Lake Arrowhead, California. We have definitely seen a turn in the market since the end of 2005. Inventory is up -- way up. We currently have more listings available than what I have seen in many years. Our Multiple Listing Service states there are over 400 available homes in Arrowhead Woods and over 1,000 between Crestline and Green Valley Lake all inclusive. We still have buyers, but not like last year. Why? My only explanation is this is due to the Bad Press. There is no other logical reason.

With interest rates still very low, buyers should be abundant and anxious to invest in a mountain home, be it for a primary residence or a second / vacation home, or even for an investment / rental property. You can still get a lot more home for your money in Lake Arrowhead when compared to Los Angeles, Ventura, Riverside, Orange or San Diego Counties. For the last six months our median list price was $367,000 in Arrowhead Woods, and our average list price was $472,270. In May (2006) the average sale price in Arrowhead Woods was $545,851. Our highest priced sale was $1,900,000. But don't let this fool you. We do currently have a few homes for sale in the upper end between $10,000,000 and $15,000,000.

So those are the stats. But you say you hear that prices are dropping. Not true. List prices, yes, are being reduced from the hopes and dreams of the sellers who were wanting to catch the last wave of our 30% appreciation. But then reality hit. We are back down to our normal 4.5% to 5% annual appreciation. And you know what? This is great! So now you are wondering if I've lost it. Right?

OK, here is your free real estate investment lesson. For the sake of round numbers, let's say you buy a house for $100,000 with 20% down. That's a $20,000 investment. Right? Now, after one year, let's say your house appreciates only 3% which would be $3,000. Now your investment is worth $23,000. Folks, that is a 15% (3,000 divided by 20,000) return on your investment (ROI)!!! If the appreciation hits 5% or $5,000, then you are looking at whopping 25% ROI. These numbers will vary based on purchase price, down payment, and appreciation. Still, you are basically looking at one heck of a return on your money that you cannot get from a bank or a relatively very safe stock investment. If you can, please let me know.

Right now is the perfect time to make that move, get that second home, or just generally invest in real estate. Here in Lake Arrowhead, the summer rush is over. Now is the time to buy to be able to get in in time for the Christmas Holidays. Also, the sellers might be a little softer now for fear that a long winter may lie ahead. Of course, if the house is priced right, it will sell quickly and at or above asking price.

Lake Arrowhead real estate is by a large degree mostly second homes. A beautiful vacation area and resort, Lake Arrowhead is an easy drive from neighboring cities and counties including Los Angeles, Orange, Riverside, and San Diego counties. So, take a close look at your finances -- and more importantly, your desires. Maybe it's time you considered a home in Lake Arrowhead, the "jewel of the San Bernardino Mountains."

I hope you find this information helpful. Let me know what you think. I appreciate your input.
-- Glenn Tinturin

National Forecast