With the last business day of 2017 behind us, I reviewed the market numbers for this year to see how we fared compared to last year. I also took a look at where we are from a longer term perspective.
Here are a few graphs that tell the big story.
Average and Median Sale Price of Big Bear Homes
Compared to 2016's numbers, the average sale price of a Big Bear home rose 9.5% to $338,973 while the median sale price rose 5% to $268,500. For a longer term look, check out the figure below.
You can see that Big Bear real estate has been steadily recovering since the market's bottom in mid-2011, but we're still about 15% behind the market's peak in early 2007. The market is definitely moving in the right direction with several positive influences that will likely spur future appreciation. More on that later.
Price Per Square Foot of Big Bear Homes
Compared to 2016's numbers, we saw the average price per square foot rise 7% to $223 this year while the median rose 6% to $214. Here's a figure showing the longer term trend for the price per square foot measure.
Once again, we see the price per square foot of Big Bear homes peak in 2005 - 2006 with the market bottoming out in 2011. Although these measures have risen steadily about 70% since the market bottom, we're still about 20% behind peak prices.
Big Bear Home Sales
Big Bear homes sales were up an impressive 23% over last year with 1425 closings in 2017. Here's a look at sales going back over a decade.
Sales of Big Bear homes were the highest they've been in over a decade in 2017, more than double what they were in 2008 when "The Great Recession" hit. With buyer demand at a 10 year high, the Big Bear real estate market is in a very good place right now.
Big Bear Home Inventory
Buyer demand is one part of the economics equation. Supply is the other. Take a look at the figure below showing the number of listings on the market over the last 7 years.
With the number of Big Bear homes for sale the lowest they've been in well over a decade, we have very little supply of homes for sale to meet the highest buyer demand in over a decade. This bodes very well for Big Bear real estate prices moving forward into 2018! Also, you can see the annual trend of listings peaking in summer then hitting their lowest point in the winter.
Months of Inventory
The most popular way for real estate economists to look at the supply and demand of a market is to do so in terms of "Months of Inventory". They derive this number by taking the number of current listings and dividing that by the number of sales from the previous month. This theoretically suggests how many months it would take for all the current listings to be sold at the current rate.
A normal market has about 4 to 6 month of inventory. Currently we are at 2.2 months of inventory. This is the strongest indicator that the Big Bear real estate market is in a very good place. Lots of people want to buy a Big Bear home while very few are listed for sale. This means sellers will have more buyers competing to buy their home, and as such, prices should rise.
Other Factors Affecting Big Bear Real Estate
In addition to strong market numbers, the recent purchase of the local Big Bear Resorts, Bear Mountain and Snow Summit, by Aspen Ski Company/KSL Capital Partners has been received as a big positive by most buyers I have talked to.
Mortgage rates are still hovering around historical lows hanging around the 4% mark. The stock market had impressive gains in 2017, unemployment is the lowest it's been in 15 years, and the recovering real estate market has resulted in additional equity for homeowners.
All these positive factors suggest a continued stable and strong market with further appreciation expected for Big Bear home values in 2018.