As I frequently mention in my blog, real estate often boils down to Economics 101, particularly in regards to the theory of supply and demand.
When there are a lot of homes for sale (high supply) but very few people who are looking to buy those homes (low demand), prices will fall as sellers will have to drop their prices to make their homes more appealing to buyers.
But when there are very few homes for sale (low supply) while there are many buyers looking for homes (high demand), prices will rise as sellers command a stronger position in negotiations due to there being more competition among buyers vying for the few homes that are for sale.
Currently, the Big Bear real estate market has the fewest number of homes for sale dating back at least a decade and likely much longer than that. Take a look at the figure below.
As of this morning, there were only 256 Big Bear homes for sale in the entire valley per the Big Bear MLS. This represents a whopping 70 percent drop in listings since I started keep track in 2011. Anecdotally, most agents remember there being about 1200 listings back in 2009 when the market turned for the worse. Based on that number, we are seeing an incredible 80 percent fewer listings.
As far as buyer demand, here is a figure that shows the number of listings from a given month divided by the number of sales from that month. This measure is referred to in the business as "Months of Inventory". It is the best way to display supply and demand in the market.
In a normal market, there is usually about 4 to 6 months of inventory. Right now, we are close to just 2 months.
All this is good news for the Big Bear real estate market. With prices rising as buyers compete for the few homes that are for sale in Big Bear, with interest rates still near the 4% mark, and with all other economic news trending towards the positive, I would expect another great year for Big Bear real estate in 2018!