Patience is the key to getting a "great" deal when buying a property in Big Bear.
In this real estate market, those who have the ability to wait, be patient, and let things draw out as they may are the ones who get the best buys when it is all said and done.
Every buyer wants to get the best deal possible but very few have the patience necessary when it comes time to buying a house. In today's age of text & instant messaging, twitter, and the wealth of information at your fingertips, actually having to wait for anything these days is a rarity.
The most difficult part of patience for a buyer today is when they find a property that just hits the market. Typically the seller is going to be a lot less negotiable during the first couple weeks or months on the market. They think they've got something special, and sometimes they do and the property sells fast.
More times than not though, the property is priced too high and the property will sit on the market for at least 3-6 months or more. This is where patience comes in for a buyer. Knowing that a property is priced too high for the market and having the ability to wait for the seller to come down and get more realistic on the price is easier said than done.
The more patient a buyer is, the more options they will have as well. In today's market of falling prices, more foreclosures, bank owned properties, and short sales, it only makes sense for a buyer to be patient and see all of their options.
Additionally, I have seen several buyers in this market use patience to their advantage in the offer process. They made offers based on what they wanted to buy the property for and held there, patiently and without a lot of emotion. At first, the sellers balked and said no. Eventually, sometimes 45-60 days later, the seller came back and met their terms, and the buyer ultimately got the property.
Patience plays a big role in getting the right property at the right price. Be sure to keep this in mind if you are looking to buy a property.
"He that can have Patience, can have what he will" -- Benjamin Franklin
Home buyers today are of the "Bank-Owned/REO Mentality." They want to buy something with that kind of price tag, regardless of who owns it.
I came across an article from CNNMoney that really hits home on what is going on in the current housing market. If you want to sell a home in this market, no matter how much it hurts, you need to price your home like a bank-owned or REO property.
That is your competition.
The tough part about this is that bank-owned or REO properties are priced 20-40% less than the non-REO or bank-owned properties.
The first and last paragraphs of the article spell it out pretty clearly:
Selling a home in this market is hard enough. Competing in a neighborhood flooded with foreclosed homes that are heavily discounted is nearly impossible.
For desperate sellers, that means keeping up with highly-motivated banks and steeply-falling prices - no matter how much it hurts.
Sure, not every seller is going to be desperate, I get that. But if you are not desperate, or willing to price your home like you are desperate, it is not the time to sell.
Over 4 feet that past 2 weeks and my back is feeling it. To put this in perspective, here are two photos of my listing for sale at 42235 Heavenly Valley, Big Bear.
Summer shot......
And after the storm....
If you are planning a trip up to Big Bear this time of year, it is always a good idea to carry chains with you, regardless of whether you have 4-wheel drive. It is very common for the Highway Patrol to be checking cars as they come up the hill and they have no problem turning people around who don't have chains in/on the tires.
You should also check to make sure the roads to Big Bear are open. With lots of snow comes lots of driving frustration, be careful.
Here are some recommended sites to check on road conditions & chain requirements.
If you are thinking of buying or selling a home in Big Bear, you may want to take a look at the absorption rate of homes that are currently for sale. Knowing the absorption rate is a good way to become more informed on the current real estate market conditions in a particular area.
There is an easy to understand article here describing what the absorption rate is and what it means for the real estate market. In simplistic terms, it is a mathematical equation that tells the amount of time it will take for a specified set amount of properties to be absorbed under current real estate market conditions.
To get the most accurate reading for the Big Bear real estate market, you take the number of properties sold in the past month and divide that into the number of properties currently on the market for sale. Some other ways to figure out absorption rate include looking at it from a weekly and yearly basis. I find the monthly time frame to be the most representative and therefore figure it by price range & location.
You can also tinker around with this by looking at different price ranges, locations, beds & baths, features and so on. The more you tinker, the more accurate your calculations should be for that type of property. If you wanted to know the absorption rate of 3 bed, 2 bath homes in Moonridge or Fox Farm for example, you could.
Generally speaking, the higher the number, the more of a buyer's market and vice versa for a seller's market. An absorption rate over 6+ months would be considered a buyer's market, 3-5 months a normal market, and under 3 months a seller's market. Based on this, we have not seen a seller's market in 2-3 years.
