Other than the usual dynamics of supply and demand guiding the real estate market's direction over the past few years, foreclosures have had a huge negative impact on home prices. As banks rushed to rid their books of non-performing mortgages, they often priced their homes below market value to move them quickly. In additional, millions of foreclosures nationwide and hundreds locally increased home inventory. This flooded home supply while the demand to buy wained in light of a recession and uncertainty about the economy's future.

Looking at the number of foreclosure filings over the past three years, I am pleased to see that the foreclosure rates in Big Bear are dropping quite quickly. Here are some figures showing how foreclosure filings (notices of default and notices of trustees' sales) in each of Big Bear's four zip codes are on the decline: 

Big Bear foreclosures

Big Bear City Foreclosures

Sugarloaf Foreclosures

At these rates of decline, foreclosures will soon be a non-factor as far as their effect on the Big Bear real estate market.

See all current Big Bear foreclosures for sale.

An equally important trend in the foreclosure-sphere that is helping Big Bear home prices rebound is the apparent pricing strategy of banks. With definitive signs of a market recovery, banks are choosing to price their homes closer to market value rather than under market value. So long as banks continue to list their homes at current market values, their impact on Big Bear home prices should be minimal.

In addition to increased sales, fewer Big Bear homes for sale, and record low mortgage rates, the decline in foreclosures is yet another sign that Big Bear real estate is on the road to recovery.