No one likes it when somebody calls one’s baby ugly. Almost as bad is the reaction I get when I tell lakefront sellers that their beloved property will, most likely, not fetch the price they have in their mind.
You see, one of my responsibilties here at Mr. Lakefront is to explain to lakefront sellers that overpriced homes in poor condition no longer sell. This is not 2004 or 2005.
In marketing terms, the market has shifted from a seller’s to a buyer’s market.
Background – From 1998 to 2005 the supply of Maine lakefront property was low and the demand was high. In those days even overpriced properties would get offers. Some properties that were overpriced when they went on the market were correctly priced three months later because the market value had risen. A lakefront property properly priced back then would last only 3 to 6 months on the market. The market was so strong that properties would often sell with noticeable defects and neglect.
NOT TODAY!!! Sellers in 2006 were unaware that in the Fall of 2005 the market stopped appreciating. Over the course of 2006, demand subsided and supply grew. Many lakefront homes failed to sell in 2006. Some properties did sell because some sellers sensed that a change had taken place. Demand had softened and supply was growing. However, other sellers stayed on that river in Egypt exclaiming, “I’m not going to give it away”.
During 2007 it dawned on many sellers that to sell their property they needed to compete effectively with other listings in the market. They realized that the market is the final arbiter of market value. They had to adjust the price in order to compete in the new market. They also realized that they had to address cosmetic issues and defects.
The Result – Fewer lakefront sellers are in denial. Lakefront Sellers read newspapers, watch the evening news on TV, and even read blogs, like this one. For them, the good news is that lakefront property values, compared to values in Florida, Las Vegas and other high flying areas have only seen a slight correction. Sellers are more likey today to work with a reasonable offer and less likely to reject them out of hand.
The Buyers Market – What a great time to be a buyer!! Prices are more reasonable. Selection is terrific. And the Condition of available homes is also better. But lakefront buyers must realize that most lakefront sellers, athough motivated, are seldom desperate. Remember that most lakefront homes are second homes that were paid off years ago. A lakefront buyer can do well as long as they don’t overplay their hand.
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