Your Big Bear Lakefront Real Estate Blog

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Oct. 25, 2018

Big Bear Lakefront Real Estate Update - Fall 2018

It's been an interesting year for the Big Bear lakefront real estate market. With Big Bear Lake's water levels hitting a 50 year low, to say that lakefront home buyers have been hesitant is an understatement.

Before looking at the numbers, let's take a look at the history of ups and downs the lake has experienced over the years.

Big Bear Lake Levels

Note the fairly regular declines and quick refilling that Big Bear Lake has experienced several times in the past. Many people reason that the pattern above suggests that we will see a rebound in the lake levels this winter. Although no one can say with any certainty what will happen, it does seem plausible that we might see significantly higher water levels by next summer.

Regardless, many buyers have justifiably been hesitant to invest in lakefronts with the water level significantly down. This has resulted in a decline in lakefront home sales with only 10 closings so far this year. This is a measurable drop from the 23 Big Bear lakefronts that sold last year.

But there have been some lakefront sales nonetheless, as buyers are literally buying low in hopes of profiting when the lake's levels are once again high. It is no surprise that shallow water lakefronts, many with beached docks, see their values decline significantly when the lake's water level is so low. Some savvy buyers have been willing to buy these homes in anticipation of a more full lake in the near future. Although there is the risk of the lake's water levels continuing to decline, many of these homes will see $100,000 or more in appreciation simply by the lake filling up. 

As well, many people who have dreamed on owning a Big Bear lakefront home but who have always been "priced-out" are now able to afford a waterfront property now that the low lake level has resulted in lower prices.

As a result, with most purchases being shallow water lakefront homes this year, the average and median sale prices have plummeted. The average sale price of a lakefront home last year was $1,380,257 as compared to this year's average sale price being only $768,740. Obviously, this does NOT mean lakefront values have declined by 40% on a whole. It means that the environmental conditions have resulted in a shift in the type of lakefronts that are being purchased, which are generally of a less expensive variety.

Ultimately, the Big Bear Lakefront real estate market relies in part on Mother Nature in determining values. If the 50 year pattern extends to the near future, we should see a significant rebound in sales. In 2004, the lake was over 17 feet from full, just one foot higher than it is now. After a very wet and snowy winter, the lake's water levels rebounded to just a few feet from full by the following May. The result? Lakefront sales almost doubled in 2005, with a record 43 sales in 2005!

So the outlook for the Big Bear lakefront real estate market will depend on what Mother Nature has in store for us this winter. If the past is any indication of the future, next year could be a pretty big one for Big Bear lakefront home sales!

 

Oct. 9, 2018

Big Bear Real Estate Market Update Through 3rd Quarter of 2018

Now that the third quarter is behind us, I thought I'd take a look at how Big Bear real estate has fared through the third quarter of 2018 as compared to the same time period in 2017.

Overall Big Bear home sales have slowed significantly so far in 2018, dropping 19% from the previous year. But looking at the longer term trend below, it looks like we might be settling down into a more normal market after what was an unusually strong year in 2017.

Big Bear Home Sales - Quarterly

Meanwhile, all four major price measures have shown improvement in our year-to-date comparison. 

The average and median sale prices of Big Bear homes are up 3% and 7.5% to $337,334 and $289,000 respectively, while the average and median prices per square foot are up 10% and 11% to $232 and $224 respectfully.

Big Bear homes have sold slightly quicker this year with the average Days On Market dropping from 103 days to 90 days. The average sales price to list price ratio has stayed steady at about 97.7%.

The number of Big Bear homes for sale has risen slightly this year but is still well below the long term average. Currently, there are 506 homes for sale in Big Bear, whereas last year there were 410 homes for sale and 2016 saw 554 homes for sale in mid-October..

With interest rates rising and with so few homes for sale in Big Bear, home sales settling back down to a more historically normal level is not so surprising. The market seems to be neutral currently, as the shift is underway from a seller's market to a buyer's market.

Regardless, if you've considered selling your Big Bear home, it makes sense to think more seriously about this possibility with buyer's starting to gain the upper hand in negotiations. If you're a buyer, you will want to move quickly to take advantage of historically low interest rates before they rise further while keeping an eye out for motivated sellers looking to stay ahead of the market shift by conceding more in negotiations than they would have otherwise.

