Your Big Bear Lakefront Real Estate Blog

An up-to-date resource for lakefront market reports, news, and infomation...

Nov. 16, 2017

Big Bear Real Estate Sales - October 2017

October sales were up 33% over last October with 157 closings of Big Bear homes.

Prices of Big Bear homes continued to appreciate with the average and median sales prices up 6% and 12% to $359,543 and $285,000 respectively. Meanwhile, the average and median prices per square foot were up 8% and 6% to $228 and $219 respectively.

The average Days On Market rose marginally from 95 days to 126 days while the median rose from 80 days to 88 days.

The average and median sales price to list price ratio stayed steady at about 97%-98%.

Although this is all great news for the market, the most impressive market stat is the extremely low level of home inventory. Couple this with a 33% jump in sales over last year, and we have a very strong market, suggesting that prices should rise significantly moving forward.

Take a look at the figure below showing months of inventory. This is derived by dividing the number of listings in a month divided by the number of sales. Theoretically, this shows how many months it would take to sell all the current listings if no new listings were to come on the market and if the sales rate were to remain the same. Keep in mind that in a normal market, you will find four to six months of inventory. 

Big Bear Home Inventory

Couple the incredibly low inventory with increased sales along with mortgages hovering near historical lows and the economy the best it's been in over a decade, and I would expect the market to experience even greater price gains moving forward.

Posted in Market Reports
Oct. 10, 2017

September 2017 Home Sales Show Continued Appreciation

The number of Big Bear homes sales increased significantly in a September same month comparison as did all four price measures.

Home sales this September were 37% higher than last year with 168 closings. The average and median sales prices were up a remarkable 18% and 13.5% to $347,093 and $289,500 respectively. The average and median prices per square foot were up 10% and 9.5% to $232 and $221 respectively.

The average Days On Market for Big Bear homes dropped by 4 days to 102 while the sales price to list price ratio rose from 97% to 98%.

In a year-to date comparison, Big Bear home sales in 2017 are up 22% over the same time period from last year. The average and median sales prices are up 5.5% and 4% to $298,835 and $250 respectively. The average and median prices per square foot are up 7% and 4.5% to $293 and $200 respectively.

Days On Market has risen slightly from 100 to 103 while the sales price to list price ratio is steady at 97%

There are currently only 404 Big Bear homes for sale compared to the 541 homes listed at this time last year representing a 25% decrease in inventory. When you divide the 404 current homes for sale by the 168 sales from last month, that results in a meager 2.4 month's worth of inventory! 

With interest rates still hovering around the 4% mark and the national and local economies showing no signs of slowing, I'd expect the market to stay strong through the foreseeable future.

Posted in Market Reports
Sept. 28, 2017

Lakefront Sales Get Busier Towards Year End

Most Big Bear lakefront home buyers think that once summer is over and temperatures start dropping that lakefront sales wain. In fact, the opposite is true. Take a look at the following graphs regarding lakefront home sales over the last 10 years.

Big Bear Lakefront Sales Per Month

Big Bear lakefront sales per quarter

The first graph clearly shows that 2 of the busiest 3 months for lakefront sales annually are October and November. This is what makes the 4th quarter of the year the busiest time of year for waterfront home closings.

Why would this be? Doesn't it make more sense that buyers would be focused on buying a lakefront during the hot, summer months when lakefronts are most attractive? What I have found over the years is that it is during those hot summer months, buyers begin looking for their lakefront home. Many of these buyers take several months familiarizing themselves with Big Bear's lakefront market before being comfortable enough to know what is available at what price and start to understand the different features that are most important to them.

So what does this mean for Big Bear lakefront home buyers and sellers?

Buyers need to be aware that when new Big Bear lakefronts come on the market, they might go fast, as many other competing buyers are still in the marketplace. As well, if you've been eyeing a particular property but are hesitating thinking that the seller will likely drop their price heading into the colder winter months, don't be surprised if that property suddenly ends up in escrow with another buyer.

For those selling a Big Bear lakefront home, this means that you've entered the busiest time of year for sales, and that just because temperatures are dipping below freezing at night, that doesn't mean there aren't any buyers still looking for their ideal lakefront home. If you are thinking about listing your lake front home, know that the market is just heating up and there's plenty of opportunity towards the year's end to get your waterfront home closed.

 

Sept. 7, 2017

Big Bear Lakefront Real Estate Update

After an unusually slow year for lakefront sales last year, 2017 is seeing a rebound in Big Bear waterfront home purchases, especially in the higher end price ranges.

With only 14 lakefront homes to have sold last year, so far this year we have already had 11 lakefront closings with 8 lakefronts currently in escrow. With the 4th quarter being our busiest for closings, I would expect there to be over 20 closings this year representing an almost 50% increase in Big Bear lakefront home sales.

