Maine Lakefront Real Estate – A Lesson in Timing the Market

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Maine Lakefront Real Estate – A Lesson in Timing the Market


At the height of the seller’s market in the summer of 2004, I met with a seller, a resident of Florida, who owned a great family compound on one of the largest lakes here in Maine with three separate camps on over five acres. I recommended an asking price of $1.1 mllion. I told him that demand was exceedingly high and supply was very low.
During our discussion he realized that he could save a bunch on capital gains taxes if he would become a Maine resident for two short years. I cautioned him that the market can change abruptly and reminded him that “man plans and God laughs”.
He said that owning lakefront property in Maine was a sure thing. I wished him well. Two years later, almost to the day, I met with him again. He had become a Maine resident for the past two years. He had committed to stay in Maine a minimum of six months a year. This was twice as much time in Maine as the three months he formerly stayed. He had to come earlier in the Spring and stay later into the Fall. But now, he was ready to sell the property.
After reviewing the comparables, I told him the market had changed. His property was now, after two years, worth less, about $865,000. He couldn’t believe it and, after an hour of us haggling, arrived at an asking price of $925,000. Approximately one year later, after several price reductions, we sold the property for $859,000. He had gone through a lot of bother for nothing. In fact, it cost him money
Now why did I tell you this story? Was the seller foolish? Was he greedy? Perhaps, but I gotta tell you he’s one of the smartest, saviest guys I know. He simply overplayed his hand. There was one big variable he could not control. He couldn’t control the market.
Right now demand is low and supply is high. This is the perfect time to buy a lakefront home in Maine. Five years from now many of today’s buyers, who sat on the sidelines paralyzed with fear during the greatest buyers market in their lifetimes, will be shaking their heads saying ” I shoulda, I coulda, if only I woulda”.
Since gasoline has gone from $4.14 a gallon to $3.68 a gallon, a reduction of 46 cents a gallon, the real estate business has picked up. Offers are being made and offers are being accepted. Why would a 46 cents a gallon price reduction in the price of gasoline cause longtime lookers to make offers? My take: A little good news goes a long way. Good news made some folks more comfortable about making a buying decision. Fear took a step back.
Some buyers, however, keep looking. Their search now has evolved into a ongoing quest for the perfect house at a discounted price. They deprive themselves and their families a lakefront home in Maine fearing they might buy too soon, not at the bottom of the market.
Years ago I was a sales trainee with a large national company. I was sent to the home office in Dayton, Ohio for sales training. For two weeks a number of sales trainers lectured us about the “dos” and “don’ts” of sales work. The sales trainers, all pretty boys who looked good in three piece suits, had spent a bit of time in the field and presumably had experienced some measure of success.
But occasionally a real sales manager, a company legend and icon, would be brought in from “the field” to tell us how “the cows eat the cabbage”. (Don’t you love the midwest?) One crusty old sales manager told us, “Fellas (no women sales reps back then), people are motivated more by fear of loss than by expectation of gain.”
Diane Monaco and Sandi Potter, our capable, exclusive buyer agents, have told me that some buyers have seen 50 or more houses and have failed to find something they like. What??? When I hear things like that I know that the fear of making a bad decision is clearly at the wheel and that the road for some lakefront buyers will be a long and bumpy one.
By the way, if you’d like to take a look at some current lakefront listings it’s as easy as clicking right here on our Lakefront Locator. View all the current lakefront listings for the entire state on this single website!

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