Big Bear Bummers

Address: 2377 Paramount Rd, Big Bear Lake, CA 92315

Redfin: https://www.redfin.com/CA/Big-Bear-Lake/42377-Paramont-92315/home/4113713

Beds/Baths: 4 bed, 2 bath, 1,802 squares

Purchase Price (1/2022): $757,000

Down Payment (20%): $151,400

Asking Price: $699,900

Difference: -$57,100

Commission (3%): -$20,997

Total Gain/Loss: -$78,097

I respect this seller because at least they acknowledge they overpaid in 2022, and accept the fact that they are going to take a significant financial hit.  Unlike the hordes of recent buyers clogging up the MLS with their Wishing Prices (a denial-driven price that guarantees a profit for all that hard work of owning real estate for 19 months) and Washing Prices (a price that just so happens to net them a “wash” after commissions – after all, there is no way they could actually lose money given their brilliant investing acumen), this dude gets it. 

Unfortunately, they’ve been on the market for almost a month with no action.  Even this asking price – $57,000 less than they paid in 2022 – hasn’t been enough to entice a buyer.

And despite the listing description’s claim that “all the work has already been done,” it sure looks like the new buyer will have to put in some work after purchase. For example, what’s going on in the bathroom? Looks like old water damage that was never properly repaired:

And is it just me or is the wall trim bowing? Although I understand deferring repairs and maintenance to minimize losses, what kind of message does this send to your potential buyers?

And I’m no expert, but that retaining wall doesn’t look up to the job (or cheap to fix).

I’m not a huge fan of converted garages – I would personally convert at least half of it back to a functioning space to protect my car. But for a short-term rental this kind of game room makes sense. Can someone clue me in to what is going on with the wall?

At least the kitchen doesn’t seem to need anything. Pretty tidy, actually.

Look, even if these sellers miraculously find a sucker – ERRRR, buyer – at today’s asking price, they are guaranteed to lose a huge chunk of their $151,000 down payment. But if they have to drop the price even more to attract a seller (spoiler alert: they do), there is a real possibility they will lose their entire down payment. 

But I thought real estate only went up!

I don’t know about you, but setting $100,000+ on fire after just 2.5 years of ownership sounds like a really bad time. But that’s the reality of the Big Bear market for pandemic-era buyers.

So the question is: How low will the seller have to go to finally free themselves of this Fox Farm albatross? I have a feeling they’re not going to like the answer.

But just in case you think this is a bargain and are interested in buying, let’s crunch some (over-simplified) numbers:

Purchase price: $699,900

Down Payment (20%): $139,980

Monthly Payment: $4,785/mo (@7.4%)

But hey, if you can’t swing 5 grand a month you can “just rent it out on VRBO” to help with the mortgage. Because we’ve never seen any downsides to that bulletproof plan!

From what I’m seeing, anyone buying this place at the current asking price is catching a falling knife. I think we’re in the first innings of Big Bear price discovery and have a long way to go before we find it.