email: Bill (at) BillYoung-BigBearHomes.com Big Bear Lake Real Estate, and Big Bear City Real Estate CURRENT MARKET STATS BELOW (market info last updated: 3/4/2010)            "There are MOUNTAINS of things to discover in Big Bear" Alpine Living - 3 hours from anywhere in SoCal, but a million miles from the Rat Race !! Click here for up-to-the-minute Big Bear weather               Overall chart for Big Bear Valley showing: *  the # of SFRs available, *  their Median price (Median means that half of the prices are above and half are below the figure) *  their Average price (arithmetic average of ALL homes in the area) *  the # of homes sold in the last 12 months. Big Bear Fast Facts 2/10/2010 10:53   SFR QuikFacts last 30 days (not monthly)     # of available SFRs now 616       # of available short sales 55       # of available REOs 46       % of distressed to total available 16% # of Pending SFRs now 138 # of Pending SFR that are distressed 77 % of Pending SFR that are distressed 56% # of Sales last 30 days 50 Median $$ sold last 30 days $136,000 Ave $$ sold last 30 days $197,000 Med days on market for sold last 30 days 68 $$ range of sold last 30 days $32k to $1.2M # of Distressed sales last 30 days 28 % of distressed to total last 30 days 56% months of inventory now 12.3 total $$ SFR sales last 30 days $10,432,534         We know that "all real estate is LOCAL"... but it's still a good idea to keep an eye on the bigger picture too. "Think Globally, but act Locally" California Fast Facts, 2/24/2010  Calif. median home price: January 2010: $287,440 (Source: C.A.R.) Calif. highest median home price by C.A.R. region January 2010: Santa Barbara So. Coast $760,000(Source: C.A.R.) Calif. lowest median home price by C.A.R. region January 2010: High Desert $124,480 (Source: C.A.R.) Calif. First-time Buyer Affordability Index - Fourth Quarter 2009: 64 percent (Source: C.A.R.) Mortgage rates - week ending 2/25/10 30-yr. fixed: 5.05 Fees/points: 0.7% 15-yr. fixed: 4.40% Fees/points: 0.7% 1-yr. adjustable: 4.15% Fees/points: 0.6% (Source: Freddie Mac)  Preferred Buyer Program Take this test to see if you are "Earthquake Smart" 2009  2005                2003            2004 ............................................................................................................................................................................... Immediate Past President,  Big Bear Chamber of Commerce                       According to a CNNMONEY.COM article, there are 476,129 millionaires in Los Angeles, Orange, and San Diego counties. We think the propsects for continued sales activity in Big Bear Lake are outstanding, since 46% of the local millionaires own investment properties like Second homes or rental properties, their median age is 58, and 45% are already retired. 10 good reasons to buy NOW... click here to find out what's changed in the last year. and click here for multi-year historical interest rate charts. Below you'll find the statistics for the Big Bear Market.  This data is updated every month.  In exchange for this current market information, I ask that you allow me to be your Buyer's Agent.  I will make the buying process as painless as possible for you.  I understand that this will most likely be a second home or vacation home for you, and that you probably don't live up here "on the hill".  I live and work in Big Bear 100% of the time... let me be your eyes and ears... and your Realtor of choice. Sales Stats for the Big Bear Valley Notes: 1)  The purple line in the above graph represents the Median Sales Price for all homes sold in the Big Bear Valley.  As you can see, the median home price in 2006 was about $325k while the median price last month was about $300k.  Please note that this is not the "average sales price" since we sell an ecclectic blend of expensive and inexpensive homes.  The "median" price means that half of the homes were sold above that price, and half of the homes sold below that price. An "average" figure would be skewed if we averaged $200k homes with the $1M+ homes. 2)  The dark Blue line in the graph above represents the number of homes sold in each month.  In 2003, there were about 125 homes sold per month, rising in October 2004 and again in 2005 to about 200 homes sold.  Our current average hovers around 80 homes sold per month. 3)  The Yellow line represents the average Days On Market.  This tells us how long the home was on the market from the day it was first listed, to (usually) the day escrow closed.  