The foreclosure filings in August 2009 (219) were down 10% from July 2009 (244), but were still up 27% from August 2008 (173).

Foreclosure filings are made up of Notices of Default, a recorded document that starts the foreclosure process, Notices of Sale, a recorded document that sets the date for the Trustee Sale, and lastly, Trustee Sales, properties that go back to the bank or sold to third parties.

Here’s how the foreclosure numbers broke down for August 2009.

Notices of Default (NOD) - 101 total, up 2% from July and up 37% from August 2008.

The NOD have been hovering around 100 for the last 7 months, which means every month nearly 100 property owners in Big Bear are starting down the foreclosure road.  Sad, but very true.

Until we see this number start to shrink, we will continue to see bank owned properties hitting the market in Big Bear.

Notices of Sale (NOS) – 74 total, down 27% from July but up 15% from August 2008.

As you can see from the graph above, this was a pretty sharp drop from the 101 NOS we saw last month, the highest we have ever seen I might add. The August numbers are more in line with the numbers from May and June, and still quite high historically speaking.

Trustee Sales – 44 total, that same number from July and up only 5% from August 2008.

This number remains on the higher end of the scale and is consistent for what we’ve seen the past 6 months for properties in Big Bear that are going back to the bank.

What do all these numbers mean?  In my opinion, more bank owned properties on the market, and in turn, more competition with organic sellers, and prices continuing to stay depressed.  Overall, still some good opportunities for Big Bear home buyers.

Related Articles

Big Bear Foreclosure Numbers – July 2009

Big Bear Foreclosure Numbers – June 2009

Big Bear Foreclosure Numbers – May 2009

Big Bear Foreclosure Numbers – April 2009

Big Bear Foreclosure Numbers – March 2009

Big Bear Foreclosure Numbers – February 2009

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I believe it could be.

The current state of the real estate market in Big Bear reminds me of a scene in the movie, “The Perfect Storm”.

Near the end of the movie, after the fishing boat and its crew battle huge waves and horrible weather, things clear up.  They think they made it through.  But, the storm comes right back even stronger and eventually sinks the ship & crew.

This is similar to the current state of the real estate market in Bear.  We’ve seen rough waters over the past 2-3 years, and things appear to be clearing up – sales are picking up, prices are leveling out, and inventory is going down.

But there are some big clouds on the horizon in the real estate world.

Foreclosure filings are at the highest levels we’ve seen.

What is going to happen to these properties?  I suspect nearly all will be coming on the market over the next 12 months, and that’s many more than we’ve seen so far.  I believe these will continue to put downward pressure on prices, even with the huge drops we’ve already seen.

I do anticipate that this will have a bigger effect on properties priced over $350,000 as they are getting less activity currently.   These properties make up 60% of what is currently for sale, yet only 22% of what is selling.

Conversely, I expect this will have less impact on those properties priced under $350,000, as they have seen a big drop in prices already, and there remains strong demand from buyers today.  They make up 78% of what is selling yet only 40% of what is currently listed for sale.

By no means am I saying that this is the end of the world for real estate in Big Bear, or all sellers are going to drown.  I am not trying to promote doom and gloom.

But, to deny or not be aware of what we are possibly heading into seems foolish to me.

What do you think?

Related Articles

Foreclosure Numbers

So, We’ve Hit Bottom In Big Bear……..Not So Fast!

Bank Owned & Short Sale Homes Taking Market Share In Big Bear

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Big Bear home sales dropped in August from the 2-year high we saw in July.

Home sales fell 14% when compared to the July numbers (75 v. 87), but were up 25% when compared to August 2008 (75 v. 60).

Even with the drop in sales month over month, sales are still pretty strong all things considered.  They are certainly not close to the sales numbers we saw 4-7 ago (averaging about 175 per month).

It is typical to see sales pick up in the June to October time frames as that is our selling season.

