If you are thinking of buying or selling a home in Big Bear, you may want to take a look at the absorption rate of homes that are currently for sale.
Knowing the absorption rate is a good way to become more informed on the current real estate market conditions in a particular area.
In simplistic terms, it is a mathematical equation that tells the amount of time it will take for a specified set amount of properties to be absorbed under current real estate market conditions. I like to look at it from a monthly perspective, though is can be looked at from a weekly or yearly perspective as well.
Generally speaking, the higher the number, the more of a buyer’s market and vice versa for a seller’s market. An absorption rate over 6+ months would be considered a buyer’s market, 3-5 months a normal market, and under 3 months a seller’s market. Based on this, we have not seen a seller’s market in 2 years.
That said, there were a total of 44 residential sales in Big Bear during the month of December 2008. Currently, there are 931 residential properties for sale, which translates into an absorption rate of 21.66 months, about one month higher than November 2008. This means it would take nearly two years for the current inventory on the market to be absorbed, assuming nothing else comes on the market for sale.
See below for the absorption rate breakdown by area & price range for the Big Bear real estate market during Dec. 2008.
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||456||27||16.88|
|$300,001 to $500,000||253||8||31.63|
|$500,001 to $800,000||102||6||17|
|$800,0001 to $1,000,000||43||1||43|
|$1,000,001 & above||77||2||38.5|
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||39||3||13|
|Big Bear Lake Central||99||4||24.75|
|Big Bear Lake East||87||6||14.5|
|Big Bear City||204||6||34|
Properties priced under $300,000 are selling the best along with those in the $500,000 to $800,000 price range. Properties priced in the $300,000 to $500,000 price range, and those over $800,000 are not selling as well. In fact, there were only 3 sales of residential properties in the whole month of December in the $800,000+ price range. When you have 120 homes for sale in Big Bear that are priced over $800,000, that equals an absorption rate of 40 months.
If you are looking to buy a home in this upper price range, make sure to be diligent as there should be a lot of options and a good deal can be found. If you are selling a home in the $800,000+ range, you need to make sure you are the “best in show” from a price standpoint, and a visual appeal standpoint.
It is interesting to note that all three of the sales over $800,000 in December were lakefront properties. They ranged in price from $950,000 to $2,286,500.
From a location perspective, the properties in Fawnskin, Sugarloaf, Big Bear Lake West & East sold better as compared to Fox Farm, Moonridge, Big Bear City, Lake Williams, Erwin Lake & Baldwin Lake. Buyers these days are driven more by price than location. They will buy where the prices are the best.
These numbers do change on a monthly basis. One month a particular area may perform better than others and then not so good the following month. Click here if you are interested in seeing the absorption rates for Big Bear from some of the previous months.
If you are interested in how the real estate market in Big Bear is performing, be sure to sign up for my RSS feed or email newsletter.
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