Q4 Market Report - Lake Front Area
Lake Front Area Market Trends: $0-$800,000 Price Range
The following stats are for the Lake Front Area. I have divided the Total Big Bear Area into 10 Sub Areas to give you more detailed information on the area where your property is located. Like most of Big Bear, I have broken up the Lake Front Market into two segments. Up to $800,000 property value and the Luxury Market over $800,000. This seems to be the most accurate price range to split the market. Every three months, I will post detailed quarterly market trend tables and graphs for each price range with a condensed but easy to understand examination of the market stats. If you want to just get the short version of the market in the Lake Front area you can skip to the bottom of each price range and read the Summary.
Market Prices
Table 1 (below) was created from the two year average price monthly graphs for the Total Big Bear Area and the 10 sub areas. Graph 1 below covers the Lake Front Area monthly stats. I will be using the table to analyze what trends I see with Real Estate prices in the 0 - $800,000 Market in the Lake Front Area. The table and graph have the parameters of: Price Range 0 - $800,000, from January 2021 to December of 2022.
There will be fluctuations from quarter to quarter but for now The Lake Front Area has a $44,000 loss over the last 2 years (Column 8). I would expect this loss to increase over the next few quarters. The Lake Front Area also lost $70,000 (Column 5) in average price in the fourth quarter, and had a loss of $192,000 (column 7) from the peak of March 2022. Most of the gain was in our Boom cycle which for most areas stopped in April of 2022.. This loss will now continue to go down because we are in a down cycle. We will have to see how long this down cycle will last and the influence it has on prices in this area.
If you want to know what your Big Bear cabin is worth in this price range in the Lake Front Area, contact me to get a more detailed market analysis that takes into consideration the number of Bedrooms, Bathrooms, Square Feet, Lot size, Condition and Views or location.
Sales vs Active Listings (supply and demand)
Table 2 shows what residential real estate inventory changes (Sales vs Active listings) have occurred for the Total Big Bear Area and sub areas. It is made up of monthly graphs for each area. Graph 2 below is for the Lake Front Area monthly stats. These stats are compiled by using a parameter of: Price Range of 0 - $800,000 from the 2-year period January 2021 to December of 2022.
You can see from column 5 that sales have gone down by 8 this quarter compared to last quarter, and listings are down by 14. Also when you look at column 6, this quarter compared to the fourth quarter of last year, sales are down 9 in this quarter and listings are up by 18. This shows us that economic influences of higher rates and inflation have affected sales this quarter compared to last quarter and compared to a year ago. And they have had a big effect on price. More listings will also cause prices to go down in a declining market. With the Lake Front Area having such a large increase in listings in the fourth quarter compared to last year, this will put pressure on prices to continue to go down. Given the current economic conditions I would expect the number of listings to continue to go up and sales to decline. Which is what you would expect in a declining market. So far the Lake Front Area is in a full declining market.
Graph 3 In the Lake Front area, the sales to expired ratios are still good with sales and expired listings close to a 1:1 ratio. There will always be expired listings. And a 1:1 ratio is considered a good ratio for a stable market. But in the last 2 months we are seeing a ration of 1:3 or even 1:5 which is expected in a down market. With all the added listings in this area expect the expired listings numbers to increase.
Summary
With these numbers we can say that the fourth quarter continued with a declining market in the Lake Front Area with a large drop in price of $70,000 in the quarter and $192,000 since March. This gives the Lake Front area a loss in equity of $44,000 over the last two years. A lot of this was because of the higher interest rates which caused, weak sales and a large increase in listings. For vacation homes, the Lake Front Area is in a big declining market. We now know that we are going to stay in this declining market for at least the next few quarters. It will be interesting to see what happens.
Economic data for the fourth quarter and beyond is all pointing to a continuation of a down market.
Expect the graphs for the first quarter of 2023 to reflect a continued slow Real Estate Market.
My opinion is that we are going to see prices continue to fall. Cabins will be on the market longer. Sales will decline. It will take longer to sell cabins and we will have more expired listings because of the sellers who don’t reduce their price.
