Buying or selling a home in Big Bear can come with its share of uncertainties, and wildfire adds a layer of concern. The big question is: Will the recent Line Fire disrupt the local real estate market?
While we can't predict the future, history offers some clues. Over two decades ago, the Big Bear Valley faced the 2003 Old Fire, which was much larger and more destructive.
By looking at how it impacted the housing market, we can get an idea of what to expect this time around.
Important note: 2003 was the first year Big Bear Valley transitioned from paper-based Multiple Listing Service (MLS) reporting to an electronic system. Because of this, data from 2002 (the year prior to the fire) isn’t available. This limits our ability to directly compare pre- and post-fire trends, so the year after, 2004, becomes our main point of comparison.
Key Factors That Could Shape the 2024 Line Fire’s Impact
Market Trends: In 2003, the real estate market was on the cusp of a major boom. Today’s market is different, with higher interest rates, uncertain inventory, and the lingering effects of 2023—the slowest year for U.S. home sales in nearly three decades. In 2024, sales have seen only modest changes, and with the added uncertainty of an election year and the recent wildfire, it's possible that the market will react differently than in the past.
Fire Size and Damage: The 2024 Line Fire is smaller in scale compared to the 2003 Old Fire, with very little property loss. Its reduced severity may mean that any effect on buyer confidence will be limited.
Insurance Market Headwinds: After the 2003 Old Fire, many insurance companies paused issuing new policies in the Big Bear area, but this was only temporary. Today, the insurance climate in California is vastly more restrictive, with major insurers pulling out of the state or limiting new policies due to wildfire risks. While there's currently a moratorium preventing insurers from dropping existing policies in fire-affected communities, securing new coverage in forested areas like Big Bear remains challenging. This situation could lead to prolonged escrow periods and impact overall market activity.
Comparing the 2024 Line Fire to the 2003 Old Fire
The Old Fire was devastating, burning over 91,000 acres and destroying nearly 1,000 structures (though none in the Big Bear area). In contrast, the 2024 Line Fire, although serious, has burned just under 44,000 acres and destroyed only one structure. This smaller scale suggests that any lasting real estate market impacts from the Line Fire could be less severe.
Line Fire | Old Fire | |
Date Started | 9/5/24 | 10/25/03 |
Date Contained | 93% containment* | 11/14/03 |
Number of Days | 33 | 20 |
Acres Burned | 43,978* | 91,281 |
Structures Destroyed | 1* | 970 |
Structures Damaged | 4* | 7 |
Evacuations | Mandatory: Big Bear Lake (Dam to Alpine Slide) from 9/11 - 9/14/24, Warnings only, for the rest of the valley. | Mandatory: Entire Big Bear Valley |
* Information is as of 10/9/24 |
What Happened to the Number of Home Sales After the 2003 Old Fire?
To get a clearer picture of how the 2003 Old Fire impacted the market, we need to start with accounting for the typical escrow period of 30 to 45 days. The fire lasted from October 25 to November 14, 2003, so when you add in the escrow time period, most sales finalized in December 2003 and January 2004 reflect its effect. What exactly happened during that time? Let’s take a look:
November 2003:
Home sales dropped 3.18% month-over-month, reflecting the usual seasonal slowdown from summer into autumn and winter. Compared to the next year, November 2004, sales were down 9.21%. Importantly, both September and October 2003—before the fire—saw year-over-year declines of 10.67% and 14.01%, suggesting that the market was already shifting for other reasons. It’s also worth noting that 2004 marked the start of a boom in the real estate market.
December 2003:
This was the first month that could indicate a meaningful shift in sales due to the typical 30- to 45-day escrow period. The month saw an increase of 8.55%Â in sales, which was a positive sign. Additionally, year-over-year comparisons show that 2003 recorded only 1.21% fewer sales than 2004, suggesting that the Old Fire did not significantly deter buyers.
January 2004:
A sharp 37.58% month-over-month drop occurred, though this mirrored an even more pronounced decline the next winter in 2004, suggesting that seasonal trends, not the fire, were the primary factor.
Did the Old Fire Impact How Quickly Homes Sold in Big Bear? Understanding Days on Market
Days on Market (DOM) is a crucial indicator in real estate, reflecting how long a property stays on the market before selling. It provides insights into market demand and shows how external factors, including natural disasters, can influence buyer interest. Generally, a shorter DOM suggests a competitive market, while a longer DOM may indicate obstacles to sales.
