Why Maine Lakefront Property is a Good Long Term Investment

Out and About for the Sebago Lakes Region of Maine April 29 to May 5
April 28, 2010
City Amenities in Taylor Pond’s Lakefront Neighborhood in Auburn, Maine
May 2, 2010

Why Maine Lakefront Property is a Good Long Term Investment


Maine cottage on the shores of Brandy Pond in Naples, Maine
Back in 2003 I met with an elderly gentleman who purchased his lakefront camp (or what folks from Massachusetts call a “cottage”), back in 1962. He was a former IBM salesman – a pretty big deal in the 1960s.
He purchased his Sebago Lake summer home for $12,000. Now 41 years later he was selling. Although lovingly maintaining the home for 40 years, he had made no major repairs, improvements or expansion to the humble structure. We listed the home for $549,900 and it sold for $529,900.
I asked him what he thought of his investment. He told me that he enjoyed 40 fabulous Maine summers and, added jokingly, earned a half million for his trouble.
He described to me the history of his investment. He said that although the trend was always up, the path was cyclical or one of peaks and plateaus. The property would go through a 5-7 year period of rapid appreciation, what he called peaking, and then level off or plateau for 5-7 years. Then it would once again start a peaking cycle. The last peaking cycle was the period from 1998 to 2005. The present plateau cycle began in late July, 2005 and here we are, 5 years later in late April, 2010, probably closing in on the end of a plateau period.
You may be wondering why I would write about my experience with the IBMer, now, seven years later. Only to illustrate how markets move in cycles and that buyers and sellers sometimes need a longer view to keep a proper perspective.
This week I received a phone call from a buyer of lakefront property. He inquired why a new listing had disappeared from my website. I told him that it was under contract and no longer available.
He was stunned. He said he had been looking for just the right place for over 2 years and that the place was not only perfect but priced right. I asked him why he didn’t make an offer. He said that he felt there was no rush to do so and that if he waited the price might go down.
Folks, we may be nearing the end of a plateau. Lakefront buyers have had it great for the last five years but, as we know, all good things eventually come to an end. The end of the greatest buyers’ market we have seen in our lifetimes may be near.
So, dear lakefront buyers, if you see something that you like and it’s priced right, buy it.
By the way, the property that the buyer missed out on because he was waiting for the price to go down? It was on the market for a week and sold for cash at the asking price. True story.

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