Big Bear lake levelsThis uptick in sales is particularly encouraging as Big Bear Lake's water levels are still near record lows. Currently almost 13 feet 9 inches from full, the lake is about 1.5 feet higher than it was at this time last year, but still remarkably close to the October 2004 low of 17.5 feet from full. Even though the lake's water levels are low, lakefronts are selling.

Taking a closer look at these sales, you'll see that we have had more high-end, luxury lakefront sales than usual. Five of this year's 19 lakefront sales and current pendings are over the 2 million dollar mark. In comparison, each of the last two years saw only 2 sales over 2 million dollars and there has never been a year with more than 5 sales over the 2 million dollar mark.

Why such activity in the Big Bear luxury lakefront market? First off, we are seeing one of the best runs in history for the US economy. Since the economy hit bottom, the stock market has risen from 7000 to 22,000 while Big Bear real estate prices have risen about 60% since the market's bottom. With increased wealth comes increase in interest in second homes. With the majority of wealth gains being realized by the most affluent, we see interest in higher-end luxury homes.

In addition, Big Bear has been transitioning quite quickly into a higher end resort. Recent improvements to The Village area as well as expansion and development of Snow Summit Resorts base area have really made Big Bear an even more attractive place for those looking to escape the hustle and bustle of life below the mountains.

So after a slow year for lakefront sales, this year has given us the pick-up in waterfront sales we were hoping for. If the patterns of  Mother Nature come to be this winter, hopefully next year will be even better with a long awaited topped off lake! 

 

 

Sept. 3, 2017

2017 Year To Date Market Numbers - Through August 31, 2018

Looking at the Big Bear real estate market from a year-to-date perspective, we see continued single digit price appreciations even though sales are up an home inventory is down.

There were 846 Big Bear home sales through August 31st of this year compared to just 645 during the same time period last year. This 31% jump in sales has resulted in about 30% fewer homes currently for sale than there were at this time last year. 

Although demand is high and supply is low, prices have risen at a more moderate rate than would be expected.

The average and median sale prices are up 3% and 1% to $311,717 and $256,000 respectively. The average and median prices per square foot are up 3.5% and 2% to $218 and $210 respectively. 

The average days on market before selling is up slightly from 95 days to 103 days while the sales price to list price ratio is staying steady around 97%.

 

 

 

Posted in Market Reports
Sept. 2, 2017

Big Bear Home Sales Jump In August

There were 141 Big Bear homes sold this August as compared to last August's 103 sales representing a whopping 37% rise in home buyer activity. As a result of this vigorous buyer activity, the inventory of Big Bear homes for sale is extremely low for this time of year with only 486 single family residences listed or sale valley-wide as compared to there being about 698 listings for sale around this time last year.

With prices having risen consistently since the market bottom 6 years ago, the currently strong buyer demand and low remaining supply of listings have continued to push prices higher. The average Big Bear home price is up 3% to $317,410 as compared to $307,844 last August. Meanwhile, the average and median price prices per square foot are up 9% and 7% to $229 and $221 respectively.

The average and median days on market are up slightly to 84 and 66 while the average sales price to list price ratio has remained the same at about 97%.

It seems like the strong economy, continued low interest rates, and local factors such as the purchase of our local resorts by Aspen Ski Company have buyers bullish on Big Bear. With summer winding down this Labor Day weekend, I would expect the market to remain busy as more prospective late summer buyers move off the fence towards buying while interest in the upcoming winter season starts to increase.

 

 

 

Posted in Market Reports
Aug. 1, 2017

July's Big Bear Real Estate Numbers

July was yet another strong month for Big Bear real estate sales as there was a 17% increase in homes sales over the previous July with 110 closings.

All four major price measures showed mixed results. The average sale price dropped 10% as compared to last July down to $299,451 and the median sale price dropped 3% to $245,000. I feel that these price drops are an anomaly and the result of a few low sales affecting the relatively small sample size and not an indication of the market changing direction.

Meanwhile the average price per square foot rose 6% to $220 and the median price per square foot rose about 1% to $207. These price per square foot numbers generally offer a more accurate view of market status.

The average and median days on market rose slightly to 100 days and 73 days respectively while the average sales price to list price ratio rose about .5% to 97.5%.

Per my previous post, home inventory remains very low for this time of year and interest rates are still hovering around 4% for a conventional, conforming 30 year fixed rate loan.

As for other local factors affecting the Big Bear real estate market, the local resorts, Bear Mountain and Snow Summit, are still in the processed of being purchased by Aspen Ski Company/KSL Capital Partners . Locals are still optimistic and expect a positive economic impact if and when the resorts change hands. Big Bear Lake's water level, although still very low, is 2 feet higher than it was at this time last year.