50 days was the average in early 2003, and has extended to about 130 days in Q3-2009. As you can see, the heart of our Available market is in the $150k-400k ranges. Real Estate News items updated 12/1/09 (click the link below for the full story) The Contract Offer: What Price to Start With When a decision is made to make an offer to purchase a home, be sure to go back and take a second look. It is so much easier changing your mind about a home before a contract offer is made than after a contract offer is accepted and signed by the seller. This second appointment would be a perfect time to bring along others who may have an impact on a buying decision, such as parents, friend, contractor, etc. Full Story: http://realtytimes.com/rtpages/20090706_contractoffer.htm Avoiding Closing Derailment Like a train, a transaction can get derailed at any point on the track. A closing can be hit by a clouded title, a home not appraising for value, a rapid change in interest rates, an undisclosed credit or income issue, or one of countless other unanticipated issues. Full Story: http://realtytimes.com/rtpages/20090619_avoid.htm The Waiting Game A recent study by shows that real estate is now as affordable as it's been in the past 38 years. The study tells us that median home prices, when viewed against median mortgage rates and incomes, are wildly affordable. Full Story: http://realtytimes.com/rtpages/20090603_waitinggame.htm Foreclosures Gaining Buyer Interest: Inspect Before You Buy It's no surprise that buyers are looking for a bargain but now even more people are gaining interest in the growing foreclosure market. According to Trulia.com and RealtyTrac, a recent survey shows that 55 percent of U.S. adults are at least somewhat likely to consider a foreclosed home when buying real estate. That's a nearly 10 percent increase from November 2008. Full Story: http://realtytimes.com/rtpages/20090529_foreclosures.htm Real Estate Outlook: Bottom in Sight? Last week, Dr. Mark Zandi, chief economist for Moody's Economy.com, surprised analysts by announcing that "the bottom of the housing downturn is in sight for the nation." Full Story: http://realtytimes.com/rtpages/20090217_realestateoutlook.htm Real Estate Outlook: What's in Store for 2009? What will the new year bring for housing and real estate? Here's a different perspective to consider from one of the country's veteran financial analysts -- Richard Bove of Ladenburg Thalmann, the investment banking company. Full Story: http://realtytimes.com/rtpages/20090106_realestateoutlook.htm Just Two Things Eleven industry experts share what they believe are the top two good things about our current market conditions. Full Story: http://realtytimes.com/rtpages/20081126_twothings.htm ...................................... Don't Judge A Home By Its Cover Letter Some of the lingo used in real estate marketing is just that, terms, phrases and euphemisms designed to get you interested. It's up to you to see a property for what it really is. Full Story: http://realtytimes.com/rtpages/20080918_coverletter.htm ......................................... Hot Market: Southern Cal Leads the Way to Recovery Yes, prices are down. Yes, there are a lot of foreclosures involved. And, yes, Southern Californias sales are going through the roof. DataQuick.com reports sales up in the double digits for the second month running. Sales are up ranging from 10 to 48 percent across the region. Full Story: http://realtytimes.com/rtpages/20080905_hotmarket.htm .............................. Investor Report: Hidden Tax Pitfall Here's a tax alert for real estate investors who use popular tax-free exchanges: The recently signed federal housing legislation contains a hidden zinger that could cost you thousands of dollars if you don't plan around it. Full Story: http://realtytimes.com/rtpages/20080815_investorreport.htm .......................... Investor Report: Section 1031 Here's some great news for the thousands of real estate investors and brokers who use "Section 1031" (ten thirty-one) tax-deferred real exchanges every year: Congress has backed off its latest plan to narrow the definition of "like kind" for real estate swaps. Full Story: http://realtytimes.com/rtpages/20080606_investorreport.htm ............................ Realty Viewpoint: Housing Crosses Biggest Hurdle - Price I like the way economist Irwin Kellner explains housing, because he's sensible and he's straightforward. He says in his latest column for MarketWatch that housing could turn around quickly because it's become affordable again. Full Story: http://realtytimes.com/rtpages/20080520_brodreport.htm ........................ Successful Browsing For Housing Browsing for housing online isn't just about fat bandwidth and interactive content. DotHomes.com says using a studied approach to home shopping online is more important. Full Story: http://realtytimes.com/rtpages/20080508_browse.htm ......................... IRS Issues Vacation Home Ruling The IRS has just issued a new ruling that sets forth the guidelines for those taxpayers that wish to do a 1031 exchange involving a vacation home. By way of background, you can only exchange property held for investment or used in a trade or business. Full Story: http://realtytimes.com/rtpages/20080306_irsvacation.htm ......................................... .Click here for a recent article that gives the details of Second Home owners and Investors Here is an article talking about 2nd Homes taxes etc.  Note: this should not be construed as Legal or Tax advice... it is intended only as talking points when you get together with your Attorney or Tax Accountant.              