Archive for December, 2008
Buying Maine Lakefront Real Estate – Two More Considerations
December 30th, 2008 categories: Observations and Commentary
In our last blog post, Tom spoke about some issues regarding purchasing a year round vs. seasonal lakefront home. Here are a couple of more things to consider.
Are you looking for a lakefront home or a lake access home?
Nine out of ten people when posed this question will answer “lakefront home”, but consider the ramifications.
A lakefront lot will cost 2.5 to 3 times as much as a lake access lot. A lake access lot on Long Lake will run $100k to $125K. A lakefront lot, $300k to $375k. On Crystal Lake, a lake access lot will run $60K to $80K. A lakefront lot on Crystal Lake will run $175 to $225k. If your budget is limited, lake access might be for you.
Do you wish to be on a small, medium, large or very large lake?
Most buyers when posed this question will answer “medium or large”. Once again, consider the ramifications. The same size lot ( half acre with 100’frontage) on a small lake will run $150k, on a medium $250k, on a large $350k, and on a very large lake $450K. If you are a canoer or a kayaker you want to be on a small lake or pond away from the din and wake of the power boaters. If you are a power boater, the bigger the lake the better. So choose based on your wants and needs, not what the broker wants to sell you.
If your budget is limited, discuss what you’re looking for with an exclusive buyer’s agent. The buyer’s agent will then match your needs and budget to the available inventory of lakefront homes.
One last thing - not all homes for sale are on the MLS or website portals. Buyer agents know listings that have expired or will be coming soon to the market, so allow the buyer agent to do their job. They are interested in meeting your needs while staying within your budget. It’s not only their job, but a point of pride.
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Maine Lakefront Property – Year Round or Seasonal?
December 27th, 2008 categories: Observations and Commentary
When it comes to buying lakefront property answering fundamental questions will greatly affect affordability. For instance: Are you looking for a summer place or a year round vacation home?
Nine out of ten people when posed this question will answer ” year round vacation home”.
However, consider the ramifications. A year round lakefront home will cost one 20% more than a similar seasonal “summer place”. No big deal? Well, it’s the difference between paying $400k for a seasonal or $480k for year round. If you’re only going to be using the place May through September a seasonal place might be for you. Why pay the extra $80,000??
Heating oil is relatively cheap right now, but when heating oil was $4.79 a gallon few lakefront homeowners liked the idea of keeping their year round vacation home heated all winter. With a camp, you close it down in October and reopen it in May. No heat bills!
Seasonal lakefront summer places are what “Mainers” call “camps”. These seasonal structures may look like houses but are missing a number of things that would qualify them as year round homes such as central heat, insulation and full foundations. However, many camps are easy converts to year round use.
So, think long and hard about the “seasonal vs. year round” question. If you know that you’ll be swimming and fishing in the summer and skiing and snowmobiling in the winter it’s a no-brainer. Year round is for you. But if you’re unsure about useage in the winter, being realistic and more practical could save you money both in the short and the long term.
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HGTV’s “House Hunters” Features Maine’s Mr. Lakefront Real Estate
December 19th, 2008 categories: Maine Waterfront Real Estate News
HGTV program “House Hunters” will air an episode on January 1 at 8 p.m. that features local real estate buyer’s broker Diane Monaco of the Mr. Lakefront Keller Williams team in Casco.
A producer for “House Hunters” had contacted Mr. Lakefront real estate earlier in the year after visiting their website and blog. They wanted to feature a Maine lakefront vacation home in one of their program segments. Mr. Lakefront buyer’s broker, Diane Monaco, had been working with several possible candidates and was able to find a couple who were willing to participate in the project.
“House Hunters” takes their viewers behind the scenes as individuals, couples and families learn what to look for and decide whether or not a home is meant for them. Focusing on the emotional experience of finding and purchasing a new home, each episode shows the process as buyers search for a home.
The production crew was here for three days in August doing the shooting and have edited down many hours of work to a half hour program. The segment will follow the Mr. Lakefront buyers as they go through the process of looking at three lakefront homes and deciding which one they would like to buy.
Lakefront homes featured in the program are located on Thompson Lake in Otisfield, Parker Pond in Casco, and Moose Pond in Denmark. They also did some production in the Mr. Lakefront offices in South Casco.
While the HGTV website shows the episode scheduled for 8 p.m. on January 1, they always suggest you check your local listings for the correct time in your area. We hope you’ll tune in and check us out.
UPDATE! Click here to watch this House Hunters episode that aired on HGTV on January 1, 2009!
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Maine Waterfront Property – Whistling Through the Graveyard?
December 12th, 2008 categories: Observations and Commentary
Everywhere we turn, it seems, the media dishes out the doom and gloom. The predominant feeling in most any market right now is fear.
But there is some good news out there if you care to hear it. How about this? The rate for a 30 year fixed rate mortgage is at a 4 1/2 year low. That’s right – a 4 1/2 year low!
I got the news from my email where I get dispatches from financial gurus and news organizations who ply their trade online. Here’s what Leeb’s Market Forecaster had to say this week:
12/8/08 -”Strange as it may seem, the one segment of the economy that gives us cheer is housing. Housing has been the weakest sector of the economy for some time. However, mortgage applications rose 112% last week – the biggest percentage gain in history. Refinancing also leaped upward by some 203%. With some trepidation, we are inclined to say that the worst may be over for housing.
