By: Melissa McCue

Jumbo loans, also known as non-conforming, are typically loans where the principal balance exceeds the conforming loan limit of $417,000 that is set by Fannie Mae or Freddie Mac, although some areas have higher limits. Jumbo loans have always carried a higher interest rate than conforming loans, until recently. 

In September 2013 the interest rates for jumbo loans were lower than those of conforming loans. Major news sources have analyzed the possible reasons for this occurrence, ranging from the shift showing health and stability in the market to others stating that it is a sign of instability. One article linked the decrease in rates to an increase in the sale of high-end homes, which piqued my interest as to whether Big Bear has experienced any such increase. Since the rate decrease just occurred in September, it seems it would be premature for data to indicate a solid increase. However, I decided to look at sales in different price ranges regardless of whether they are linked to the decrease in loan rates.

Overall the numbers for Big Bear showed very little change in the percentage of sales from 2012 to 2013 in broad categories. For instance, sales over $500k increased just 0.47% from 2012 to 2013. However, when the price range categories are broken down into smaller increments, a larger redistribution is evident.

The chart to the left shows that price ranges are shifting. As you can see, sales under $200k decreased by 8.13% while there was a closely corresponding increase of 7.42% in the $201k - $400k price range, and that trend of upward redistribution continues throughout the rest of the chart. The cause of these shifts is not apparent, but I suspect it is a combination of a market driven increase in prices meeting buyers who have increased confidence in market stability which encourages them to spend a bit more to get the homes that they want.

By: Melissa McCue

As is to be expected, I am continually asked questions about the health of the local real estate market. Rather than just giving the static, “The market is great!” response, I prefer to have concrete information to share because it gives my clients a clear and accurate picture of the market rather than just a vague idea or “feeling”. Many times the information that I compile is time consuming because most systems that offer automated market statistics just don’t pinpoint the exact information that I’m after. So I find myself exporting information from the local multiple listing service and diving into spreadsheets until I reach a point of clarity.

Every time that I sit down to begin that task, I wonder whether the outcome will be favorable to the market. Fortunately, of late, the outcome has consistently and increasingly been good, and the 1st Quarter of 2013 is no exception. The most striking result in this short term look at the numbers is that compared to the 1st quarter of 2012, our median price is up close to double digits,  at 9.68%. Just a few months ago when I gathered the 2012 year end numbers, the median price was up just 3.63%.

Equally interesting, is that the number of sales in Q1 of 2013 are up 16.06% as compared to Q1 of 2012. One could look at this a slow in demand from the 2012 year end numbers, which showed a year over year increase of 28.6% in the number of sales.  If I had to make an educated guess about the reasons for that, it would be two fold; first, short term numbers can show temporary increases and decreases that change over the longer term. Secondly, our inventory continues to be dismally low. There are many buyers that are well qualified and serious about buying but just cannot find a home to purchase. It is not uncommon for buyers to schedule showings on multiple properties and then have one or more of the top picks go into escrow before they actually make it up here. This shows that the good houses are selling quickly! 
Melissa McCue (909) 855-4898.          

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.

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. 

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.

By Melissa McCue

The celebration of the New Year in many ways symbolizes hope and change, and this year we have some numbers that can give homeowners in the Big Bear area a real basis for that hope. The 2012 sales volume for single family residential (SFR) units came in at an increase of 28.6% over 2011. This is far above the California Association of Realtors projected statewide average increase of 5.1%.

The increase in sales volume is a positive sign, but to give an indication of real market change it should be accompanied by an increase in price, and for the first time in 5 years, it is! The median SFR price  for 2012 came in at an increase of  3.63% over 2011.

If I were a gambler, I would bet good money that the number of units sold and the increase in prices would have both risen even more if our inventory had not been so low. Since mid-year 2012 it has steadily declined from around 500 homes to around 350 homes.