Have you tried Zillow yet? Comparing Zillow's property value estimates to actual Big Bear MLS data is entertaining! Just as you would not buy a home after only seeing pictures on the internet; be wary of the results generated by any computerized valuation model.  Real estate valuation is very complex especially here in the Big Bear Valley where we have an eclectic mix of old and new homes along with the affordable and very expensive... all on the same street. Computer valuation models are not a substitute for an experienced real estate professional.  When it comes to your home's value in the Big Bear Valley, whether you are listing or buying, you can trust that Realty Executives will deliver the best possible solution. Despite advertising claims to the contrary, the Internet is not an experienced real estate professional. It cannot consult, counsel, advise, apply knowledge of local real estate laws and market conditions, make judgments, own the result, or most importantly, understand your individual goals and needs and care about you as a client. Furthermore, while the Internet can provide information, it cannot interpret it. For a quick computer generated estimate of any property, click on the Zillow logo. This tool uses property tax records and assessed values to estimate the value for a property. Please be aware that this is a generalized assessment and does not properly reflect the current market, location, condition, or improvements of your home or the selected comparables. Also be aware that the seller can raise the "Zestimate" of the home's value be editing the Zillow website.  I took a sample of MLS properties in Big Bear Valley that are recorded as being "SOLD" for the dates of 2/20/07 through 3/4/07... there are a total of 29 homes recorded as SOLD in that time period.   The last three columns of the chart above show the differences between "real world" and the "Zestimate".  It is interesting to note that :   *  8 of the 29 residential units sold were not on Zillow *  6 of the 29 homes were under-valued by Zillow... the (-) signs *  2 of the 29 homes were right on the money by Zillow *  13 of the 29 homes were over-valued by Zillow...the (+) signs   What does this mean? If you are a Buyer and use the Zestimate to make an offer on a home, then you have a 13 in 29 chance of offering too much for the cabin... and a 6 in 29 chance of getting your offer rejected or ignored for being too low.   If you are a Seller and use the Zestimate to establish the list price of your home, you have a 13 in 29 chance of asking far more than the market and comps will support.  Your home will most likely languish on the market by being priced too high.  A competent REALTOR wouldn't let this happen.   For example, if you were the buyer for the home in row #11 (see chart), then your offer would have been $169,000 below what the home actually sold for.  I'm pretty sure that the seller wouldn't even counter that offer, but rather ignore it as "low-balling" and not a serious offer.   From time to time I'll reprint this chart showing the then current comparisons. What will it cost per month? Below is an estimate of monthly payments for a given loan amount.  Please consult the "CALCULATOR" tab to the upper left, or consult with your favorite Lender for exact figures. Estimates on Monthly payments for a given Loan amount Int rate:  6.30% min 20% down Example: $300k home, $240k loan, payments approx: $1,900/month PITI loan amt Prop value P&Int Tax Ins total  $            50,000  $            62,500  $       309  $       65  $       11  $       385  $            75,000  $            93,750  $       464  $       98  $       16  $       578  $          100,000  $          125,000  $       681  $      130  $       22  $       833  $          125,000  $          156,250  $       774  $      163  $       27  $       964  $          150,000  $          187,500  $       928  $      195  $       32  $     1,155  $          175,000  $          218,750  $     1,083  $      228  $       38  $     1,349  $          200,000  $          250,000  $     1,238  $      260  $       43  $     1,541  $          225,000  $          281,250  $     1,393  $      293  $       49  $     1,735  $          250,000  $          312,500  $     1,547  $      326  $       54  $     1,927  $          275,000  $          343,750  $     1,702  $      258  $       59  $     2,019  $          300,000  $          375,000  $     1,856  $      391  $       65  $     2,312  $          325,000  $          406,250  $     2,012  $      423  $       70  $     2,505  $          350,000  $          437,500  $     2,166  $      456  $       76  $     2,698  $          375,000  $          468,750  $     2,321  $      488  $       81  $     2,890  $          400,000  $          500,000  $     2,476  $      521  $       87  $     3,084  $          425,000  $          531,250  $     2,630  $      553  $       92  $     3,275  $          450,000  $          562,500  $     2,785  $      586  $       97  $     3,468  $          475,000  $          593,750  $     2,940  $      618  $      103  $     3,661  $          500,000  $          625,000  $     3,095  $      651  $      108  $     3,854