That said, there were a total of 50 residential sales in Big Bear during the month of November 2008. Currently, there are 1044 residential properties for sale, which translates into an absorption rate of 20.88 months. This means it would take nearly two years for the current inventory on the market to be absorbed, assuming nothing else comes on the market for sale.
See the breakdown by area & price range below.
Absorption Rate By Price Range
Price Range / Residential Properties On The Market / Residential Sales Last Month / Absorption Rate - # Of Months It Will Take To Sell
$300,000 & below
505
30
16.83
$300,001 to $500,000
294
12
24.5
$500,001 to $800,000
133
4
33.25
$800,0001 to $1,000,000
38
1
38
$1,000,001 & above
74
3
24.67
Totals
1044
50
20.88
Absorption Rates By Area
Area / Residential Properties On The Market / Residential Sales Last Month / Absorption Rate - # Of Months It Will Take To Sell
Big Bear Lake West
37
0
N/A
Big Bear Lake Central
112
4
28
Big Bear Lake East
89
4
22.25
Fox Farm
82
9
9.11
Moonridge
178
5
35.6
Whispering Forest
20
0
N/A
Fawnskin
40
1
40
Big Bear City
222
13
17.07
Sugarloaf
122
8
15.25
Erwin Lake
93
5
18.6
Baldwin Lake
42
1
42
Lake Williams
7
0
N/A
Totals
1044
50
20.88
As with the month of October 2008, we can see that properties priced under $500,000 are selling the best while those $500,000 and up are not faring so well. In fact, there were only 8 sales of residential properties sold in the whole month of November in the $500,000+ price range. When you have 245 homes for sale in Big Bear that are priced over $500,000, that means the absorption rate is 30.625 months.
If you are looking to buy a home in this upper price range, make sure to be diligent as there should be a lot of options and a good deal can be found. If you are selling a home in the $500,000 range, you may want to give some thought to having your home priced under $500,000 as opposed to just over it.
It should be noted that all of the $1,000,000+ sales for the month of November 2008 were located in the Castle Glen area of Fox Farm. Sales there ranged from $1,150,000 to $1,600,000.
From a location perspective, the properties in Fox Farm, Sugarloaf, Erwin Lake, & Big Bear CIty sold better as compared to Big Bear Lake, Moonridge, Fawnskin, Lake Williams, & Baldwin Lake. These numbers are a little surprising in that Big Bear Lake & Moonridge are generally considered more desirable. It just shows that the buyers these days are driven more by price and value than location. They are buying in lowered priced areas currently.
These numbers do change on a monthly basis. One month a particular area may perform better than others and then not so good the following month. Click here if you are interested in seeing the absorption rates for Big Bear from some of the previous months.
If you are interested in how the real estate market in Big Bear is performing, be sure to sign up for my RSS feed or email newsletter.
Selling a home in Big Bear should be easy, at least according to Andy Rooney.
I remember seeing this video last year and laughing when he reviewed all the self help books he has received over the years. When he gets to the "Tips on selling a House" book, around the 1:10 part of the video, he gives his simple, yet very true, advice, "you don't need 1001 tips on how to sell your home, just lower your price and your home will sell."
Seems simple and easy enough, right?
Now I understand that not everyone can lower their price enough to sell. They may owe too much or don't want to accept a lower price. That is fine, just don't try to sell right now.
In this market, price is everything. Buyers are value shopping more than ever. You may have the nicest house in the area with all the upgrades, but with all due respect, it does not matter. You need to have that, AND the lowest price. Anything else and the buyers are going to pass on your property.
It is just that simple!
Buyers today are of the bank owned, short sale mentality. They want to buy a property that has a bank owned price tag, regardless of whether it is owned by the bank or a distressed sale.
Sellers must realize that their competition in not necessarily their neighbors who are trying to sell or who have already sold, but rather it is all of the negative economic news coupled with the bank owned & short sale properties currently available. Home buyers today are listening & watching.
If you are considering selling your Big Bear home, take it from Andy Rooney and get your price in line.
The Castle Glen neighborhood is one of the most sought after locations in all of Big Bear Lake. Generally referred to as a subarea of Fox Farm, Castle Glen is known as the area "up on the hill" above Stater Bros. It also borders Hwy. 18 along the Baker Pond section of Big Bear Lake.
