By: Melissa McCue
Late in 2012 the California Association of Realtors released their Annual Housing Market Survey, one finding in particular that caught my eye was that nearly 30% of all buyers in California paid all cash for home purchases. That was triple the number of the year of 2001, when only about 9% of buyers paid cash. Of course, these numbers piqued my interest as to how the Big Bear area would compare to the state level.
Late in 2012 the California Association of Realtors released their Annual Housing Market Survey, one finding in particular that caught my eye was that nearly 30% of all buyers in California paid all cash for home purchases. That was triple the number of the year of 2001, when only about 9% of buyers paid cash. Of course, these numbers piqued my interest as to how the Big Bear area would compare to the state level.
It turns out that Big Bear was slightly above the state numbers, with 35% of home sales being cash deals in 2012. It makes perfect sense that with the tightening of conventional lending, there would be an increase in cash deals. However, cash sales spiked at 32.4% in 2009 (see graph below), at a time when the market was only in its second year of the downturn. That same year, the median home price in the Big Bear area dropped by -16.60%, then again by -6.87% in 2010 and finally by -16.56% in 2011 before we saw an increase in median pricing of 3.63% in 2012.
Over the years, many investors and second home owners have placed their money in the Big Bear real estate market, either in hopes of realizing investment goals or because of lifestyle choices. Either way, it is encouraging to see that buyers have chosen to invest their cash here, even in a down market, when it is generally accepted that any return on investment would be long term.
Over the years, many investors and second home owners have placed their money in the Big Bear real estate market, either in hopes of realizing investment goals or because of lifestyle choices. Either way, it is encouraging to see that buyers have chosen to invest their cash here, even in a down market, when it is generally accepted that any return on investment would be long term.
The decision to purchase a vacation home is not always driven primarily by numbers, if so, home owners in the Big Bear area would be focused on cash flow positive investment property with low vacancy rates. Instead, I live on a street where the large majority of houses are intentionally left vacant and are therefore cash flow negative. Second home buyers consider not just monetary investment, but also lifestyle, because it has inherent “value”. It’s “price” vs. “value” and while both are important, second home buyers do not always weigh them equally when purchasing. Next time that you think of buying or selling in the Big Bear area, remember that we are a unique market, where financial decisions can be strongly tied in with lifestyle choices. Having a real estate agent that understands this market is important and I make it my business to do just that. Call me at (909) 855-4898.
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