photo make you want to buy this home?

I would think most buyers are going to pass right by this one online.

A couple other items to note: There is only one photo of the home (no interior photos), the snow in the picture has long since melted (maybe it is covering up some hidden gems). What about a photo of the detached garage?

The notes in the MLS say, “the seller is motivated and will consider all offers.” Rather than saying you are motivated, you may want to show your motivation by cleaning the property up and getting some nice photos taken.

I understand that not all homes will take the greatest photos. But, at some point as an agent you might not want to use a photo, or not even try to sell it, until the property is cleaned up and a better photo can be taken.

I believe more damage is being done by going with this photo than nothing at all.

But, I am not a buyer. What do you think?

Update - Here’s a photo I took of the property today and it does not look much better. The previous picture with snow really hides a lot, which might be why they are still using it.