24, or 32%, of the 75 home sales in Big Bear were bank owned. This is a just a touch lower than last month, and still well below the 50% mark we were seeing earlier in the year.  4 of the sales, or 5%, were short sales, which is down just over 50% from last month.

That means 47, or 63%, of the sales in August 2009 were “organic”, or traditional sellers – another strong month for them.

It is important to keep in mind that bank owned properties currently only make up 5% of what is for sale in Big Bear, yet they are making up between 30% to 40% of what is selling every month.  That is what the fish (buyers) are biting on!

Short sales in Big Bear, however, seem like more of a waste of time than anything else. Sure, there are a few closing escrow here and there, but more than 50% that go on the market never end up closing escrow.  There are a variety of reasons why – unrealistic price, no hardship by the seller, lack of follow up and preparation by the agents, and uncooperative banks.  My advice to buyers is to try and find an organic seller or bank owned property first.  Save yourself the headache.

Big Bear Home Prices

The median sales price in August 2009 was the lowest we’ve seen in the past 2 years.

It dropped considerably, down 24% from the July number ($170,400 vs. $225,000).  Even more dramatic, it is down 40% from the August 2008 median ($170,400 vs. $282,500).

This is the second straight month we’ve seen the median price drop.  See the chart below for the historical median prices.

With the limited amount of sales and wide variety of prices, it is still too difficult to make any concrete determinations about the real estate prices in Big Bear. One thing is for sure though – the lower prices are driving the activity level of buyers.  Without the lower prices, the buyers would still be on the fence.

There is a $142,600 difference between the median asking price of $313,000 and the median selling price of $170,400.

The median asking price for bank owned & short sales properties in Big Bear is $199,450.  More importantly, it is $113,550, or 36%, below the median asking price for “organic” sellers. That is a big reason why they are getting a lot more activity.

Homes Currently on the Market

The number of properties on the market for sale in Big Bear stands at a total of 864, down 45 from last month.   This is one of the most important numbers to keep an eye on.

Why?

Because if you compare this to last year we had nearly 1150 homes on the market for sale at the same time.  Less homes on the market equals less competition for home sellers (good thing) and less options for home buyers (bad thing).   And this number will go down even more in the winter months as sellers take them off the market for the slower market conditions.

One wildcard is the number of bank owned properties that hit the market over the next 6-12 months.  As mentioned earlier, they only make up a small amount of what is currently for sale in Big Bear.

Big Bear Home Sales – Thru August 2009

Year To Date Comparison (1/1- 8/31)

Year to date, sales in 2009 are up 27% from the 2008 number, and down only 5% from 2007 (gaining).  But, prices are still down 19%  & 18% respectively for the median & average sales prices.

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* Note: The charts above will be updated on a monthly basis. It represents single family home sales in the Big Bear area, including Big Bear Lake, Big Bear City, Moonridge, Fox Farm, Sugarloaf, Erwin Lake, & Fawnskin. Data courtesy of the Big Bear MLS. These numbers do not include raw land or condos nor does it include homes in the Big Bear MLS that are located out of the Big Bear area.

Related Articles

Big Bear Home Sales July 2009

Big Bear Home Sales – June 2009 And Second Quarter 2009

Big Bear Home Sales – May 2009

The impression with most buyers is that because they are paying cash, they should get a big discount off of the asking price. That is just not the case.

(Click here to see embedded video)

Cash buyers in Big Bear are only saving 1% for paying cash as compared to those buyers that are getting a loan or any other type of financing.

I am no accountant, but it seems to me all the tax benefits of having a loan against the property add up to more than a 1% savings.

Year to date, there have been 164 cash sales for residential properties in Big Bear.  The average sales price to list price ratio is 94%.  Compare that to the 95% ratio for all other types of financing.