Overall, the Big Bear real estate market is still in a very strong place with few, if any, negative influences at this point in time. I'd expect this trend to continue through at least the rest of the calendar year. 

 

 

Posted in Market Reports
July 27, 2017

Big Bear Home Inventory Stays Remarkably Low

The number of Big Bear homes for sale has remained remarkably low this summer with only 511 single family residences currently for sale in the Big Bear MLS.

Looking at the graph below, you can see that the only other time since the market's bottom in 2011 that we've had fewer listings was in mid-summer in 2013. You'll also note that home inventory peaks cyclically in the summer months and decreases through year's end.

Big Bear Homes For Sale

With so few Big Bear homes for sale and with buyer demand remaining high, the local real estate market is in a strong position for sellers. Anecdotally, I have been having trouble lately finding homes for sale that fit the wants and needs of my clients. When these homes do come on the market, they are likely to result in near full price or over full price offers as buyers are forced to compete. This bodes well for Big Bear home values as prices will trend higher.

Posted in Market Reports
July 1, 2017

2017 First Half Big Bear Real Estate Market Report

We're halfway through 2017 and the market has been growing as predicted; single digit appreciation with strong buyer interest and low home inventory resulting in continued price gains.

Sales are up 12% over last year with 513 Big Bear homes sold in the first half of 2017. Home inventory is down with there currently being 529 homes for sale compared to 625 last year at this time.

When comparing Big Bear home sales from the first half of 2016 to that of 2017, we saw the average and median home price rise 5% and 3% to $307,511 and $298,492 respectively. Meanwhile, the average and median price per square foot rose 5% and 4% to $204 and $200 respectively.

The average Days On Market dropped slightly from 105 days in 2016 to 100 days in 2017, while the median Days On Market stayed even at a very low 65 days.

The sales price to list price ratio also stayed steady around 97.5% with sellers conceding 2.5% off list price at the time of sale on average.

So the market remains strong and prices keep rising. With interest rates still around 4% and the overall economy doing well, things are looking for for the second half of 2017!

Posted in Market Reports
June 28, 2017

Local Appraiser Explains Flaws Using Price Per Square Foot Comparison In Big Bear

One of the most common questions we get as realtors from buyers and sellers is about the price per square foot when comparing properties to derive value. One of our most experienced and respected local appraisers, Rick Hackney, explains the flaws in making comparisons using price per square foot and points out why it is even less accurate using this measure in the Big Bear real estate market.

 

Why Doesn't a Big Bear Appraiser Use Price Per Square Foot to Determine Value

 

"What is the price per sq ft?"  I get this question often from realtors and homeowners.  Because this is a common method of comparison, I thought I would explain how appraisers view this approach to value.

 

The price per sq ft is the most familiar method of comparison that many people are aware of.   Remember that everything about the property is summed up in the price per sf, including the lot size, view, age, quality, condition, and other features, all lumped together into a price per sf.  Because of this, it is important to select sales that are very similar to the home you are appraising and from the same neighborhood.

 

If you have a home with a 2 car garage, or a larger lot size, or superior view and are comparing it to a home with none of these features, the accuracy of your estimate will be reduced.  This is also true if you look at a home that is significantly larger than yours, even though all other features are equal, because a larger home will typically sell for less per sf.  This is the principle of diminishing returns that states the more square footage you add the less value you get for the extra area.

 

Homes in Big Bear were individually built on vacant lots from back in the 1920's to the present.  You have large and small, old and new, custom and basic construction mixed together within the same tract or neighborhood.  As a result, the price per sq ft method of valuation is unreliable.  The exception to this is the Maple Ridge tract across from the Big Bear High School, because these are similar in age, lot size, only a limited number of models exist and the design and features are very similar.  There are variables, primarily limited to upgrades of exterior siding and interior finish work.  This area is one of the few in Big Bear, that is similar to tract housing, found down the hill. 

 

Price per sq ft may be a good indicator of value for tract housing.  Appraisers however, are required by lenders to select recent sales "comps", in close proximity to the house being appraised, with as many similarities as possible.  Instead of calculating price per sq ft for these comps, lenders require that each sale be adjusted for differences, including, lot size, view, quality of construction, condition of improvements, bedroom/bath count, living area, garages, etc.  The appraiser is required to be geographically competent and to have researched the area regarding market reaction (how buyers react) to these differences and make adjustments accordingly.

 

I hope this sheds some light on how appraisers estimate value and why they don't rely on price per sq ft.  If you have any questions, I will do my best to answer them.  I can be reached at 909 866-4225.

 

Best Wishes,

 

 

Rick Hackney

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