Owners Sell Short Term Rentals, Causing Prices To Go Down

The second quarter’s statistics have shown that the Big Bear Real Estate Market is headed for trouble. Owners who bought cabins to turn into short term rentals are flooding the market with listings which is causing prices to go down. Remember when I told you that the short-term rental market would correct itself. That correction is here.  Here are a few statistics. 

First let’s look at the 0-$800,000 market where we had prices drop 9% from the first quarter of 2024.  Sales were up by 8, this was expected, the second quarter usually has higher sales than the first quarter. But listings were up by 98. Which is unusually high.  In July of 2022 there were 60 sales with 435 listings, in July of 2023 there were 63 sales with 394 listings, and in July of 2024 there were 62 sales with 530 listings.

 At one time in June in the Moonridge area we had 86 listings with 2 pending sales.  Then at one time in July there were 112 listings with 3 pending sales.  In the Snow Summit Area prices in the second quarter were down 40% from a year ago.  The second quarter statistics are out.  You should read the area statistics for your location.  Just click on the button on the left side of the newsletter under your location. 

What will this do to prices?  How long will this last?  This is going to cause prices to go down.  Now we not only have more listings, but we still have higher mortgage rates.  At least mortgage rates have dropped 1% this week, that will help.  The facts are that we will need more than a 1% drop in rates and we must get through this large increase in listings.  To do that we will need prices to go down.  How far down?  A good guess would be another 20% or back to where they were 3 years ago. 

How long will this last?  It will last until the short-term rental market gets back to a level that Big Bear can sustain.  Depending on how fast prices and interest rates drop will determine when we get back to a more normal market.  This could take another 12-18 months. 

Now let’s take a look at the $800,000 And Up.  So far, this market hasn’t been affected by the short-term rental market.  Prices have gone up 11% since last quarter.  Just remember that prices in this market can have wide swings.  To see how your area has done click on the button for your location on the left side of the newsletter. I really don’t expect this price range to be affected by the short term rental purge like the 0-$800,000 market is going through.  But it will be interesting to see if it gets dragged down by the price fall of that market.  Also there is an increase in listings in this market that might put some pressure on prices to adjust down. 

If you are thinking of selling give me a call or send me a text or email so that we can discuss your current situation.