Here are some other interesting stats for cash vs. loan/other financing sales -

• Cash sales YTD are up 123% compared to 2008 numbers, 164 v. 74.  This is expected, as overall sales are up 34% YTD, but there has been a marked increase in cash sales.
• The average sales price for cash sales this year – $303, 418 vs. $258,605 for loan/other financing sales.  I would have thought this would be the opposite.
• Average days on market comparison – cash sales 101 DOM vs. loan/other sales 130 DOM.  This goes to my point that the hot properties, those selling quicker, are attracting more cash buyers and competition amongst themselves.

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If the contract is left unchanged, the period of these three contingencies is 17 days after the deal is struck. As stated in the contract, the removal of these contingencies must be in writing with the C.A.R. form CR (contingency removal).

This is the paragraph in the contract that explains these contingencies:

Here’s are some thoughts about each and why they are important:

Loan – The loan contingency term should be set based upon the time that is required for the lender to provide written loan approval. The shorter the time period, the more attractive to the seller, but can the buyer and the lender live up to that?  In today’s lending world, banks are very careful to check all of the borrowers information and be certain the buyer can service the debt. Often, the buyer’s agent will ask for the loan contingency to be extended until the loan funds. This is a good idea if you are a buyer, but sellers may not want to wait that long.  Until the buyer removes the loan contingency, the seller and the deal are still in limbo.

I would caution buyers to ask for at least an extra week (24 days) for loan contingency removal considering the current lending environment.

Appraisal – Recent changes brought by the Home Valuation Code of Conduct (HVCC) have made appraisals an issue for some Fannie Mae and Freddie Mac transactions (basically any loan under $500,000). Lenders are now required to use an AMC (appraisal management company) to select the appraiser.  Many times theses appraisers from outside the area with little or no local knowledge about the real estate values in Big Bear. This can be a problem, especially if the appraiser doesn’t have access to the local Multiple Listing Service (MLS). Usually, the appraisal contingency time period is left at 17 days.

Buyer’s Inspections - Buyer’s inspections contingency period is 17 days unless you request a different time period on the residential purchase contract. Usually this is adequate time to perform a home inspection or any other inspections that a buyer may want to have completed. I recommend that a heating contractor takes a look at any forced air heating unit that is over 15 years old to check the heat exchanger for cracks, carbon monoxide leakage and to verify that there have not been any recalls on the heater.

Buying or selling a home is best done with the advice of a real estate professional.  Understanding the contracts and contingencies involved is just a small part of the whole process.

Steve Hirschler

The foreclosure filings in July 2009 were up 16% from June 2009, and 81% from July 2008.

Keep in mind, foreclosure filings are made up of Notices of Default, a recorded document that starts the foreclosure process, Notices of Sale, a recorded document that sets the date for the Trustee Sale, and lastly, Trustee Sales, properties that go back to the bank or sold to third parties.

While the overall news on the real estate market may appear to be getting better, foreclosure filings are not.

Here’s how the foreclosure numbers broke down for July 2009.

Notices of Default (NOD) - 99 total, up 10% from June and up 46% from July 2008.

The NODs have been hovering around for the late 6 months.  This means that every month, nearly 100 property owners in Big Bear are starting down the foreclosure road.  I don’t have the exact stats, but my professional guess is that 80% or more of these will ultimately go back to the bank and eventually end up on the market.  This is not a great sign for things to come.

Until this number starts to shrink, we will continue to see bank owned properties hitting the market in Big Bear.

Notices of Sale (NOS) – 101 total, up 46% from June and up 77% from June 2008.

101 is the highest number we’ve seen in Big Bear.  This means there were 101 properties in Big Bear that the Banks set a sale date on in July.  Most of these will show up as bank owned and on the market for sale over the next few months.  More bank owned properties on the market means more competition with organic sellers, and depressed prices.

Trustee Sales – 44 total, down 15% from June but up 29% from July 2008.

While this number did go down, it is still one of the highest months we’ve seen in Big Bear, and I expect that to continue.

Given that the foreclosure numbers are a good measure of what we will be seeing 6-12 months down the road, the real estate market in Big Bear still has some rough waters ahead.

