We talk a lot around here about the Big Bear real estate market, but today we're going to be discussing the real estate market in general. I realize that many of our readers here have their primary homes "off-the-hill", and they might appreciate some discussion about their situation with those properties right now. Of course, this information applies to investment and vacation homes in Big Bear as well, it's just that our "information net" is going to be cast a bit wider here.
As a seller, it's important to understand that the current housing market is vastly different from what we've seen in recent years or even decades. Not too long ago, most home sellers might have waited weeks or even months to receive an offer, and even then, it might fall short of their expectations. Buyers could be particularly difficult, driving a hard bargain or insisting on extensive repairs and concessions before finalizing the sale.
But the COVID-19 pandemic has wrought significant changes across nearly every aspect of life, and real estate has been no exception. In the midst of the pandemic, remote workers began to realize that their living situations no longer suited their needs. Freedom from the daily commute convinced many of them to relocate, and with homes in high demand, bidding wars erupted nationwide. Many buyers were willing to go above and beyond the asking price to secure their dream homes quickly and easily.
For a time, this was great news for home sellers - but with the pandemic winding down, the situation has shifted yet again. It's now more important than ever to know precisely where the market stands and how to make the most of it when selling your home. By understanding the latest trends, you can play your cards wisely and ensure that you get the best possible offer and terms for your property.
The Housing Market and Covid-19
The COVID-19 pandemic has had a profound effect on the housing market. According to Danielle Hale, the Chief Economist at Realtor.com®, "The pandemic has been a once-in-a-lifetime experience that has caused us all to fundamentally reconsider our lifestyles and priorities. Even as things begin to return to normal, the impact of these changes is likely to continue reshaping our decisions for years to come".
One of the most significant consequences of pandemic lockdowns has been widespread recognition that existing living spaces may be insufficient to meet our evolving needs. As real estate agent Jason Gelios points out, "Buyers are increasingly seeking larger, more functional homes that can accommodate the demands of remote work. Many people who once worked out of their dining rooms or makeshift "cloffices" now want a dedicated workspace where they can focus and be productive". (PS - "cloffices" is Realtor-speak for Home offices in closets. LOL)
With no need to stick close to the office, remote workers are also casting a wider net in their house-hunting efforts. Previously overlooked areas have become increasingly popular, especially if they offer outdoor space, tax benefits, and the flexibility required by remote work. We have many more full-time residents here in Big Bear than just a few years ago, and many of them work from home or "telecommute". In short, while the pandemic has undeniably created some challenges, it's also opened up unforeseen opportunities for both buyers and sellers alike.
Home Prices Are Still Up There
One of the most noteworthy features of today's real estate market is high home prices, which have reached record levels in recent months. According to data from June, the median list price was an astonishing $449,000 in California - a steep increase over the previous year. While prices have since subsided somewhat (with November's statewide median hitting $417,000), they remain well above previous benchmarks.
These high prices have predictably buoyed homeowner equity to new heights, providing countless homeowners with the opportunity to "cash out" and move on to other ventures. As Beatrice de Jong of online real estate transaction company Opendoor explains, "This is undoubtedly an attractive time for sellers seeking to get top dollar for their properties".
However, it's worth noting that this favorable climate comes with a significant caveat. Anyone who sells their home in search of a new property will likely need to contend with the same high prices currently affecting the market - not to mention rising mortgage rates. Despite this, there are still many reasons why selling can be a wise decision, particularly if you work with a trusted real estate agent who can offer valuable guidance and support throughout the process.
Also Up Are Interest Rates
The increase in interest rates has resulted in the doubling of mortgage rates over the past year, now ranging from 3% to 7%. This has placed a greater financial burden on potential homebuyers, making it more difficult for them to obtain loans to afford a home. Consequently, there has been a notable decline in demand. While homeowners who secured low-interest-rate mortgages over a year ago may opt to stay in their homes rather than buy a new one at a higher rate, others may still put their homes on the market for unrelated reasons.
The Seller's Market Is Still In Effect
Although rising interest rates have dampened demand to some extent, the current seller's market that the pandemic spurred has yet to dissipate entirely. Unprecedented home sales at record-high prices characterized this booming market fueled by limited home availability, quick home turnovers, and soaring home prices.
Buyers in the midst of house-hunting are typically motivated by personal circumstances rather than changes in the market. For instance, many couples are getting married, moving in together, starting a family, or planning to do so.
Finally, while current market conditions might favor potential sellers, personal factors should also be kept in mind when determining if it is the right time to sell: new job opportunities, retirement, life changes such as the departure or arrival of family members in the home, and other personal circumstances should all be evaluated.
Your own personal needs and wants should always be the ground on which any decision to sell your home is made.
PS
Dear Reader,
I hope you found the above information useful. Whether you are located in Big Bear or anywhere else in Southern California, my team at Bruin Trojan Realtors is here to offer our expertise and guidance whenever you have a need to sell your property. If your home is situated in an area outside of our reach, we have relationships with some of the best Realtors around and are more than happy to connect you with one of them.
So, if you're thinking about selling and would like assistance from the most reliable team around, please make sure to give us a call. We're always ready to help.
Warmly,
Janet
(909) 585-4991