If you have any questions or comments, please contact me at Info@Zamoyta.com or (909) 557-8285.

 

Posted in Market Reports
Sept. 7, 2018

August 2018 Big Bear Real Estate Market Numbers

Although the number of sold Big Bear homes dipped in August, prices continued to rise on a same month comparison basis.

Big Bear home sales dropped from 143 closings last August to 104 this August. In spite of this, all four major price measures appreciated with the average and median home prices rising 7% and 11% to $340,246 and $282,250 respectively and the average and median price per square foot rising 4.5% and 5% to $240 and $229 respectively.

The average Days On Market for sold Big Bear homes rose slightly from 96 to 103 days, while the median remained the same at 70.

On a year-to-date basis, we see the same trends with sales dipping but Big Bear home prices showing continued appreciation. Comparing sales through August this year to those of the same time period last year, we see that the average and median Big Bear home prices are up 7% and 13% to $343,950 and $290,000 respectively while the average and median price per square foot rose 14% and 10% to $248 and $238 respectively.

The Days On Market dropped from 103 to 91 days while the median fell from 68 to 62 days.

The inventory of Big Bear homes for sale is up slightly, with 497 homes listed for sale in mid-August last year to 529 homes listed for sale in mid-August of this year. For a perspective, August 2011 saw an inventory of 838 homes for sale. 

Mortgage rates have continued to creep up with conventional 30 year interest rates hovering around 4.5% - still an extremely low rate from an historically perspective.

With summer behind us and gear shifting towards the upcoming winter season, we will see an overlap of late summer buyers with early winter buyers which should keep sales strong through the end of the year.

 

Posted in Market Reports
July 5, 2018

Big Bear Real Estate Update - June 2018

Same Month Comparison - June 2017 Compared to June 2018

After several months of all positives, we get some mixed messages in June's real estate numbers. But the overall trend for the year continues to show strong gains and a healthy market.

Sales were down 19% this June as compared to June 2017, most probably attributed to the poor winter season we had. As well, after several months of price appreciation, the average and median home prices dropped 7% and 4% to $312,927 and $282,000 respectively. Yet the average and median price per square foot measures were up 3% and 8% to $233 and $239 respectively.

The Days On Market remain slightly lower with the average dropping from 98 days last June to 77 days this June. The average sales price to list price ratio stayed about the same around 98%.

As I often mention, monthly trends can be less accurate due to the relatively low number of sales we see in our small market area. So looking at the longer term trend such as a year-to-date comparison can sometimes be more accurate.

Year-To-Date Comparison - 2017 to 2018

Sales this year are still down through June of 2018 with 14% fewer closings this year.

Yet the average and median sales prices are still up 10% and 12% to $346,583 and $290,000 respectively. The average and median price per square foot measures are also up 12% and 13% to $241 and $237 respectively.

The average Days On Market are down from 105 last year to 91 this year while the sales price to list price ratio stayed about the same at 98%.

Market Summary

Although interest rates have crept up into the mid 4% range and Big Bear home sales have subdued due to a slow winter, inventory remains low which is keeping prices moving in the positive direction. With the year's first good heat wave of the summer now gripping the Southern California, Las Vegas and Palm Springs areas, we will likely see sales jump next month as people seek a respite from the scorching temperatures by visiting Big Bear's cooler climate. With the increase in visitors, I would expect an increase in sales.

 

 

Posted in Market Reports
June 6, 2018

Big Bear Lakefront Cash Sales

I had a prospective Big Bear lakefront seller ask me the other day how often buyers purchase lakefronts with cash. I hadn't run those numbers recently so I decided to take a look.

Looking back through 10 years of lakefront homes sales in Big Bear, 88 out of the 220 sales were cash purchases, representing 40% of all sales. 

Of course this lead to other questions, such as whether the cash purchases were more frequent among higher-end lakefront sales or lower-end sales. When breaking down the average sale price of cash sales and non-cash sales, you get about the same results. The average sales price for cash sales was $1,269,436 whereas non-cash sales were slightly lower at $1,209,092.

How about trends? Have there been more cash sales over the last few years, or fewer? Looking back over the last 3 years, there have been 22 cash sales compared to 23 non-cash sales, with cash sales of Big Bear lakefronts almost being equal to non-cash sales. It's a pretty small sample size, but it would  make sense that cash sales have become more prevalent in today's booming economy.

