With just 420 Big Bear homes currently for sale in the Big Bear MLS, and with the number of home sales up 12.5% in 2014, the laws of supply and demand suggest a very strong Big Bear real estate market. In fact, December's sales showed only 3.9 months of home inventory, the lowest seen since October 2013.

Home inventory is derived by taking the average number of homes listed for sale in a given month (461 for December) and dividing that by the total number of Big Bear homes sales for that month (117).

Here's a look at a history of Big Bear's home inventory going back to June of 2014.

In a balanced market, you will likely find 5 to 8 months of inventory. If inventory is 9 months or more, it is considered a  buyer's market.  With lots of homes for sale, seller's must compete to get sold, often by lowering their prices. If inventory is 4 months or lower, it is a seller's market. With few homes for sale and many buyers looking to purchase, sellers can demand top dollar.

You may have noticed in the graph above that inventory tends to peak in the summer months and declines in the winter months. This trend is predictable and happens almost every year.

But if you compare month-to-month, you will see that this December's inventory was a full month less than last December's. In fact, you'll see that every month from June through December had a lower inventory than the previous year. This trend is perhaps the most reliable indicator of a solid real estate market. It falls back on economics 101; when demand is high and supply is low, prices go up.

Per the inventory numbers above, it certainly appears that we will see another strong year for the Big Bear real estate market.