Big Bear Real Estate Settles Into A High Interest Rate Market
All Real Estate markets find their level, and it appears that Big Bear Real Estate has found where it needs to be given the current economic influences that control prices and number of sales in Big Bear. As I have talked about before this can change at any time with a large economic changing event, like a war, pandemic, or other major influence. Barring one of these large events it looks like we have settled into the economic adjustments of higher interest rates. A week ago, I held an open house on a single bedroom cabin by the lake. It was a slow weekend on the mountain, but I still had 6 couples come in. What I learned from my conversations with them is that they want to buy. But they either can’t afford to because they are priced out of the market by not qualifying for the higher payment or they are going to wait until rates go down. So basically, the demand for Big Bear is now controlled by interest rates. People aren’t afraid of losing their jobs (they will just get another one). They aren’t waiting for prices to go down. They know that prices have adjusted down. But even with the prices adjusting down, (more so in the 0-$800,000 market than the $800,000 and up market), the rates are so high that the lower prices haven’t made up for the high rates. Let’s break up the two price ranges of 0- $800,000 and $800,000 and up.
First the 0-$800,000 market. As we can see from the first graph prices from January 2022 were at a monthly average of $527,000. When you compare this to May of 2023 with a monthly average of $522,000, we can see that monthly average prices have stayed the same for the last 17 months. Of course, we have had different monthly average prices that have fluctuated about $50,000, but overall prices have found their level. When we look at the second graph, we can see there have been 3 phases of cabin sales. I won’t go into the first two phases in detail, but we can see that from January of 2021 to November of 2021 we averaged 120 to 150 sales per month. From December of 2021 to October of 2022, we averaged 70 to 90 sales per month. Our phase that we are in now from November 2022 to May of 2023 we are averaging 40 to 90 sales per month. If economic influences stay the same, we may stay the same in prices and sales until interest rates start to drop.
Second the $800,000 and up market. As we can see from the third graph, we have a normal price range graph for this market. Up and down by $400,000 per month, but with and overall average price of around $1,300,000 to $1,400,000. This hasn’t changed for five years. When we look at sales the fourth graph shows us from March of 2021 to July of 2022, we averaged 20 to 30 sales per month. From August of 2022 to May of 2023, we averaged 6-17 sales per month. Which of course is down from almost a year ago but you have to remember that 4 years ago we were lucky to get 2 to 3 sales for a quarter.
Overall prices have found their levels and sales have done the same and until interest rates come down this is going to be the market that we must work with.
If you are thinking about selling, call or email me for a detailed market analysis of your cabin to see how the current market will affect the sale.
