Big Bear Real Estate 8 Step System To Selling In A Down Market
There are many ways to define a down market. But basically, for Big Bear, we are looking at the average price and number of sales of cabins for a given time. As you know I have broken the Big Bear Market into two categories. 0 - $800,000 and what I call the luxury market of $800,000 and up. Let me give you some stats to show you our current market. Then I will get into getting your cabin sold in that market.
Let’s start with the 0-$800,000 market. If you look at the first graph of prices you can see that we have dropped from an average price of $400,000 for Jan, Feb and March to an average price of $355,000 for April, May and 2/3 of June. Or an average price drop of 11% and it has basically been at that level for the last 3 months. So, we are not on a continuing big price drop so far.
The reason I say so far is because of what is going on with Sales, Listings and Pending sales. Let’s take a look at the second graph, sales v listings (unfortunately we don’t have a graph on the mls for pending sales). First sales, we are at 30 sales for the total Big Bear Area so far in June. When compared to June of 2022 there were 76 sales and in June of 2023 there were 58 sales for the total month. So, we have a ways to go to match 58. I don’t think we will get there. So, the fact is there are less buyers right now buying in Big Bear. When we look at 421 listings, we are at the highest level that we have ever been since Jan of 2022. When I went through the listings 152 or 36% had reduced their price and aren’t sold.
So, in the 0-$800,000 market in the last 3 months, we have an 11% price drop, sales are down, listings are the highest since Jan 2022 and of the 421 listings in this price range 36% have dropped their price and there are only 12 pending listings this month. Expect a lot of pressure for prices to drop.
Now let’s look at the luxury market.
In the $800,000 and up market you can see in the third graph that prices are down in May and so far in June, compared to the price averages of the rest of the graph. In the fourth graph there are 3 sales so far this month. The number of listings is the highest since Jan 2022. Of the 130 listings 45 or 35% have reduced their price and aren’t sold.
In my last newsletter I wrote that if sales stayed in the 10-15 per month in the luxury market prices shouldn’t be affected that much. I don’t think we are going to hit those numbers in June, and we have a very low probability that we will hit those numbers in July.
In the $800,000 and up market we have an average price drop in the last 2 months, sales are down, listings are the highest since Jan 2022 and of the 130 listings in this price range 35% have dropped their price and so far there is only 1 pending listings for this month and that listing dropped it’s price $120,000 before it got an offer. Expect a lot of pressure for prices to drop.
So, how do I get my clients cabin sold in this market?
This is how I got my listing at 820 Villa Grove sold. There are 83 listings in Moonridge with only 2 pending this month. Mine is one of them.
The 8 step system to get your cabin sold in today’s market.
Step 1 The seller must accept a realistic understanding of the market. When I started talking to the sellers we talked about the trends in the market and what prices are doing. Because we had started in a down market, we set up a pricing strategy to be successful in this market. A lot of agents in Big Bear feel that it is a waste of my time to give my readers and clients so much information. This may be true in a good market. When prices are going up everyone is happy. But when the market starts going down you need to keep ahead of the market trend.
Step 2 Have a real assessment of your cabin. First what is the condition of the cabin. Do you need to or want to make improvements or maintenance to the property. For instance, if you need new carpet and the outside needs paint. Do you replace the carpet and have the cabin painted or do you offer a credit for carpet and paint. If you offer a credit the buyer will be able to take the carpet credit and put it toward wood floors and they can pick out the color of the cabin. This way you don’t have to do the work and the buyer gets a cabin like they want.
Next does the cabin have special features. A game room, large garage, great view, by the lake. You get the idea. Exploit the features to make your cabin stand out. We had a game room in the cabin I just sold.
Step 3 Get a detailed market analysis on price and base your pricing strategy on what that analysis is telling you. You may want to try a higher price. Which is fine if you understand that unless you have something very special about your cabin this will cause you to lose money. You must understand that while you are trying to get the higher price that you know won’t work the market will be going down. So, once you lower your price you will have to chase the market down. So now instead of a $20,000 price reduction you will have to drop the price $40,000. You basically lost money by trying to make more money that you knew wasn’t a good strategy.
Step 4 The write up. If you have a write up that just describes the cabin you are trying to appeal to everyone out there. I like to have the write-up not only describing the cabin and the area features but also have something that puts the buyer into the cabin. Something like picture you and your friends enjoying the game room, or this cabin is great for family gatherings. The seller on 820 Villa Grove suggested putting in the write up information about the hill in the back of the cabin that can be used for sledding, great idea.
Step 5 Marketing the property. The MLS and the internet are key. You need to know that your property is exposed as much as possible. Of course, I belong to the Big Bear MLS but they have a limited amount of realtors that belong to it. So, I also belong to the CRMLS which is the largest MLS in California. It covers almost all of California. This gives my clients maximum exposure to the MLS system.
As far as the internet is concerned. Between the two MLS systems and Keller Williams we cover all the major real estate internet sites.
Step 6 Verifying your Marketing is working. I pay for a service that lets me know how many hits my listings are getting on my two MLS accounts as well as the top real estate websites. This way I can determine if the marketing exposure is working.
Step 7 Reduce the price if we aren’t getting offers. Sellers often think that if they reduce the price, they won’t have any margin to negotiate. You can always stick to your lower price. But you need an offer to do that. The question is how much to reduce your price. Most realtors will tell you 5%. And that might be true. But the important thing to remember is that you have to get your price down to a different search level on real estate websites. For example. Let’s say the cabin is listed at $715,000. The people on the internet that have seen the cabin probably searched for cabins in the minimum price of $700,000 to a maximum price of $750,000 range. If you reduce the price to $705,000 you will still have the same buyers looking at your cabin because you are still in the same search parameters. But if you reduce the price to $695,000, you get a new set of buyers that are looking in the price range of minimum price of $650,000 to a maximum price or $700,000 that will be looking at your cabin. Plus, the people in the original search will see the price reduction.
Step 8 If you still aren’t getting the property sold. Start back at Step 1. I have been selling properties for 44 years and have seen some very bad real estate markets. But I have always been able to take care of my clients with this system. This system works.
If you are looking to sell in this market, give me a call and let’s discuss how the system can work for you.