The Big Bear Report

May 2009

A Monthly Review of the Big Bear Real Estate Market

What's it going to take for buyers to understand that NOW is the right time to invest in property? Of course there are some buyers "sitting on the fence" for fear of losing their job (that's understandable). What is not understandable is why so many buyers remain on the fence from their fear of buying before the market "hits bottom". Today we know values are down and bargains are to be made. We also know that interest rates are currently at a 42 year low (4.6%). So what happens if values continue to drop and we "bottom out" but then interest rates go back up to 8% or 10%? So shouldn't it become a strategy rather than a guessing game.

The Local's Choice

One of the first questions that I ask a potential seller when I arrive at his house to discuss listing his home is, do you really need to sell? If they answer that question with no, then my recommendation is to hold on to the property. I'm sure that this sounds funny coming from someone who makes his living listing and selling real estate in Big Bear. That being said, before I take a listing I make sure that the seller really needs to sell the property and I also need to make sure that he can afford to sell the property. The reason I am asking these questions is that I need to make sure that the home owner is in a position to compete with the bank owned properties if he needs too.

The few bank owned properties that list in the Big Bear market are driving the market. I checked the Big Bear Multiple listing service this morning and out of 895 residential listings, 51 of them are bank owned. Just over 5 % of the current inventory is bank owned properties yet they account for 60% of the overall sales. The bank doesn't want the homes in their inventory, so when they list the property, they price them to sell. It is not uncommon to see multiple offers on these properties and they normally sell very quickly.

One of the benefits of the market being in decline is the mass exodus of bad agents. If you are a buyer or a seller, the odds are much better that you will get a competent agent to represent you. Unlike days past when an agent just had to sit by a phone to do business, today's Realtor actually has to work his or her tail off to be successful. That being said, you still need to be careful.

There are still part time housewife's out there who do a deal or two a year for some extra money. The checker at the local Von's still dabbles when an unsuspecting victim falls into the web. Even the meter reader for the electric company will try to pass as a full time professional Realtor. They are not doing their clients any favors. The market has undergone a massive upheaval and you can not do business the same way as five years ago. In Big Bear, bank owned properties make up 10% of the inventory and 40% of the sales. If your Realtor is not proficient in dealing with REO's, Short Sales, etc, you are asking for trouble.

I have an example from my last escrow to share with you. My clients put in an offer on a bank owned property listed by an office from out of our area. We did everything we were supposed to do and were just waiting for escrow to open. I have sold around 20 bank owned properties in the last year or so and there is almost always a delay in the bank opening escrow. So, after a week went by I wasn't too concerned. After almost two weeks went by, I became alarmed. I called and emailed the listing agent two or three times a day for three days without receiving a response. I finally had to call his broker and demand that someone who was competent be put in charge of the deal. I was given an assistant who seemed to have some idea of how things worked. Finally, after almost three weeks, I was emailed an extension agreement that stated we were requesting an extension due to the listing office opening escrow with the wrong company and not realizing it for two weeks. Two weeks? If I hadn't called the broker with my concerns the listing agent would have just coasted along obliviously and incompetently until our deal crashed and burned.

I also have experiences that are the exact opposite. I sold a bank owned property a little while back that was listed by Theresa Grant with Coldwell Banker in Lake Arrowhead. Like most bank owned homes, it took the bank longer than usual to open escrow, but everything else ran perfectly. Theresa made sure I received regular updates and her assistant was on top of everything. I got all the paperwork on time and done correctly. Because we both did what we needed to do , the transaction was very smooth and I was able to give my client excellent service.

If you are considering buying or selling, ask the Realtor you are dealing with some qualifying questions before you proceed. Make sure they are a full time, professional Realtor and not a part timer. Make sure they have a good, working knowledge of the local market. If you are planning on buying in Big Bear, it is a very bad idea to use somebody from L.A. or Orange County. If you are planning on buying a Bank Owned listing, it is especially important to use somebody who is experienced in selling them. The banks do thing very differently and a Realtor who doesn't know what they are doing can blow the deal or end up costing you a great deal of money.

Originally posted at www.bigbearilluminated.com

Big Bear All Area's / April 2009

 

· Total Residential Inventory in Big Bear as of May 1, 2009 - 896 units

· 130 Pending (in escrow)

· 57 closed sales with an average of 119 days on the market, price differential 95.56%.

• 28 Bank Owned with an average of 71 days on the market, price differential 89.61%

 

Moonridge Only / April 2009

 

· 154 Active listings

· 16 pending (in escrow)

· 13 Sold with an average of 125 days on the market, price differential 100.11%

• 6 Bank Owned with an average of 63 days on the market, price differential 100.11%

 

I can show you any home for sale in Big Bear.

Search the Big Bear MLS (Multiple Listing Service)

Search the Southern California MLS  (Multiple Listing Service)

Steve Hirschler

Associate, The Tim Wood Group

Coldwell Banker Mountain Gallery

42153 Big Bear Blvd.

P.O. BOX 6820

Big Bear Lake, CA 92315

stevehirschler@gmail.com

909 866-3481 EXT. 217 CELL 909 725-5889

Fax 909 866-3531

http://www.stevesellsbigbear.com

Follow me on Twitter

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Peviously Posted on "Ask An Expert, Big Bear Real Estate"

Sold YTD through 4/28/2009

Year to date through 4/28/2009 there have been 36 closed sales in Moonridge. There are 155 active Moonridge listings, and 21 pending in escrow. We have a 17 month supply of inventory at the current rate of sale. 13 of the 36 closed sales were Bank Owned and 3 were Short Sales.

The price differential shown above tells us that the homes in Moonridge that are selling, sell very close to list price. This isn't surprising to me, price is the most important factor in this market. When a home is priced correctly it will sell, it's really that simple. Knowing what price to list at is by far the most important decision a seller must make. List price should be based on market conditions and not a sellers perception or need. Banks are making this more apparent, they are not emotionally attached to homes. Bank owned properties are being priced based upon comparable sales, and nothing else. This is why the bank owned homes sold in Moonridge have an average of 70 days on the market and all of the other types of sellers are averaging 217 days in the Moonridge area. That's 3 times as long as the average bank owned listing.

When I look deeper at the statistics, the bank owned homes sold have a price differential of 100.11%, and the other types of sellers are at 93.46% of list. During the extra days on the market the sellers were chasing the market with price reductions until they finally get their homes price to match the market, and then like magic they sell! This is good, but not great. One thing that happens in this scenario is that the buyer sees that the home has been on the market 200 days and decides that the seller must be motivated to take less. This generates a lower offer, thus the 93.46% price differential.

First impression of value creates a sense of urgency in buyers, once lost the buyer assumes you are over priced. If not, why didn't someone put in an offer?

If you would like to discuss the Big Bear Real Estate market, please give me a call.

I can show you any home for sale in Big Bear.

Search the Big Bear MLS (Multiple Listing Service)

Search the Southern California MLS (Multiple Listing Service)

Steve Hirschler

Associate, The Tim Wood Group

Coldwell Banker Mountain Gallery

42153 Big Bear Blvd.

P.O. BOX 6820

Big Bear Lake, CA 92315

stevehirschler@gmail.com

909 866-3481 EXT. 217 CELL 909 725-5889

Fax 909 866-3531

http://www.stevesellsbigbear.com

Follow me on Twitter

Subscribe to "Ask an Expert, Big Bear Real Estate Blog"

Previously posted on "Ask An Expert, Big Bear Real Estate"