As many realtors often say, "Cash is King", meaning that cash offers trump other non-cash offers and often times allow the buyer to pick up property at a discounted price. So I looked at lakefront cash purchases to see if they were able to gain a price edge in negotiations. Looking at the data, cash sales were purchased on average at 93.9% of list price whereas non-cash sales were bought at 94.03% of list price. So it appears that there was no significant cash discount when lakefront home buyers purchased with cash.

Lastly, I wondered if the 40% of lakefront cash purchases was more than that of non-lakefront purchases. It turns out that 35.2% of all Big Bear homes sales are cash. So Big Bear lakefronts are more likely to be purchased with cash than non-lakefronts, although only 5% more likely.

 

Posted in Market Reports
June 5, 2018

Big Bear Lakefront Real Estate Update - May 2018

MAY BIG BEAR HOME SALES

Although sales continue to be below last year's levels, prices have continued to show double-digit gains.

Sales still lagged due to the poor winter snow season resulting in a 9% drop from 116 Big Bear home sales last year to 106 this year.

Despite this slowdown, both the average and median sales prices increase 22% and 15% to $363,290 and $299,250 respectively. The average and median prices per square foot rose 19% and 18% to $254 and $250 respectively.

The average days on market dropped from 106 to 79 days while the median dropped from 63 to 55.

YEAR-TO-DATE BIG BEAR HOME SALES

So far this calendar year, although Big Bear home sales are down 13%, the average and median sales prices are both up 15% to $355,140 and $295,000 while the average and median prices per square foot are both up 14% to $243 and $237.

The average days on market has dropped from 107 to 94 days while the median dropped from 67 to 63 days.

Being that our year-to-date measure now has five months of data, the accuracy of the price gains becomes quite reliable. In addition, having a four price measures showing such similar gains (all 14% or 15%), I feel that these numbers are substantially accurate. In this regard, a 15% appreciation in home values over the last 12 months is really impressive!

BIG BEAR REAL ESTATE FORECAST

Although sales are slightly down this year, the aforementioned price appreciation shows that buyers are still willing to pay top dollar for Big Bear real estate. As mentioned above, the slowdown in sales is likely to the decrease in visitors this winter due to our dry, warm ski season. With our busiest season for home sales fast approaching, I will be interested to see whether sales rebound as expected.

Regardless of whether buyer demand increases, the supply of Big Bear homes for sale is still remarkably low. April's reading showed only 333 Big Bear homes for sale as compared to last April's 379 and April 2016's 461.

Perhaps the only negative in today's market is that interest rates keep creeping up. Although still near historically low levels at about 4.7%, they are nowhere near the recent 2012 low of 3.31%.

Once again, things are looking good for the Big Bear real estate market heading into summer. I expect sales to rebound and prices to continue to rise as visitors flock to the valley to escape the heat and enjoy life on the lake and in the mountains.

May 7, 2018

April 2018 Big Bear Real Estate Report

Although sales continue to lag due to the warm, dry winter Big Bear experienced in 2017-2018, prices continue to push upward.

Compared to last April, this April saw sales of Big Bear homes drop 22% to just 74 closings.

In spite of this, the average and median sales prices were up 19% and 7.5% to $299,912 and $259,000 respectively. Both the average and median prices per square foot also rose 4% and 8% to $228 and $211 respectively.

The average Days On Market dropped slightly from 100 to 97 while the median dropped from 64 to 53. The sales price to list price ratio stays strong in the 97%-98% range. So Big Bear homes are selling quicker and are still selling close to list price.

Looking at the Big Bear real estate market from a year-to-date perspective, sales are down 14% so far in 2018, but all four major price measures are showing double digit gains.

The average and median sales price are up 13% and 15% to $311,227 and $255,000 respectively. The average and median price per square foot both rose 13% to $228 and $211 respectively.

The average Days On Market dropped from 107 days to 99 days while the median fell slightly from 70 to 68. The sales price to list price ratio is still in the 97% to 98% range.

The main drivers for the continued market appreciation are the strong economy and low home inventory. Although sales have slowed this year due to a poor winter season, the historically low home inventory has still kept supply lower than demand. The figure below shows a five year history of Big Bear home inventory.

big bear home inventory

With so few homes for sale and with Big Bear home sales expected to rise as our busy summer season approaches, prices are poised to rise through the foreseeable future.