In 2003, during the mandatory evacuations and the aftermath of the Old Fire, insurance companies temporarily halted new policies in the Big Bear area. This created challenges for buyers, as many had to rely on high-risk insurance options or basic coverage through the California Fair Plan, which mandates that insurers underwrite a portion of high-risk policies. These insurance hurdles often delayed closings, impacting market dynamics.
Now, let’s examine how DOM for homes in Big Bear shifted from September 2003 through March 2004 compared to the following year.
October - December 2003:Â
The graph shows that sales numbers for both month-over-month and year-over-year comparisons stayed pretty steady during this time. This suggests there wasn’t a noticeable increase in market time during the fire, or in the immediate aftermath.Â
January 2004:Â
Days on Market (DOM) jumped to 81 days, marking a +12.50% rise from December. While that might not seem like a huge deal on its own, it becomes more significant when you compare it year-over-year to January 2005, where it increased by +16.05%. This gap in the two years points to the Old Fire having an effect on how long homes took to sell.
February 2004:Â
DOM held steady at 81 days, showing a consistent trend. When looking at year-over-year data, DOM went up +22.22% compared to February 2005, which suggests that the Old Fire still had lingering effects. This could be because buyers were having a tough time getting insurance after the incident.
March 2004:Â
DOM dropped to 59 days, which is a big month-over-month decrease of -27.16%Â from February. This quick turnaround indicates that the market was bouncing back and that any lingering effects from the Old Fire were fading.
This overview shows how DOM can shift in response to major events like wildfires, with an initial rise followed by a quick return to normal.
Median Sale Price Comparison
Another important factor to consider is how sale prices were affected post-fire. Here's a comparison of median sale prices during the 2003/2004 and 2004/2005 periods. Despite the fire, sale prices in Big Bear continued to climb throughout the 2004/2005 period, with significant increases month-over-month, reflecting the market's resilience and demand for mountain properties.
November 2003:
The median sale price stayed steady at $198,000, showing no change from the previous month.
December 2003:
Prices increased by 6.06%Â month-over-month, bringing the median sale price to $210,000. This uptick marked a positive sign that buyer interest and market confidence were not derailed by the Old Fire.Â
January 2004:
The median sale price dropped to $194,000, down 7.62%Â from December. This decline seems more seasonal than fire-related, with the year-over-year trend lines showing similar patterns of ups and downs. Even though 2005 prices were higher, the overall movement followed the same path.
February 2004:
The median sale price climbed back to $199,000, a 2.58% increase from the previous month, bringing it in line with pre-fire pricing from October.
March 2004:Â
The median sale price edged up to $199,999, a slight 0.50%Â increase from February.Â
Throughout the four months following the fire, the market held steady, with consistent median prices. This suggests that the fire had little to no lasting impact on sale prices, and the lack of major fluctuations points to a resilient market.
Key Takeaways from This Post
Days on Market Increase: the only noticeable effect from the 2003 Old Fire was a rise in Days on Market, likely due to insurance challenges. Similar issues could arise with today's more restrictive insurance market.
Steady Prices: Home prices remained stable during the 2003 Old Fire and in the months that followed, showing resilience in the market. However, today’s market is different, with higher interest rates and slower activity.
Sales Dip: A minor dip in sales occurred immediately after the 2003 Old Fire, but with 2023 being the slowest year for U.S. home sales in nearly 30 years, any rebound in 2024 may be more tempered.
What’s Likely to Happen Next?
Looking back at the 2003 Old Fire compared to the 2024 Line Fire helps frame the potential impacts on Big Bear's real estate market. The effects from the Old Fire were more of a short-term blip than a lasting disruption, suggesting that the Line Fire on its own might not cause significant long-term market shifts. However, in 2024, the real determinants of change may be broader: higher interest rates, an already slowing market, and a contentious election year all contribute to an uncertain environment.
Fires are part of life in mountain communities like Big Bear, and both buyers and sellers tend to adapt quickly. Buyers may proceed with more caution, leading to tougher negotiations, while sellers might hesitate to list homes if they sense instability. If that happens, the current rise in inventory due to the fires could quickly shift to tighter supply, which might stabilize prices.
Despite these concerns, Big Bear’s real estate market has historically shown resilience. While understandable worries over the Line Fire exist, long-term disruptions seem unlikely. With patience and staying informed, buyers and sellers are likely to see the market recover sooner than expected.
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