I determine the absorption rate for Big Bear by taking the previous month’s sales in a particular price range or area (you can use others like bedrooms, square footage and such), and divide that into the total number of available properties in that same criteria set. This will give you the amount of months it will take for the market to absorb the properties for sale, assuming no other properties come on the market.
I prefer to use the previous month’s numbers rather than going back a full year or 6 months because the last month is more representative of the current market conditions.
Determining the absorption rate by going back 12 months can be done, though I feel it is outdated. Sales that happen 12 months ago really don’t show how the market is currently performing.
Why is this important? Knowing the absorption rate will tell you what the real estate conditions are like in a particular price range and area. If you are selling your property, this will help when determining your asking price. When getting ready to buy, this will help you become more informed on what segments of the market might provide you with more leverage.
Absorption Rate By Price Range
|Price Range||Residential Properties On The Market||Residential Sales Last Month||Absorption Rate – # Of Months It Will Take To Sell|
|$300,000 & below||472||20||23.65|
|$300,001 to $500,000||361||5||72.2|
|$500,001 to $800,000||144||6||24|
|$800,0001 to $1,000,000||36||2||18|
|$1,000,001 & above||67||0||N/A|
Absorption Rates By Area
|Area||Residential Properties On The Market||Residential Sales Last Month||Absorption Rate – # Of Months It Will Take To Sell|
|Big Bear Lake West||29||2||14.5|
|Big Bear Lake Central||96||5||19|
|Big Bear Lake East||84||2||42|
|Big Bear City||233||5||46.6|
By price range, the properties for sale in the price ranges of $300,000 and below, and $500,001 to $1,000,000 did the best last month. The properties priced between $300,001 to $500,000 and $1,000,001 and over did the worst in February.
By location or area, Big Bear Lake West & Central, along with Fox Farm and Sugarloaf had the best sales activity rates while Lake Williams, Baldwin Lake, Erwin Lake, Big Bear City, Fawnskin, Whispering Forest, Moonridge, and Big Bear Lake East did not perform as well last month.
The key to both of these is the amount of homes for sale. There are 361 homes for sale in the $300,001 to $500,000 price range and only 5 sales last ast month. Likewise, there were 204 homes for sale in Moonridge with only 4 sales last month.
If you are considering selling or buying in the Big Bear, make sure you know these numbers.
I provide Big Bear real estate updates all the time. Absorption rates are updated on a monthly basis, market updates on a weekly and monthly basis, and neighborhood updates for areas like Castle Glen, Meadowbrook Estates, and Big Bear lakefront properties from time to time.
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