Q3 Market Report - Over 800,000
Total Big Bear Area Luxury Market Trends: $800,000 And Over Price Range
The following stats are for the entire Big Bear Area. I have divided the Big Bear Area into 11 Sub Areas also to give you more detailed information on the area where your property is located. Like most of Big Bear, I have broken up the Total Big Bear Market into two segments Up to $800,000 property value and the luxury market over $800,000. This seems to be the most accurate price range to split the market. Every three months, I will post detailed quarterly market trend tables and graphs for each price range with a condensed but easy to understand examinations of the market stats. If you want to just get the short version you can skip to the bottom and read the Summary.
Market Prices
Table 1 (below) was created from the last three year’s annual average price graph (See Graph 1) of the Total Big Bear Area that consist of the 10 Sub Areas I have reported on. I will be using this table to analyze what is happening to the Real Estate prices in the $800,000 and up Luxury Market in the Big Bear Area. The table and graph have the parameters of: Price Range $800,000 and over, from October 2020 to September of 2022. Because of the volatility of the monthly numbers, which can have a difference of $400,000 or more each month, we will be using the annual averages for the $800,000 and up Luxury market to analyze how prices are changing in this price range not only in the Total Big Bear Area but also the eleven Sub Areas that make up the Total Big Bear Area. I have also printed the monthly graph (Graph 2) if you want to look at it.
In the Total Big Bear Valley Area the third quarter of 2022 continued with the price stability that we have been enjoying since October of 2020. What started out with an average price in 2020, of $1,301,000 and ended the two year period with an average price for 2022 that has brought us to an average price of $1,294,000 in September of 2022. For an decrease of $7,000. So overall you can see that the prices in the Luxury Market in Big Bear has stayed stable the last few years. To see how the prices in the sub areas have done please refer to Table 1 below, and you can also look at the write up for that sub area. .
If you want to know what your Big Bear cabin is worth in this price range, you have to get a more detailed market analysis that takes into consideration the number of Bedrooms, Bathrooms, Square Feet, Lot size, Condition and Views or location.
Sales vs Active Listings (supply and demand)
Table 2 shows what residential real estate inventory changes (Sales vs Active listings) have occurred for the Total Big Bear Valley Area on a monthly basis. These stats are compiled from Graph 3 using a parameter of: Price Range of $800,000 and over from the 2 year period October 2020 to September of 2022.
You can see from the last 2 columns that sales are down this quarter compared to last quarter by 11 and listings are up by 26. But when you look at this quarter compared to the third quarter of last year, sales are down by 28 in this quarter and listings are up by 110. This shows us that economy influences of higher rates and inflation are causing sales to go down which causes more listings on the market. More listings also causes the prices to go down as we saw in the pricing section. Given the current economic conditions I would expect the number of listings to go up and sales to continue to decline. This will also put pressure on prices to go down. Which is what you would expect in a declining market. This market has always kept the same price average for the last 5 years. It will be interesting to see if the pressure of so many listings, finally start to drive the average price down. It is also worth noting that during 2019 and before we were lucky to have 2 or 3 sales in three months in this price range for the whole Big Bear market. So overall this market is still in good condition.
Sales vs Expired Listings (strength of Sales)
Graph 4 In the Total Big Bear Area, the sales to expired ratios have been at a good level. With sales and expired listings close to a 1:1 ratio. There will always be expired listings. And a 1:1 ratio is considered a good ratio for a stable market. But in the last quarter we are seeing a 1:2 ratio of sales to expired listings which shows we are in a declining market the should drive prices down.
Summary
With these numbers we can say that the third quarter had a slight drop in price compared to the last few years. But I’ll say again you have to remember that this price range has wider price swings than the 0 - $800,000 market. By looking at graph 3 you can see that we can have a month to month swing of $400,000 or more for different months. The nice part is that sales stayed at a good level. For vacation homes in a luxury market this is a natural market.
We now know that we are headed into a very different market. Economic data for the fourth quarter and beyond is all pointing to a slow down in the market.
Expect changes in the graphs for the fourth quarter to better reflect the economy.
My opinion is that we are going to witness a more normal market. In order to get to that normal market prices may come down a little more. Cabins will be on the market a little longer. Sales will decline.