Think you can "wait out" the higher home prices?
(it probably will cost you more money)
...................................
Rates, Not Home Prices, Worst Enemy In Affordability
by M. Anthony Carr
as published in REALTY TIMES, 12/9/05

With all the talk of softening markets, many buyers have moved to the sidelines hoping to wait out high prices, believing that lower prices will help them along the path to homeownership or to move up into the house they really want. Instead of prices, buyers should really keep their eyes on interest rates ? the most powerful component of the home-buying process.

In a nut shell, if you wait for prices to level and drop while interest rates increase -- your ability to purchase that now-affordable home may have just vanished with interest rates running up along side the price drops.

An information sheet came to my desk from a national mortgage company comparing buying power on a household annual income of $100,000 to demonstrate this point and it was quite telling. Now, I know the national median household income is about half that amount, however, the principles are the same of how powerful interest rates affect purchase power.

For instance, in this example, if youre waiting for prices to drop $50,000 before you buy, hoping to get a better deal ? well, quit waiting. If interest rates increase as the Mortgage Bankers Association of America forecasts, your payment wont come down with the lower prices. In fact, you may still sit on the sidelines.

MBAA is predicting 6.7 percent rates into next year. Even with that level of increase, historically, that rate is some of the lowest rates youll ever see. However, at that amount, the above buyer will only be able to buy about $399,411 worth of house. Last June (just 5 months ago) that same borrower could have borrowed $450,000 at 5.63 percent on a 30-year fixed mortgage. Neither the buyers income nor the home price decreased the buyers buying power -- just the interest rate.

Here are the nitty gritty details:

The 30-year fixed rate mortgage for $450,000 at 5.63 percent would cost a borrower $2,591.87 per month. For that same borrower waiting for prices to drop, but watching interest rates jump to 6.7 percent, that same $2591.87 will only fund a mortgage of $401,667.91.

If you want to see what that would do in a lower financial stratosphere: lets say its a loan for a $60,000 household budget, instead of $100,000. The purchasing power for this buyer would be roughly $1,550 per month ? thats a loan for $217,024 at 5.63 percent (including $300 for taxes and insurance). That same money at 6.7 percent will only purchase $193,715 -- a difference of roughly $24,000.

Two words of advice. To those who are thinking about buying -- look at all your options and run your personal numbers. How long can you wait for prices to reduce while interest rates are on the march upward before youre priced out of your favorite home again. If housing inventory is on the rise in your market area -- then move sooner than later. Smart sellers are willing to negotiate again -- you may be able to get that lower price just by asking for it.

Case in point: Just a couple weeks ago in the D.C. market, a Realtor told me of how he saved his buyers nearly $75,000 from sellers who realized they needed to get going instead of hanging on to their price. In essence, make an offer -- the worst that can happen is the seller will counter your offer or reject it. What is it they say? Nothing ventured ...

Secondly, if you know youre going to buy -- lock in early and move in on the contract. By locking in you save money by having a lower rate for your mortgage. Some mortgage programs let you lock in for up to 120 days.

Average interest rates have risen by more than half a percentage point in just the last 6 months from 5.62 percent to 6.28 percent, according to Mortgage-x.coms rate calendar. Depending where rates go, even one month delay in locking in your rate could make a difference of several hundred dollars on your monthly payment.

Published: December 9, 2005 in REALTY TIMES