Trying To Time The Real Estate Market
October 13th, 2008 categories: Big Bear Buyers, Big Bear Market Conditions, Big Bear Real Estate News
Whether it is with selling or buying, everyone would like to time the market. A seller always wants to sell at the peak while a buyer always wants to buy at the bottom. Who wouldn’t? But the reality is that timing the market happens more by luck than strategy. By the time you know it is the bottom, or top for that matter, it will have already passed.
Below is a quick video I did this morning talking about clients who want to time the market in the Big Bear purchase and what I believe they should consider.
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Real Estate Reports Should Be Like the Weather Reports….Local.
October 12th, 2008 categories: Big Bear Buyers, Big Bear Market Conditions, Big Bear Real Estate News, Big Bear Sellers
If you turn on any national news channel in the morning before work you will always see the weather forecast for the day. And sure enough, when they go to the “your neck of the woods” weather report, you will see your local weather news person give a quick 15-20 second local weather report. Seems to be just the way it is with weather reports.
But then, the next segment that comes on talks about the national real estate market…..is there such a thing? No local reports as with the weather, just one report that is supposed to encompass every real estate market in the nation.
So, if I am getting this right, what is happening with real estate in New York or Florida or Wisconsin or Washington is also happening in California? Or better yet, what is happening in Northern CA is also happening in Southern CA? What about my hometown of Big Bear Lake, which is predominately a second home resort town, it must be exactly the same as all the primary home markets that surround it, right?
I think we all know that these statements are just not true. If I am traveling up to Mammoth, CA or Newport Beach, CA for the weekend, I am going to check the weather for those areas before I go. What the weather is doing in my hometown of Big Bear has no bearing on those areas. The same goes for the real estate market. Prices, demand, supply, financing, market nuances & customs are going to be different from area to area. Just as there is not a national or state weather temperature, nor is there a national real estate market.
We have heard a thousand times “Real Estate is Local!” What does that mean? I guess the bigger question is why don’t people understand that? Most of the buyers and sellers for Big Bear properties come from areas throughout Southern CA. Many of them seem to think that the Big Bear market is performing exactly the same as their primary home market of San Diego, L.A., Orange County, or Riverside. If three foreclosures sold in Santa Barbara (I don’t know if they even have foreclosures there) this weekend, it would have no effect on the Big Bear real estate market. The fact is that they are all totally different markets driven by very different circumstances.
Quite simply the values and market conditions of real estate are directly related to the local economic & demographic conditions of that area. Now, many people will have you believe that real estate is just plain bad right now. For a lot of areas this may be true, but for many others it is not.
The key point is that in order for one to determine how a particular market is performing, one needs to look at the market data for that area.
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What You Must Know Prior To Buying A Bank Owned Home In Big Bear
October 10th, 2008 categories: Big Bear Buyers, Big Bear Real Estate News
I sat down with Israel Barden, our REO & bank owned expert with Coldwell Banker here in Big Bear Lake, for a quick video discussion on the 3 most important things buyers in this market need to understand about buying a bank owned property.
Please enable Javascript and Flash to view this Viddler video.There are many factors to consider when buying a bank owned property. If you are thinking about a bank owned purchase, be sure to talk with your real estate agent and lender first. A bank owned purchase can be incredibly different than your everyday sale. Issues ranging from financing, price flexibility, disclosures, liability, closing costs, contingencies, and others are bound to come up during the purchasing process.
If you have any questions, or if you want to add some items to this list, be sure to add comments here or contact me.
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Big Bear Home Sales 2008 - 2nd & 3rd Quarters
October 9th, 2008 categories: Big Bear Market Conditions, Big Bear Real Estate News
Below are the details on home sales in Big Bear for the 2nd and 3rd quarters of 2008. See the 1st quarter home sales here. Why am I posting the 2nd and 3rd quarters together? Because I was lazy (or busy) in July and did not post the 2nd qrt. numbers then :).