Posted in Market Reports
April 10, 2018

March 2018 Big Bear Market Report - Prices Rise While Sales Dip

Same Month Comparison - Comparing Sales from March 2017 to March 2018

This March saw a continuation of the trend we've seen over the last few months as sales of Big Bear homes were down while home prices continued rising significantly.

Sales slid from 107 closings last March to 97 this March representing a 13% drop in sales.

Meanwhile, the average and median sales prices both rose 13% to $356,696 and $300,000 respectively. The average and median price per square foot of sold Big Bear homes rose 16% and 20% to $246 and $239.

Unfortunately, the Days On Market - the number of days a home was listed before going into escrow - rose significantly from 97 to 129. I am guessing this jump is just a blip in the data for this month and not a longer term trend.

Year-To-Date Comparison - Comparing Sales from January 1st Through March 31st in 2017 to those in 2018

Comparing the last 3 months of sales, closings are down 11.5% this year. This is likely due to the poor snow year we had and the resulting decline in visitors to the valley. Fewer vacationers means fewer people who get interested in buying a Big Bear home which means fewer Big Bear home sales.

But not unlike the March same month comparison, prices saw impressive double digit appreciation over last year.

The average and median sales prices rose 11% and 17% to $350,633 and $295,500 while the average and median price per square foot rose 16% and 13% to $239 and $228 respectively.

The Days On Market dropped from 109 days to 100 days while the average sales price to list price ratios stayed steady around 97%-98%, showing that sellers typically conceded 2%-3% during negotiations.

Market Summary and Outlook

With sales dipping and interest rates rising about .5% from this time last year, you might have expected home value gains to level off. But Big Bear home prices once again showed double digit jumps as the strong national and Southern California economies are fueling market gains.

I am keeping an eye on the number of home sales moving forward. It will be interesting to see if home sales recover as summer approaches. Otherwise, the market remains strong with no signs of slowing down over the foreseeable future.

 

 

Posted in Market Reports
March 7, 2018

February 2018 Big Bear Home Sales Report

Comparing February 2018 to February 2017, Big Bear home sales slid about 11% with 66 closings last month. Most attribute this slow down to the lack of snow and consequent drop in visitors to the Valley this winter. However, in spite of sales being slower, prices showed strong gains.

In a February same-month comparison, the average and median sales prices were up 17% and 28% to $372,421 and $330,500 while the average and median prices per square foot were up 17% and 14% to $240 and $225. If these numbers seem too good to be true, it's because they probably are not telling the whole story. As I have mentioned in previous posts, in our slowest months there are so few sales that a few very high-end sales or low-end sales might sway the numbers too sharply in one direction or the other.

So let's look a a year-to-date comparison looking at sales from January and February of this year and comparing to that same time period from 2017. By adding more sales, the numbers should become more "realistic" in regards to growth.

When doing so, we see that sales are still down 10% so far this calendar year with 140 closings. The average and median Big Bear home prices show a 10% and 12% appreciation to $346,606 and $279,500 respectively. The average and median price per square foot also rose 12% and 14% to $234 and $226. This double digit annual appreciation seems to be a more realistic reflection of what's going on in the Big Bear real estate market.

Both sets of numbers show that Big Bear homes prices are continuing to appreciate at a healthy pace. 

Looking at other indicators, the average Days On Market has risen slightly from 104 last year to 117 this year while the average sale price to list price ratio has stayed about the same at 97.43%. The stability of these numbers is a good sign for the market.

Following interest rates, we have seen about a .5% rise over the last few months. Being that we're still at incredibly low rates in the mid 4% range, I don't think the slowly rising interest rates have had a big effect on the market to this point.

Lastly, perhaps the healthiest sign in today's market is the incredibly low inventory of Big Bear homes for sale. Currently in the Big Bear MLS, there are only 280 home listings. To put this in perspective, the figure below shows a short history of inventory.

Big Bear Home Inventory

With inventory so low, buyers compete to buy listings thus driving prices higher. Coupled with decent interest rates and a strong economy, things are looking good for the Big Bear real estate market in 2018.