Lake Front Area Market Trends: $800,000 and Up Price Range
The following stats are for the Lake Front Area. I have divided the Total Big Bear Area into 10 Sub Areas to give you more detailed information on the area where your property is located. Like most of Big Bear, I have broken up the Lake Front Market into two segments Up to $800,000 property value and the Luxury Market over $800,000. This seems to be the most accurate price range to split the market. Every three months, I will post detailed quarterly market trend tables and graphs for each price range with a condensed but easy to understand examination of the market stats. If you want to just get the short version you can skip to the bottom and read the Summary.
Market Prices
In this price range there can be a difference of $400,000 or more in the monthly average price. Because of this volatility I will be using the annual averages instead of the monthly averages for the $800,000 and up Luxury market to analyze how prices are trending..
Table 1 (below) was created from the last three years, average annual price graph (graph 1) for the Total Big Bear Area and the 10 sub areas. I will be using this table to analyze what trends I see with Real Estate prices in the $800,000 and up Market in these areas. The table and graph have the parameters of: Price Range $800,000 and up, from January 2020 to December of 2022. I have also printed the monthly graph (Graph 2) for the Lake Front Area if you want to look at it.
In the Lake Front Area, in 2022 the area continued with the price increase that it has been enjoying the last 3 years. What started out with an average price in 2020, of $1,577,000 brought us to $1,638,000 through 2022. For an increase of $61,000. And the Lake Front Area has a $358,000 increase over the Total Big Bear Area. This increase in price has brought the Lake Front Area to a ranking of 1 out of 10 areas in average price for 2022. So overall you can see that the prices in the Luxury Market for the Lake Front Area have had a nice increase the last few years. and is doing well compared to the Total Big Bear Area. To see how the prices in the other sub areas have done for comparison please refer to Table 1 below or check out the write up on that area.
If you want to know what your Big Bear cabin is worth in this price range in the Lake Front area, contact me to get a more detailed market analysis that takes into consideration the number of Bedrooms, Bathrooms, Square Feet, Lot size, Condition and Views or location.
Sales vs Active Listings (supply and demand)
Table 2 shows what residential real estate inventory changes (Sales vs Active listings) have occurred for the Total Big Bear Area and sub areas. It is made up of monthly graphs for each area. Graph 3 below is for the Lake Front Area monthly stats. These stats are compiled by using a parameter of: Price Range of $800,000 and up from the 2-year period January 2021 to December of 2022.
You can see from column 5 that sales are down this quarter compared to last quarter by 3 and listings are up by 2. When you look at this quarter, (column 6), compared to the fourth quarter of last year sales are down by 6 in this quarter and listings are up by 8. This shows us that economic influences of higher rates and inflation have affected sales compared to last quarter and compared to a year ago. Given the current economic conditions I would expect the number of listings to go up and sales to decline. Which is what you would expect in a declining market. It is also worth noting that during 2019 and before we were lucky to have 2 or 3 sales in three months in this price range for the whole Big Bear market. So overall this market is still in good condition.
Graph 4 In the Lake Front Area, the sales to expired ratios for the last two years have been good with sales and expired listings close to a 1:1 ratio and on occasion going to a 1:2 ratio. There will always be expired listings. And a 1:1 ratio is considered a good ratio for a stable market. If we begin to stay in the 1:2 ratio it will be an indicator that this market will be going into a declining market. And in the last few months we are seeing ratio’s of 1:5 and even 1:10. If these ratios continue this market in this area will be in a serious down turn for at least a few more quarters.
Summary
With these numbers we can say that the fourth quarter in the Lake Front Area prices have stayed at a very good level. With the average annual price of $1,638,000 giving this area a number 1 ranking in average price compared to the other sub groups. And still has equity build up of $61,000 from three years ago. But sales have dropped over the last two quarters and listings have gone up. Which will put pressure on prices to go down. The expired listings to sales ratio has gone up dramatically which will also put pressure on prices to continue to go down. We will have to see how the influence of the economy affect this market.
Economic data for the fourth quarter and beyond is all pointing to a continuation of a down market.
Expect the graphs for the first quarter of 2023 to reflect a continued slow Real Estate Market.
My opinion is that we are going to see prices continue to fall. Cabins will be on the market longer. Sales will decline. It will take longer to sell cabins and we will have more expired listings because of the sellers who don’t reduce their price.