2008 - 2nd Quarter #s
| Year Q2 | # of Home Sales | Median Sales Price | Days on the Market | List Price to Sales Price Ratio |
|---|---|---|---|---|
| 2008 | 179 | $282,590 | 132 | 94% |
| 2007 | 196 | $339,450 | 122 | 95% |
| 2006 | 308 | $305,000 | 72 | 97% |
| 2005 | 473 | $277,000 | 68 | 98% |
| 2004 | 492 | $216,000 | 81 | 98% |
| 2003 | 371 | $180,000 | 49 | 97% |
2008 - 3rd Quarter #s
| Year Q3 | # of Home Sales | Median Sales Price | Days on the Market | List Price to Sales Price Ratio |
|---|---|---|---|---|
| 2008 | 204 | $232,500 | 128 | 94% |
| 2007 | 206 | $299,900 | 126 | 95% |
| 2006 | 291 | $320,000 | 85 | 96% |
| 2005 | 537 | $295,000 | 54 | 98% |
| 2004 | 540 | $245,000 | 64 | 98% |
| 2003 | 451 | $194,000 | 62 | 97% |
In my opinion, these are some key points to take from the data -
1. Obviously, the numbers of homes sold and the median price in Big Bear continue to drop from the highs of 2004 & 2005. There are stories I hear out there about the market picking up. While it may be leveling off, I don’t know that it is picking up. 20-30% of the total sales currently are bank owned, not the best kind of increased activity if you are looking for prices to increase, at least in the near future.
2. The number of home sales during the 2nd & 3rd quarter of 2008 is very close to the same two quarters of 2007, only 19 short. The first quarter numbers for home sales in 2008 were 102 less than the 1st qtr. of 2007. This could suggest a leveling off from the drop. We’ll see.
3. The median price today is below the median price of 2004 3rd qtr. This suggests that the value of homes in Big Bear now are near the same values they were in mid to early 2004. It is still close to $40,000 higher than the 3 qtr. level in 2003.
4. The average days on the market for the properties that are selling in Big Bear went down, not up, in the 3rd qtr. of 2008 as compared to the 2nd qtr. It was not a huge number but the bank owned & REO properties that are selling might be helping to lower this number. They tend to be priced very aggressively and sell quicker than your normal, organic seller.
5. The list price to sales price ratio can be misleading. The list price at the time of sale could have been the original, or maybe not. If the property was reduced during the listing period, then the list price to sale price ratio would be a lot lower. My guess is that if you were to take the original list price of these sales, and compare them to the sale price, the ratio would be closer to the 90% mark. Tough to tell exactly though.
I am sure there are more nuggets we can pull from this data. Let me know what you think or if there are other stats you think would be interesting to know.
* Information courtesy of the Big Bear MLS. This update includes MLS data from areas including Big Bear Lake, Big Bear City, Moonridge, Fox Farm, Sugarloaf, Erwin Lake, Fawnskin & Baldwin Lake. It does not include data from areas in the Big Bear MLS that are located outside of the Big Bear area. Information is deemed reliable but cannot be guaranteed.
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Bank Owned Properties - What Sellers Need To Learn From Them
October 8th, 2008 categories: Big Bear Real Estate News, Big Bear Sellers
Bank owned properties dominate the headlines in today’s real estate world. Rightfully so, they are setting the pricing standards in most areas while comprising roughly 20%-70% of the current closed sales for many areas in our Nation.
Here are a few recommendations for sellers that want to sell in this market and what they can learn from their bank owned competitors.
Please enable Javascript and Flash to view this Viddler video.The key point here is that banks have to sell their properties. They are willing to take much less than the competition to get the sale done. If you do not absolutely have to sell your Big Bear property, then right now is not the time to try.
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List Price, Sales Price, and Market Value.
October 7th, 2008 categories: Big Bear Buyers, Big Bear Real Estate News
A lot of buyers today get caught up in what a property is listed for and how much they can get off of the price. They think the more off the price they can get, the better value they are getting. While this might be true in some cases, it can be false in others. Buyers should be more concerned with what the value of the property is, not what it is listed for. Take a look at the video below for more details on a specific example I came across.
Please enable Javascript and Flash to view this Viddler video.(Note - if you are viewing this on an email or feed reader, please click the title above to see the video posting as the video may not be showing up)
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