Related Articles

Big Bear Foreclosure Numbers – June 2009

Big Bear Foreclosure Numbers – May 2009

Big Bear Foreclosure Numbers – April 2009

Big Bear Foreclosure Numbers – March 2009

Big Bear Foreclosure Numbers – February 2009

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Big Bear Bank Owned Properties

With prices for real estate in Big Bear at an all time low, many folks are seriously considering buying a bank owned fixer. On the surface, it seems like a really great idea, and if done correctly, it can be.

However, like most things, it is a little more complex than it appears to be.

There are many issues that can come up and derail or at least cost more than one would expect. The purpose of this blog post is just to bring up a few things one should think about before you take the plunge.

1. Don’t be greedy. Buy low and sell low. This is still very much a buyers market. Even if you get a great price on a fixer, you will still have to sell for a low price. If you are not planning on holding on to the property for at least five years, you really need to make sure you have your numbers right. I have seen some successful flips lately, but only when the investor is realistic about the profit margin and prices the improved property to sell.

2. Don’t underestimate repair costs. If you are not a contractor, repairs can cost quite a bit more than you would think. Everybody always says that they have a Cousin or an Uncle who is a contractor who will fix the house on the cheap. Then when it comes time to get the work done, the Uncle or Cousin is nowhere to be found. Even simple things like carpet or painting can run into the thousands of dollars.

3. Permits & Inspections. If you are planning any sort of major addition or remodeling, don’t forget the costs for permits and inspections. To insure that the house is sellable, permits are a must. You are allowed to sell a house that is lacking permits as long as you disclose it but, an unpermitted addition or remodel will leave some serious misgivings in the mind of a potential buyer.

4. Financing. Last but not least, if you are planning on buying the home using a loan, you need to do your homework. Many lenders won’t do a conventional loan on a home that is in serious disrepair and not habitable. Something as simple as an illegal water heater can keep a loan from funding. Is the stairway missing a railing? That can cause an underwriter to not fund the loan. Most lenders usually aren’t too concerned if a home only needs paint, carpet, landscaping etc, but anything else can be a problem. If you are planning on using an FHA, VA, or any government assistance program, forget about it. They won’t fund a loan if the paint is peeling on the eaves. It is a very difficult proposition to use any of these programs to buy a fixer.

I hope that this has been of some assistance to anybody planning on buying a fixer and then reselling it. Basically, if you are not planning on a long term investment, this may not be the ideal market for you. If you are planning on flipping a house, be very careful. Take the time to work everything out ahead of time. Get some bids from a reputable contractor and work closely with your Realtor to get an honest idea of what price your rehabbed home will likely sell for in this buyers market. If I can be of service, please do not hesitate to contact me at izzy@thetimwoodgroup.com .

Big Bear home sales hit a two year high in July 2009.

Home sales rose 9% when compared to the June numbers (84 v. 77), and 35% when compared to June 2008 (84 v. 62). This is great news for the Big Bear real estate market as it is the second strong month for home sales. Even if prices are still a bit volatile, strong sales are always positive sign.

It is important to keep in mind that in a normal market, sales should be in the range of 150-200 per month.  We are still a long ways from that.

29, or 34%, of the 84 home sales in Big Bear were bank owned. This is a just a touch higher than last month, but still well below the 50% mark we were seeing earlier in the year.  11 of the sales, or 13%, were short sales, which is twice as many as last month. Short sales should continue to make up a decent amount of sales in the coming months.

That means 44, or 53%, of the sales in July 2009 were “organic”, or traditional sellers – another strong month for them though it was down about 10% from June.

Big Bear Home Prices

Though the median price for July 2009 was higher than July 2008 ($227,000 vs. $205,000), it did drop from the June 2009 median ($227,000 vs. $265,000). This was the first month in the past 5 that we’ve seen the median price drop month over month.

The median sales price in July was $227,000, 14% lower than last month but a modest, 11% increase from June 2008. (See the chart below for the historical median prices).

With the limited amount of sales and wide variety of prices, it is still too difficult to make any concrete determinations about the real estate prices in Big Bear.

