I believe it could be.
The current state of the real estate market in Big Bear reminds me of a scene in the movie, “The Perfect Storm”.
Near the end of the movie, after the fishing boat and its crew battle huge waves and horrible weather, things clear up. They think they made it through. But, the storm comes right back even stronger and eventually sinks the ship & crew.
This is similar to the current state of the real estate market in Bear. We’ve seen rough waters over the past 2-3 years, and things appear to be clearing up – sales are picking up, prices are leveling out, and inventory is going down.
But there are some big clouds on the horizon in the real estate world.
Foreclosure filings are at the highest levels we’ve seen.
What is going to happen to these properties? I suspect nearly all will be coming on the market over the next 12 months, and that’s many more than we’ve seen so far. I believe these will continue to put downward pressure on prices, even with the huge drops we’ve already seen.
I do anticipate that this will have a bigger effect on properties priced over $350,000 as they are getting less activity currently. These properties make up 60% of what is currently for sale, yet only 22% of what is selling.
Conversely, I expect this will have less impact on those properties priced under $350,000, as they have seen a big drop in prices already, and there remains strong demand from buyers today. They make up 78% of what is selling yet only 40% of what is currently listed for sale.
By no means am I saying that this is the end of the world for real estate in Big Bear, or all sellers are going to drown. I am not trying to promote doom and gloom.
But, to deny or not be aware of what we are possibly heading into seems foolish to me.
What do you think?
Related Articles
So, We’ve Hit Bottom In Big Bear……..Not So Fast!
Bank Owned & Short Sale Homes Taking Market Share In Big Bear
October 1st, 2009 at 8:14 am
Here’s another article I found today. It’s not bad news or good news, just the news that people need to know about.
http://activerain.com/blogsview/1262848/mortgage-delinquencies-the-coming-storm
September 21st, 2009 at 8:08 pm
Another leg of the stool – the out of control spending guarantees a major (3 pts+) increase in interest rate – even a 2% increase is a roughly 20% increase in debt service – an guaranteed 10-15% decrease in buyers qulaifying at a given level -
September 19th, 2009 at 8:31 am
Here’s an article from CNN along the same lines that was posted after my blog post.
http://money.cnn.com/2009/09/10/real_estate/august_foreclosures/index.htm?postversion=2009091011
Jim, I am not looking at the current bank owned properties and those that are on the market right now. Rather, like a storm and what is coming, I am looking at the huge amount of properties in Big Bear that lay in pre-foreclosure status that will become bank owned listings. See all of my posts over the last 5+ month on the foreclosure numbers. There’s no denying that these are going up.
Regardless, even if there are buyers out there, ready to gobble them up, it will keep the real estate market in Big Bear depressed for a while. That is the main point. Anyone looking for prices to start rising and everything to be better is not acknowledging these numbers.
The Perfect Storm? I guess it remains to be seen.
September 14th, 2009 at 12:29 pm
Where is the Perfect Storm? As of 09/14/09 on our MLS there is only ONE Bank Owned Property on the market for more than $350,000 in Moonridge, Fox Farm and all of Big Bear Lake. What does this say about our Market? That there are hundreds of Bank Owned Properties just waiting to be “dumped” on the market? Or does is say that there is so much demand in our Resort Market that smart money has been and will continue to buy underpriced properties in the better areas? You decide
September 10th, 2009 at 1:35 pm
You might be in the eye of the storm, once the edge returns, the ride could get rough.
Aloha,
Keahi
September 9th, 2009 at 9:27 am
Agreed that a slow down in the drop is positive. But, to think that things are just going to stay better is not realistic based on these numbers.
September 9th, 2009 at 9:26 am
True, foreclosures are going to continue for quite a while, but at least a little recovery can be seeing so that is positive, even though we know the sky is gray