Not long ago we heard a lot about how the Deep Creek market was "well and improving daily" and then it was that lakefront sales continue to be "strong." Well given those two statements I am somewhat puzzled by this real estate listing from a local real estate agency. Here you have an approximately $1.3million lakefront listing divided into six fractions. But what is really puzzling to me, however, is that if the market is so strong and was really well and improving daily why are the sellers offering to pay $10k in closing costs and contribute another approximately $10k towards homeowners association fees (although I should add that the listed condo fee over two years comes to about $8.6k not more than $10k but we'll take their word for it)? Could it be that one of the co-owners of this property being one and the same as one of the co-owners of this real estate company does not feel the market is as strong as his staff is leading you to believe?
These type of seller incentives also show that real estate sales data must be taken with a grain of salt. Assuming each fraction sells at full list price it will be listed in the MLS sales data as selling for $219,500 but according to the listing the sellers are giving over $20,000 of that back to the buyers (again taking their word for it), meaning the purchase price which will show up in the data could be inflated by more than 10% over the true purchase price. Using data of such poor quality to make broad, generalized statements about the health of the market can be very dicey and judging by what a co-owner of a local real estate company does to sell his own property could also give one a false sense of security about the health of the market. In this case, I believe what they are telling you via their market updates and what they are doing in their own dealings are not one in the same.
Collectively the real estate agents of Garrett County own a substantial amount of investment real estate so this could be a case of trying to talk up their own investments or what some on Wall St. would call a "pump and dump" scheme. When you see so many agent-owned listings on the market combined with questionable market updates that, during 2008, have declared the market "strong" and "well and improving daily" and declared the credit crisis to be "over" months ago it does raise a few red flags in my opinion. As always, buyer beware.
Where are the market updates that say the market is weak, inventories are exploding, countless agents are trying to sell properties (if it's such a great investment shouldn't they want to hold on to them?) and agents are discounting their own properties? Unless something changes, for more of those type of Deep Creek real estate updates you'll just have to keep reading this blog.
Don't forget to check back to Dan's Deep Creek Blog for future updates.
Friday, August 1, 2008
Puzzling real estate listing ..
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2 comments:
Your blog does contain a lot of truth. Fractional homes have not done very well at Deep Creek so far, they may never, but who knows. Listings are up at all time highs for the last 7 years, although this figure is somewhat skewed by the fact that an abnormal number of timeshare units are on the market. (Timeshares are rarely good investments anywhere) Sales are off appoximatetly 40-45% from the peak year of 2005.
Yet with all this bad news the average and median prices for sold homes for the first 6 months of 2008 remain well within the average of the last 6 years. Other than discussing fractional units (of whuch I have no potential buyers at this time) I am giving all of this info to my clients on a monthly basis. Most people looking to buy are trying to find the bottom of this market. i feel this statistic are showing that that it has arrived. Buyers market come here before anyone realizes it and the next sellers market is going to do the same.
And yes, I am a Realtor and proud of it.
Thanks for your comment. I appreciate your forthrightness and honesty which is something I generally feel is missing from the market updates I read.
You could be right and the bottom could have been reached already, however, many thus far have unsuccessfully announced such a bottom. And still even if a bottom has been reached there are significant headwinds for the market: record high household debt, declining markets in the metro areas where many DCL buyers come from, potentially rising interest rates and historically high levels of inventory that aren't going to disappear overnight. The market updates I have read usually only give one side of that story which is why I have been trying to point out the other side. Instead of reading that the market is "well and improving daily" or "strong" I'd much rather get the real story and see buyers us their own judgement. The most recent update I saw is certainly a step in that direction as are the comments you have left here.
Similarly, I'd much rather see buyers led in the direction of financially sound decisions and mortgage products, not speculative forays aimed at a short-term gain (to pay for a child's education for example) or no-money-down loan products that have gotten so many in over their head. I feel strongly that people in the industry have done a LOUSY job of promoting stability and financial responsibility so I've taken it upon myself to help to educate people of some of the dangers involved in blindly following the advice of some, perhaps even many, in the industry. Some bad apples have certainly given a bad name to a lot of folks trying to do things the right way, but at the same time these people need to be able to rise above the scrutiny and demonstrate a higher level of ethics, service, responsibility and honesty. That is what I hope to see from the real estate agents of Garrett County, unquestionable integrity. Shouldn't that be the goal?
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