There is an $82,000 difference between the median asking price of $309,000 and the median selling price of $227,000.

The median asking price for bank owned & short sales properties in Big Bear is $199,000, $28,000 below the median selling price of all sales. More importantly, it is $110,000, or 36%, below the median asking price for “organic” sellers. It is no wonder that bank owned properties in Big Bear are seeing 2-6 offers within the first 1-2 weeks there are on the market while other sellers are lucky to get 2-6 showings, let alone offers, in the first couple months.

Homes Currently on the Market

The number of properties on the market for sale in Big Bear stands at a total of 909, down 16 from last month.  This is becoming a very important stat. I hear all the time about how people think we have so many properties on the market and, in fact, we do not.  Just a few years ago, there were 1300 to 1400 homes on the market.  For the past 8 months, we’ve remained under 1000 homes for sale.  Given that the summer months are when we typically build up the inventory, if the number remains under 1000, and sales continue to pick up, things will get better for Big Bear home sellers.

Big Bear Home Sales – Thru July 2009

Year To Date Comparison (1/1- 7/31)

Year to date, sales in 2009 are up 26% from the 2008 number, and only 6% from 2007 (gaining).  But, prices are still down 15.4%  & 17.4% respectively for the median & average sales prices. The rate of price drop appears to be lowering, stay tuned on that.

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* Note: The charts above will be updated on a monthly basis. It represents single family home sales in the Big Bear area, including Big Bear Lake, Big Bear City, Moonridge, Fox Farm, Sugarloaf, Erwin Lake, & Fawnskin. Data courtesy of the Big Bear MLS. These numbers do not include raw land or condos nor does it include homes in the Big Bear MLS that are located out of the Big Bear area.

Related Articles

Big Bear Home Sales – June 2009 And Second Quarter 2009

Big Bear Home Sales – May 2009

The number of Big Bear properties that went back to the bank (future bank owned listings) in June 2009 was an all time high at 52, 8 more than the previous high of 44 set in May.

In total, the foreclosure filings for the month of June 2009 were down 2% from May 2009, but up 34% from the June 2008 numbers.  Keep in mind, foreclosure filings are made up of Notices of Default, a recorded document that is the start of the foreclosure process, Notices of Sale, a recorded document that sets the date for the Trustee Sale, and lastly, Trustee Sales, properties that go back to the bank.

Here’s how they broke down for June 2009.

Notices of Default - 90 total, down 5% from May but up 14% from June 2008.

Notices of Sale – 69 total, down 9% from May but up over 57% from June 2008.

Trustee Sales – 52 total, up 16% from May and 49% from June 2008.

There’s been a lot of talk out there about the real estate market bottoming out.  In Big Bear, it seems that prices on the lower end have stabilized, and have even got up a bit.  But, these foreclosure filings show that we are not even close to seeing prices get substantially better. Prices may have leveled off, but they will continue to be depressed until we see the foreclosure numbers start to slow down.

From the graphs above, that does not appear to be happening yet.

Related Articles

Big Bear Foreclosure Numbers – May 2009

Big Bear Foreclosure Numbers – April 2009

Big Bear Foreclosure Numbers – March 2009

Big Bear Foreclosure Numbers – February 2009

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Click here to see the embedded video.

I see a lot of sellers in Big Bear saying they are motivated to sell, yet they continue to ignore the market reality and overprice their home. “Seller motivated, bring all offers” is pretty commonplace in the agent comments of the Big Bear MLS or other real estate websites. But if you are truly motivated as a seller, you don’t really have to say it. Your actions of pricing the property correctly, and doing all you can do to help the sale (curb appeal, staging, making it easy to show), will show that you are motivated.

Don’t tell people you are motivated, show them.

Even buyers can show motivation. Putting a strong deposit down and getting pre-approved are both great ways to show the seller and agents you are motivated.

Like the video above? Check our some of my other real estate video topics here.

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