Big Bear Real Estate Blog

Although it’s the start of a new decade, the big economic story of the last ten years had to be the unprecedented fall of real estate. The decline that began somewhere in late 2005 through early 2006 has finally shown signs that things are turning. The following historical sales data can show us just how severe things have been in Big Bear’s real estate market and where there are indications of an improving market.

You can see the general decline of both the average and median prices through the fourth quarter of 2009. Taking the quarterly high points and low points of both the average and median prices, you get an approximate 47% decline in values.

Looking at the price per square foot of sold homes, you see a similar trends.

For our local market, I have found that the price per square foot is a more accurate measure of where things are at in the Big Bear real estate market. The high point compared to low point in price per square foot reflects a 46% decline in values.

On the optimistic side, after consistent declines for over two years in the price per square foot measure, the fourth quarter of 2009 saw a significant increase. Although this increase is only one month’s numbers, breaking a two year trend may be telling of a change in the market.

When you look at the number of sales in Big Bear as compared to what has happened in pricing, you see similar optimistic signs.

As prices continually fell over the last few years, sales actually started rebounding two years ago as buyers started taking advantage of reduced prices.

The last piece of interestingly optimistic market data involves our home inventory. Over the last six months, the number of homes for sale has decreased dramatically.

Although the Big Bear market usually sees a tapering off in inventory come winter, this year was more like a plummet than a decline. As a result of bank owned home listings staying steady and sales increasing, inventory has dropped off significantly. Another trend that has helped promote a declining inventory is the fact that home owners who are not in distress, but who would otherwise prefer to sell, are choosing to wait to do so until the market rebounds.

The theme of 2009 seemed to be looking for the end of bad news. By years end, I think most would agree we’d seen that to a certain degree. 2010′s theme is shaping up to be about looking for signs of good news.

With number of sales up, prices bouncing off the bottom in the last quarter, and with inventory being at the lowest it’s been in about 4 years, I’d say we’re well on our way to having a much better year than ’09.

Sales prices in November were mixed, as the median price went up 8% from $206,500 to $222,450, while the average price went down 11% from $294,916 to $262,153, when compared to last month’s sales. 

The number of sales are down 6% this November, from 94 last month to 88 this month. This decline is expected and is a seasonal occurence. 

When comparing November 2008 to November 2009, sales are up from 50 to 88, for an increase of 76%.  But prices still show year-to-year declines, with the median home price falling from $240,287 to $222,450 resulting in a 7% drop. The average sales price fell from $329,953 to $262,153 from November 2008 to November 2009 resulting in a 20% drop in values. 

As far as year-to-date sales, sales so far in 2009 are up almost 30% over 2008, while the average and median prices have both fallen 17% respectively. 

Overall, the market seems to be continuing down the road of stabilizing. Price declines have slowed and shown signs of increase over the past few months while sales remain significantly higher than last year. 

Although there has been a record number of Notices Of Default filed suggesting more foreclosures will hit the market, it seems like banks are patiently controlling releasing these foreclosed homes onto the market for sale. Many of these homes in default are modifying their loans as well, successfully preventing foreclosure. 

The competency with which the banks have controlled the flow of foreclosures suggests to me that prices may have stabilized more than many had predicted in wake of the increases in Notices Of Default. So long as the banks can financially control inventory and work with homeowners in modifying their mortgages, we should see continued stability in the market.

If you have any questions regarding the Big Bear real estate market, or are looking to buy or sell property in Big Bear, please don’t hesitate to contact me: 

Paul Zamoyta ~ (909)557-8285 ~ info@Zamoyta.com

www.Zamoyta.com ,www.BigBearLakefrontRealEstate.com

The number of residential home sales as reported in the Big Bear MLS for October 2009 were 78 – almost identical to the 77 homes that sold in Big Bear in October 2008.

What weren’t  identical were the prices.

When compared to October 2008, the average sale price for a Big Bear home fell 9% to $312,482, while the median price fell 15% to $216,440.

Year to date, sales are up 22% while the average sale price of a Big Bear home has fallen 16% and the median price has fallen 18%.

Compared to last month, the number of sales were down 17%. This slide in number of sold homes is normal for this time of year as sales regularly decline after the busy summer buying season. Although sales were down, average and median prices saw big increases when compared to last month, with 30% and 17% gains respectively.

Once again, although the price increases and declining inventory suggest a recovery, the increasing Notices of Default suggest the market may have a bit more to go before a true rebound occurs. (See October 13th post.)

A response from my last post asked if I could quantify the number of foreclosures potentially hitting the market over the next few months. There is no way you can definitively know how many foreclosures will hit the market, but you might be brave enough to make some assumptions by looking at the Notices of Default that have been filed in Big Bear.

