State of the Big Bear Market
There are three distinct characteristics in all real estate markets. We are either in a Seller’s Market (more Buyers than Sellers), or a Buyer’s Market (more Sellers than Buyers), or a Balanced Market (as many Buyers as there are Sellers).
Today, we have seen a shift in the Big Bear market resulting in a median price drop of approximately 15% year over year ($600,000 homes are no longer worth $700,000 anymore).
As interest rates increase, demand gradually decreases and prices start coming down. Usually, there is a period of time where supply and demand remain constant. This “period of time” is known as a Balanced Market.
Typically, Balanced Markets can last a while. However, most experts predict the “period of time” to stay balanced in our market will only last until the 2nd quarter. As we move into the 3rd quarter, we may see more listings come on the market from many of those owners who were expecting more income from their short term rentals (like they experienced in the pandemic months).
All markets are cyclical. Real estate markets tend to cycle every 8-10 years. Our Seller’s Market peaked in March of 2022. As the supply of homes (Inventory) grows, we will see listings stay on the market longer and eventually see price reductions become more prevalent.
With that said, sales in all price ranges are still being made every day with half the sales resulting in cash or substantial cash down payments. I’m not sure how long any of this will last but I can say that the state of the Big Bear market is a balanced one for the time being.
Until next quarter, see you at the top!
Mike Dolan