We also note that October’s figures showed houses to be more affordable than any time in the last 20 years. Today, with the Federal Reserve buying up mortgage-backed agency securities and forcing mortgage rates lower, we expect affordability has reached a record high. Housing prices have also come down a huge amount. Americans know a bargain when they see one, and will surely increase their buying thanks to record high liquidity.
Housing was a significant catalyst for the downturn in the stock market, and we believe a turnaround in housing is a needed catalyst for an upturn in the economy. We are not about to stand on a soapbox and shout that the worst is over. However, the improved figures from the housing sector are certainly a positive sign.”
And this from Marketwatch:
“December 11, 2008 – SAN FRANCISCO (Marketwatch) — Freddie Mac said Thursday that the 30-year fixed-rate mortgage average dropped from a week ago to a four-and-a-half year low as bond yields declined. The 30-year fixed-rate average was 5.47% with an average 0.7 point for the week ending Dec. 11, down from 5.53 % a week ago. Last year the average was 6.11%. The 30-year average has not been lower since March 25, 2004.”
Now, I’ll admit there’s plenty of bad financial news out there and much to be concerned with, but there also seems to be one or two bright spots dotting our financial horizons. If you’re a potantial buyer of lakefront real estate you need to know about these bright spots as it will help you determine when a good time might be to get back into the market.
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Maine Lakefront Real Estate – Making the Best of a Tough Market
December 7th, 2008 categories: Observations and Commentary
If your a potential buyer of lakefront property or an owner who may be comtemplating a possible sale, it’s tough to know quite what to do in this market.
If you bought in the last five years or so and are needing to sell, for whatever reason, you may well be looking at a loss – and that scenario may hold for another year or two, nobody really knows.
If you’re a potential buyer, then you are wondering where the bottom is so you can get in at the optimum time. Again, nobody knows when that will be – or maybe even if that time has already passed.
Economic markets are all being seen in the rear view mirror – with varying lag times. As an example, we just found out that we have been in a recession for about a year. Some will tell you that by the time we can finally quantify and recognize a situation, the situation has passed and we have moved on to another condition in the market. The real estate market is no different.
As a potential buyer or seller of Maine lakefront property the best you can do is educate yourself and stay in touch with the market. We do the same here at Mr. Lakefront as we are regularly contacted by potential buyers and sellers alike wanting to know our opinion of the local lakefront real estate market.
There are some general areas we need to keep apprised of. One is the relation of the overall, nationwide financial crisis to what’s going on in the real estate market. Then you have to divide up what is pertinent to the overall market compared to the local real estate market and then, even more specifically, to the second home/lakefront market. Then you have to look at all things in the context of “what is perception/emotion and what is reality“.
Doing all of this is a tall order. When we look to Washington and see the greatest economic minds grappling with the economic situation, many come away feeling there’s a lot of bumbling and ineptitude going on. If these guys can’t seem to figure out what to do, how confident can we feel when it comes to choosing the best course of action for ourselves?
There is some solace in educating ourselves, as I have said. Knowing what other people are thinking and doing will at least provide us food for thought, which may then help us know which actions to take.
Accordingly, I offer up another recent article from the NYTimes that talks about this second home market in more detail. It may not provide answers, but it will at least be thought-provoking and help you gain some insight on what’s going on. To go to the article click here.
If you’d like to stay abreast of the Maine lakefront real estate market, go no further than our very own Lakefront Locator. You can see all the current listings in one place and navigate through them in a variety of ways.
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Maine Waterfront Property – Opportunity Will Knock
December 4th, 2008 categories: Observations and Commentary
If you are among those who think we’re in the middle of a deflationary cycle with regards to lakefront real estate, you’re not alone.
It would seem that buyers continue to sit on the sidelines thinking prices will continue to go down. So far, so good, but playing the waiting game is fraught with peril because no one, and I mean no one, can call the bottom of any market – real estate, stock, bond, currency, gold, commodities, or fine art, furniture and antiques.
What we can do, though, is look at trends and draw inferences from history. Look at this report from Leeb’s Market Forecast yesterday:
A widespread thaw in the previously frozen credit market is taking place right now. Rates on conventional 30-year fixed mortgages have dropped to 5.7 percent nationally, down from 6.45 percent in October, according to BankRate.com. That’s a three-year low which has helped to push housing affordability back towards its record high. This fact hasn’t been lost in consumers, as mortgage applications surged by a record amount last week to the highest level since March. Housing remains the key to a successful turnaround and the move in mortgage rates is just what’s needed to get things moving.
If the rate for a 30 year mortgage continues to fall, buyers will find it hard to resist getting back into real estate. The same with stocks – as price-to-earnings ratios continue to drop to historic lows, investors start seeing bargains. When confidence in the future returns (as rates come down and prices fall), fear of the market will be overcome by the perception of opportunity and real value in the market.
At Mr. Lakefront we are not market timers, but we do know that preparation is the key to being able to answer that door when opportunity knocks.
Keep in touch with a local lender to know what that 30 year mortgage rate is doing. With the lack of activity in the real estate market over the last 12-18 months you know there has to be a lot of pent-up demand.
As soon as buyers perceive that money is available at an attractive rate and a lakefront property comes to market that is priced attractively, that will be their moment to act.
By the way, you can use our Lakefront Locator to stay on top of all the current lakefront listings for the entire State of Maine. It’s easy to use, comprehensive, and updated continuously.
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Tom - MrLakefront
