Over the past few years, we have seen distressed properties disappear from the Big Bear real estate market much faster than anyone expected. Once the driving force behind declining home values, foreclosures and short sales now make up a relatively insignificant part of home sales in Big Bear and no longer are the main reason for declining property values.
Take a look here at the diminishing number of Notices of Default and Notices of Trustees Sales filed on Big Bear homes.
Over the past year alone, you will see that both NODs and NTSs have been reduced by more than half!
Now let's look at what's happened to foreclosure sales since the market downturn began in 2006.
With foreclosure sales only one-third of what they were at their peak, at the current pace, I would expect in another year or two that foreclosures will be almost non-existent.
Currently, we have 374 Big Bear homes for sale and we have just 8 bank owned homes listed. That means that foreclosures make up just 2% of all listings. So far this year, we have had foreclosures make up 144 of our 1171 Big Bear home sales representing only about 12% of all sales. This is a big improvement over 2009 when we saw almost 37% of sales being foreclosed properties.
Somewhat more difficult to quantify is the pricing strategy of banks that have foreclosed on homes. Subjectively, agents are noticing that banks who list foreclosed homes are listing at market value or above market value prices. This is in stark contrast as to what was happening near the peak of foreclosures back in 2009-2010. During this time we saw banks listing their homes significantly under market value, thus causing real estate price declines across the entire Big Bear real estate market. Now that banks are in a much better financial position, they are no longer in a frantic hurry to unload these homes off their books and are more likely to ask for current market value prices, even if that means spending a few months on the market.
When the market was near its bottom, most real estate professionals agreed that it would be the decline of foreclosures which would be the main indicator of a market recovery. True to that prediction, as foreclosures have declined since 2009, we have seen our number of home sales increase and price start to recover. Let's hope we see these trends continue on 2014!