History of Castle Glen
Castle Glen, which consists of a total of 245 parcels, was first developed at the end of 1998 in the hilltop area previously referred to as 'Rebel Ridge.' Lot prices in the first phase ranged from $39,900 up to $69,900. As the second, third, and final phases came in, prices for the top lots in the area were well over $200,000. Today, the subdivision is approx. 70% built out. Most of the homes are newer log or mountain style, with sizes ranging from 1,800 sqft. to over 5,000 sqft. Lot sizes in area range from 10,000 sqft. on up to 40,000 sqft., nearly an acre.
What makes Castle Glen so attractive?
Within walking distance to the lake and shopping, and just a short drive to the ski slopes and Village area, Castle Glen's central location is obviously one of the major upsides to owning a property in the area. There are plenty of other advantages as well. The subdivision sits perched high up on the hillside, making for some attractive views of the Big Bear Valley. In fact, some of the best lake, ski slope, and mountain views in Big Bear are found in the Castle Glen area.
The area is nearly surrounded by open space and eagle preserve. Many of the homes in Castle Glen back to this private space, adding to the quiet mountain ambiance. Upscale homes, pride of ownership, underground utilities, and protective CC&R's round out the best features that Castle Glen offers.
Real Estate Values in Castle Glen
Home prices in the area today range from the upper $400,000's to just over $2,000,000. The highest closed residential sale in the history of Castle Glen is $1,900,000, which two properties in the area share the honor of. Vacant lots in Castle Glen range from the mid $100,000's to the upper $400,000's. Generally speaking, the better the views and setting, the higher the land/house price is going to be.
Located in the first phase of Meadowbrook Estates on over 1 acre of heavily treed land with seasonal stream. This custom home built by Brad Lindley has 5 bedrooms, 3.5 baths plus loft/family room. Living room has vaulted T&G ceilings with log accents and floor to ceiling rock fireplace. Interior log chinking. Distressed wood flooring with slate and tile as well. Gourmet kitchen with Jenn-air appliances, cozy breakfast nook. Wonderful setting, just across the street from the National Forest. 3 car attached garage with workshop.
Home sales in Big Bear for November 2008 (50 total) dropped 25% as compared to the same month last year, and fell 32% from the October 2008 home sales number of 73.
This is a pretty big drop in sales activity, which is most likely a result of all the negative economic news over the past 60+ days. Typically, November & December are the best two months of the year for closings.
The median price for the homes sold was $240,287, down 6% from Oct. 2008 and also down 15% from Nov. 2007.The median price has been quite sporadic the past 6 months, ranging between $205,000 to $282,500. With such a limited amount of sales, any slight variation can throw these numbers around.
There remains nearly $85,000 difference between the median asking price of $325,000 and the median sales price of $240,287. If you are trying to sell your Big Bear home in this market, then it will require an aggressive price. If you are not priced aggressively, you will be one of the hundreds out there that are not selling. With an average of 56 homes selling per month, and over 1000 for sale, that is less than 6% of the total inventory. There is a lot of competition on the market, you need to be realistic!
If you absolutely do not have to sell your home, the don't even bother trying right now. It is just not the time for "giving it a try."
Bank owned & short sale properties made up a significant amount of the home sales in Big Bear in November, even more than Oct. 2008. Out of the 50 homes sales, 18 (36%, up from 23% last month) of the them were bank owned while 4 (8%, up from 5% last month) were short sales. That is a total of 22 homes, or 44% of the total sales in November, that were "distressed" sales. While the bank owned properties may be driving real estate prices downward, there continue to be buyers ready & willing to jump on the opportunity to buy them.
One important item to note, there are still buyers out there. It is common for the prospective buyers in this market to think that they are the only ones looking for property. They think they are special (like sellers used to think back in 03', 04' & 05'). The fact is, 50 people bought a home in Big Bear last month. The number may be less, but buyers are still out there. If you are looking at a property in Big Bear, and it is a "good deal," there is a good a chance that you are not the only one looking at it, even in this market.