A Notice of Default (NOD) is usually filed by a lender after three months of payments are missed. Filing the NOD is the first step the lenders take in getting the foreclosure process going. Usually, the quickest a lender can foreclose on a property is about 4 months after the NOD is filed. Due to the backlog of foreclosure filings, it is not unusual for it to take 5-6 months or even longer for a lender to complete the foreclosure process.

Once the foreclosure has been completed, it usually takes anywhere from 1-6 additional months for the property to be listed on the market, as lenders oftentimes have work to do to prepare the home for sale.

Overall, in my experience, I would say that it currently takes about 7-9 months for a home to hit the market from the date the NOD is filed.

If you look at the graph above, you’ll see that towards the end of last year, there was a drop in the number of NODs being filed. That dip would coordinate with the relative drop in number of foreclosures we have recently seen come on the market here in Big Bear.

Shortly thereafter, you see a sharp increase in NODs filed occuring in the spring of 2009 and the high filing numbers have continued at that high level through today.

Many are predicting that the homes represented by the spike in NOD filings last spring should be hitting the market soon and continuing over the next 6 months to a year. But the great unknown is how many of these distressed homeowners will successfully modify their loans to where they can keep their properties.

If there is an increase in distressed properties, but an equal increase in successful loan modifications, the prediction of more foreclosures may not materialize.

Although many are hearing that loan modifications have become more common, I think most experienced real estate agents in Big Bear feel that we will see a significant increase in the number of foreclosures in the last quarter of 2009 into the first half of 2010.

Again, no one can know for certain what will happen. But if you’re interested in buying or selling in the Big Bear area, all you can do is keep educated as to what is happening in the market and find a good agent to help guide you in making the right decisions.

One factor that many think will be a determinant of when the Big Bear real estate market will turn definitively for the better is when the number of bank owned homes and homes being sold as short sales start to lessen.

So far in 2009, we’ve seen distress sales make up anywhere from 34% to 62% as noted by the graph below.

As you can see, about 40% of our overall sales in Big Bear have been of either short sales or bank owned properties. Most real estate experts agree that the current real estate depression will only show signs of a definitive recovery once all the distressed homes have worked their way through the market.

Distressed sales have been responsible for the majority of market value declines, as banks have undercut eachother pricewise trying to get these toxic assets off their books. Although property values in Big Bear have seemed to have leveled off (at least for now), it is hard to imagine values making any substantial upward movement until distressed property sales become less common.

The big questions is, When will this happen?

Once again, it seems like it will depend on whether banks are willing to work with distressed property owners to keep them in their homes. Currently, the number of Notices of Default are at an all-time high, but word on the street is that lenders are getting more lenient in modifying loans. The more property owners who are able to keep their homes, the fewer the foreclosures, and the sooner we see things rebound.

If you couple increased loan modifcations with recent signs of recovery for the overall economy, and one could make the case for real estate setting up for a turn.

But if there’s one thing we should have learned by now, the only certain thing about the real estate market is uncertainty itself! So stay tuned to what’s going on in the Big Bear real estate market and have a good agent with whom to share your home ownership goals and when the time is right, you’ll be much more likely to make the right move.

The Big Bear real estate numbers are in for September and things continue to look better.

Regarding the number of home sales in Big Bear, this September saw a 9% increase in sales compared to September of 2008. On a month-to-month basis, sales were up 16% from August to September of this year.

Prices of homes in Big Bear showed an 8% decline in average sales price comparing September ’08 to September ’09. Looking  from a month-to-month perspective,  the average sale price from August to September of this year was stable, showing an insignificant  .3% drop. Seems like prices are finally showing strong signs of stabilizing!

Looking at year-to-date numbers, the number of Big Bear homes sold so far this calendar year are up 25% compared to 2008. Comparing year-to-date average sales prices, values have shown an overall 17% decline in the calendar year 2009 when compared to 2008.

With inventory continuing to be at the lowest levels in the past few years, sales continuing to be strong compared to last year, and prices stabilizing, things are looking better. Some would say there are “signs of life”.

The big unknown remains the distressed property market. The fact remains that the number of notices of default have not slowed down. Unless the banks show significant improvement in modifying people’s loans and/or the economy improves substantially, it only stands to reason these homes will hit the market as foreclosures or short sales in the near future. So long as that happens, it is difficult to imagine prices making any significant gains, and in the worst case, we may even see further declines.

If I – or anyone else for that matter - only had a reliable crystal ball!