Posted in Market Reports
March 1, 2018

Big Bear Lake's Changing Water Level and Its Effect on Home Sales

Lake Level History

In the midst of one of Big Bear's driest winters on record, there seems to be continued concern about the effect that Big Bear Lake's low water levels may have on real estate sales. If you've lived in Big Bear long enough, you've seen the lake this low before. In fact, if you look at the records from the Big Bear Municipal Water District, you'll see what appears to be somewhat of a pattern in the fluctuation of lake levels over time.

Bigh Bear Lake Levels March

Noticing the up and down nature of the lake's water levels, it is interesting to see how it takes several years for levels to decline yet the lake typically bounces back much faster. Two examples of this are when the lake filled 12 feet in 1992-1993 and 10 feet in 2004-2005. This leaves hope that if and when Mother Nature does decide to show up, the lake can - and historically does - fill up quickly.

Also note that the graph above shows measurements for the month of March. Typically, the lake will lose between 3-5 feet of water from its high point in the spring to its low point in the late fall. For example, when the lake was at this low a level back in 2004, the high point of the lake was in April when it was 14 feet 2 inches from full. By October of that year, the lake hit a low of 17 feet 6 inches, representing a drop of 3 feet 4 inches over the summer months.

If the lake has similar declines this summer, we may see the lake drop to 18 - 19 feet from full, which would be the lowest point in the 32 years that the BBMWD has kept records.

Miracle March?

As of late, I have heard a few local optimists predicting another "Miracle March", suggesting that the lake may still see significant help before winter's end by a potential flurry of late season storms.

The legendary and renowned "Miracle March" occurred in 1991 when Big Bear received 24.24 inches of precipitation, much of it in the form of snow, during the 31 days of March. In comparison, here are the precipitation numbers in inches for the month of March over the last five years; 1.08, 3.33, 1.28, 2.48 and 1.48. So the 24.24 inches from March of 1991 made for quite a white and wet month and is deserving of legendary status.

But how much of a difference did 1991's Miracle March make for the lake's water level?

In February of 1991, right before the "miracle", the lake was at 14 feet 6 inches from full. The high point of the lake later that year was 11 feet from full. So even with over 24 inches of precipitation in March, the lake level only rose 3.5 feet that year. In short, although a March Miracle would be welcomed, it might not result in the water level rebound one would expect.

Do Lake Levels Affect Big Bear Home Sales?

Ultimately, there are too many factors to be reliably certain of the water level's influence on Big Bear home sales. But looking at some of the sales data from 2004-2005, when the lake rebounded from 17 feet from full to just 3 feet from full in one winter, might give us some insight.

Take a look at the history of Big Bear lakefront home sales:

Big Bear Lakefront Home Sales

Note that lakefront home sales almost doubled from the 'low water year' of 2004 to the 'high water year' of 2005. This data certainly suggests that lake levels likely play a significant part in lakefront home sales. Also note that the second highest year for lakefront home sales was 2012, when the lake topped out at almost full capacity.

When we look at home sales for the overall Big Bear real estate market though, there were 1905 total sales in 2004 and 1802 total sales in 2005. So while sales of lakefront properties almost doubled when the lake filled up, overall sales were relatively unchanged, and in fact declined a little.

In my opinion, this strongly suggests that lakefront home sales can significantly be affected by Big Bear Lake's water levels, yet they have little bearing on the overall real estate market (non-lakefront) in general.

What Does this Mean for Lakefront Buyers and Sellers?

For sellers, it's really a bet as to if and when you think the lake will fill up again and whether you could take the proceeds from selling at a lower price today and invest it elsewhere for a greater, more assured profit over time.

For buyers, it is a bet as to how long it will take for the lake to fill up and potentially see significant gains on investments. For lakefront buyers, buying low and selling high has a literal meaning. If you buy when the water is low at a discount, you may be able to sell for significantly more once the lake levels are high.

Summary

Quite simply, we're likely to see some pretty low lake levels this summer. Before panicking, it's important to realize that the lake has historically had its ups and downs. Although lakefront home sales may be affected, the overall market will likely not be influenced much.

For lakefront buyers and sellers, it's really a guessing game as to when the lake's water levels might see better days again. Absent a crystal ball, nobody can tell you the future of Big Bear Lake. But referring back to the lake level graph at the beginning of this post, the previous patterns suggest we might see the lake levels bouncing back sooner rather than later.