Big Bear Homes Sales - November 2008
Month and Year/ # Homes For Sale/ Median Asking $/ # Homes Sold/ Median Sales $
Nov 2008
1032
$325,000
50
$240,287
Oct 2008
1078
$329,000
73
$255,000
Sept 2008
1109
$328,500
82
$224,500
Aug 2008
60
$282,500
July 2008
62
$205,000
June 2008
62
$247,500
May 2008
67
$290,000
April 2008
50
$299,500
Mar 2008
1082
$339,950
49
$288,000
Feb 2008
1049
$345,000
34
$249,950
Jan 2008
1094
$339,900
30
$283,250
Dec 2007
55
$273,750
Nov 2007
66
$282,500
Oct 2007
53
$310,000
Sept 2007
60
$269,750
Aug 2007
81
$310,000
July 2007
70
$293,450
June 2007
59
$350,000
May 2007
81
$309,900
April 2007
59
$340,000
Mar 2007
82
$311,100
Feb 2007
78
$302,500
Jan 2007
55
$325,000
Dec 2006
95
$320,000
Nov 2006
90
$392,000
Year to Date Sales (1/1/2008 - 11/30/2008)
Year/ # of Homes Sold/ Median Sales Price/ Average Sales Price/ Days on Market/ List Price to Sales Price
2008
621
$255,000
$330,724
135
94%
2007
734
$314,500
$407,424
123
95%
2006
1061
$319,300
$397.086
81
97%
2005
1647
$289,900
$356,108
68
98%
2004
1738
$230,000
$274,615
75
98%
2003
1481
$185,500
$226,535
58
98%
Big Bear Home Sales - Year to Date Numbers
Though we have seen a pick up in sales over the past two quarters, the number of homes sold this year is still 113 (16%) behind the 2007 numbers.2008 will go down as slowest year for sales in Big Bear in over 20 years.
The median sales price for 2008 is down 19% from the 2007 median, and the average sales price is down 19% from 2007 as well.
Year to date sales are off more than 64% from 2004 numbers though the median & average sales prices for 2008 are still higher than 2004 by 10% & 17% respectively. That is some good news to end with!
* Note: The charts above will be updated on a monthly basis. It represents single family home sales in the Big Bear area, including Big Bear Lake, Big Bear City, Moonridge, Fox Farm, Sugarloaf, Erwin Lake, & Fawnskin. Data courtesy of the Big Bear MLS. These numbers do not include raw land or condos nor does not include homes in the Big Bear MLS that are located out of the Big Bear area.
I don't mean to bash Zillow but they make it so easy sometimes.
Last time I checked, real estate prices in Big Bear are not going up. So you can imagine my surprise when I received an email last week from Zillow saying the Zestimate (read:value) for a rental property I own went up a staggering $20,000, or 11.4%, in the past 30 days. Huh?
Not a big deal, I am in the business and know what is really going on.
But I also received a call from a seller client about his property Zestimate going up $30,000, 11.5%, in the past month. I can hear you laughing right now. I was. The client wasn't though. His home has been on the market the whole year with many people & agents thinking it is overpriced and then he gets this.
It is the little things like this that make me lose confidence in Zillow, and evaluation sites like them. They are rarely right. I don't know many people who think the Zillow Zestimates are even close to the correct value when it comes to properties in Big Bear.
Seems to me if I was telling people this kind of stuff (read:garbage) I wouldn't be in business very long nor would I have many clients. I guess their advertisers must be happy with them.
One of the most common mistakes sellers make in this market is overpricing their home. It is human nature to think ours is better than the others. In real estate however, the numbers speak for themselves. The quote, "Liars figure, but figures never lie" seems appropriate.
The biggest risk with overpricing a home now is that every month the home in on the market the price moves farther down, sometimes 1-2% (for Big Bear) per month. Many times sellers start out too high, and then reduce only to see that they are still be behind the real price. They continue to chase the market down, never getting low enough to get ahead of it, in a what can be a frustrating process.
It is similar to missing a train, a train filled with the right buyers. And then moving on to the next stop, only to see the train has already left the next station. You need to get ahead of the train.
So what's the best way to get a property sold in this market? Get in front of the market from the very beginning. Get the the train station before the buyer train comes through.
Check out the video below for some more of my thoughts on this topic.
Like the video above? Check out some of my other video posts.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
;)
