for 335 HICKORY RIDGE Ln SWANTON, MD 21561 courtesy of Redfin.com.
Listed October 22, 2007: $1,190,000
Price Change August 14, 2008: $949,000
Price Change/Relist November 14, 2008: $899,000
Price Change January 5, 2009: $875,000
Luxury "lakefront" and now over 25% below original list price from Fall 2007. So in very simple terms if you had purchased this property at full list price 15 months ago using a 25% down payment totalling $297,500 and 75% financing (fairly conservative 3 to 1 leverage by today's standards), you'd have negative equity today. Well and improving daily indeed. And to think that people complain about their 401(k) account being down 40% when in this case my late 2007 buyer would be down greater than 100% on their "investment" using the same mark to market accounting methods.
Don't forget to check back to Dan's Deep Creek Blog for future updates.
Tuesday, January 6, 2009
New price change this week ..
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4 comments:
I am considering buying this home because I think it’s a great deal.
You are wrong to call the property lake front. You can’t even see the lake from the house! Yes, the parcel of land touches a portion of land owned by the state of MD called lake front but it is a far stretch to compare the house to a true lake front property. My RE agent pointed this out before we even looked at the house. You couldn’t be more wrong about this property if you tried.
P.S. The value of this property has not fallen 25%. The seller is in a divorce and is being forced to reduce the price for a quick sale. Wrong again.
I was only reporting "facts" as outlined by the listing agent in this case. The listing says it is lakefront so it must be lakefront because listings are always accurate and truthful, right?
I didn't say anything about the value dropping by 25%. I only said that by the same accounting techniques that people use to conclude their 401(k) account values are down 40% that someone who purchased this home at its original list price would have suffered any even greater "paper" loss by the numbers I outlined.
If you buy this house at a fair price congratulations to you. I was only offering it as another example that sellers are being forced to lower prices (for a variety of reasons in order to make sales). I stand by that assertion since this property has been on the market for 443 days and is currently listed for about 74% of the original list price.
I looked at this property as well and wouldn't even consider calling it lakefront. It's just a big ungainly house sitting in the middle of a field as far as I'm concerned, with none of the appeal of a real lakefront property. I'm not surprised it's dropped in value so much. The neighborhood they've built there is a monument to the mcmansion craze of the last decade. Maybe this will be the end of these giant dinosaurs and we'll see a return to reasonably sized weekend cottages, which is what Deep Creek used to be all about.
Thanks for your comments. 10,000 sq. ft certainly seems excessive! Did you happen to inquire about the typical utility bills? Just scaling by the size of my house gives an ugly number on top of over $1,000 per month in property taxes. Yikes!
Of course if someone buys it they might just turn it into a rental and deduct all the utilities anyway (so that you and I effectively foot the bill to heat this monstrosity). If we ever want to get serious about solving our energy problems that is one tax loophole that has to go.
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