Written by Paul Zamoyta ~ info@Zamoyta.com ~ 909.557.8285

As one would expect with falling prices, there has been a distinct shift in the percentage of homes sold in Big Bear at the lower price range. Reviewing the graph below, you can see that sales under $100,000 have seen a huge jump from 2008.

As well, you can see that at about the $200,000 price range, the number of homes sold slips to below that of the 2008 levels. In short, we’ve seen a significant increase in lower end sales – under 200K - while the upper end sales have seen a significant slowdown.

When the market downturn began, the lower end homes were the first to see price declines. As of late, with the lack of sales in the upper end market, it seems like the higher end price range is headed towards a continued adjustment in values.

One reason for such significant slowing in the upper market is the difficulty in qualifying for jumbo loans (loans over $417,000). As well, jumbo rates are currently 1.5-2% higher than conforming rates (loans under $417,000). Another reason for such a significant slowing in the upper end market is that many buyers feel they should lean towards the conservative side price-wise in purchasing a second home.

Already we have seen some Big Bear REO’s in the higher price ranges selling for 40% less than they were purchased for. With slowing sales in the upper end, I would imagine deals like these will become more common. If you’re looking in this price range, it is likely there will be some nice values to be had over the next few months.

(Interested in buying lakefront property in Big Bear? Go to www.bigbearlakefrontrealestate.com .)

Time to take a look at where we stand in the calendar year 2009 compared to where we were this time last year. (All the following numbers are from 1/1 through 9/6 of the year stated.)

Number of home sales – 448 in 2008 compared to 618 in 2009 – 38% increase.

Average sale price – $336,408 in 2008 compared to $268,059 in 2009 – 20% decrease.

Median sale price – $260,000 in 2008 compared to $198,000 in 2009 – 24% decrease.

Average price/sf – $223 in 2008 compared to $164 in 2009 – 26% decrease.

Median price/sf – $214 in 2008 compared to $156 in 2009 – 27% decrease.

Reviewing these numbers, we see that sales are up considerably, but pricing across the board in almost every measure is still showing a significant decline.

The good news is that looking over the last few months, prices are starting to stabilize. In fact, late spring into early summer, we saw three months of appreciation in median prices. We have seen prices settle again since then, but there is evidence that depreciation is slowing from last year’s historic free-fall in values.

The number of homes sold rose 17% in August of 2009 when compared to August 2008, as the median sale price and average sale price are down 37%  and 23% respectively.

The price per square foot of sold homes also showed a significant decline when compared to August of last year, with the average price per square foot dropping 24% and the median price per square foot falling 27%.

When comparing July 2009 to August 2009, the number of homes sold fell from 86 to 70 properties, representing a 19% decrease in sales. The average price also saw a month to month decrease, falling from $281,784 in July to $254,444 in August,  representing a 10% decline in values.

After three consecutive months of median price appreciation earlier this year, we have seen a couple of months where prices have settled back down. This may be the predicted “bumping along the bottom” that many prognosticators predicted.

I would imagine that we will continue to see inconsistencies in price direction until the majority of foreclosures work their way through  the market.  When that will be will depend on a lot of things, including the overall condition of the economy and how successful efforts are to modify homeowners loans.

This July saw a total of 75 sales of Big Bear homes compared to 63 sales in July of 2008, resulting in an overall 20% increase in number of units sold.

As far as pricing, the average Big Bear home sold for $286,461 this July, compared to $277,250 in July of 2008, for a 3% rise. The median sale price saw a remarkable 15% improvement, as the median price jumped from $205,000 in July of 2008 to $235,000 this July.

Although these numbers are relatively volatile due to the small sample size, they certainly suggest welcomed movement, at least temporarily, in the upward direction.

When comparing year-to-date numbers in the Big Bear real estate market, although the number of sales has definitively trended upwards, you can still see the huge hit that pricing has taken over the last 12 months.

Year-to-date, compared to the same period in 2008, we have seen a 23% increase in the total number of Big Bear homes sold, but the average sales price of a  Big Bear home has fallen 16% and the median price a comparable 15%.

Looking back over the year-to-date reports for the last few months, we are seeing a definitive slowing down of depreciation. Considering this, along with the rising median and average sales prices, the Big Bear real estate market is certainly starting to look a lot better.

Would I call it a recovery yet? I still hesitate to do so, especially with 11% + unemployment. But I do think that we have entered the “bump-along-the-bottom” phase that many have suggested would happen once things leveled out.

If you’re a prospective buyer that has been on the fence, I am becoming more confident in suggesting that now may be the time to strike before these historic opportunities begin to fade. I would imagine a good deal in today’s market may be the best deals we will see before the Big Bear real estate starts a consistent recovery.

Written by Paul Zamoyta, info@Zamoyta.com, (909)557-8285