Distressed Lakefront Property Short Sale Finally Closes

As the book closes on 38 SHINGLE CAMP Ter we are reminded of the tortured listing history that we have tracked over the last few years. Check here to see all blog posts referring to this property.

Final June 2011 sales price: $860,000; May 2006 purchase price: $1,307,000; May 2010 list price: $1,299,000. For what it's worth, the recent sale price is nearly 35% less than the 2006 purchase price, which might be a new benchmark to help reset those buyer/seller expectations.

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2011 Short Sales

Updated June 8, 2011

Sold (4)

LOT #81 MOUNTAINTOP Rd: 2011 sold price: $70,000, listing suggested it was priced $100,000 below true market value. Somehow I'm skeptical. If that were the case why weren't buyers lining up to pay even $50,000 less than market value.

1835 MARSH HILL Rd: 2011 sold price: $675,000; 2005 sold price: $875,000.

321 TREE TOP Way #76: 2011 sold price: $420,000; previous sale was $95,000 for the lot.

199 UPPER HIGHLINE Dr: 2011 sold price: $650,000, another former DC Development LLC property gone bad. Seller (was it the bank or previous owner?) also contributed a $19,500 seller subsidy. Original 2007 list price was $1,099,900. Previous "owner" same as another active short sale listings at 342 Lakefront Links and an inactive, previously-listed, short sale at 335 Waterfront Greens - Morgantown-based LLC.

Active (9+)

200 KENDALL CAMP Cir: listed in 2009 at $689,900 as the owners of less than two years were looking to flip the property to make a quick profit, less than two years later the list price has been reduced to $534,900 - well below their 2008 purchase price of $610,900 - and the listing reclassified as a short sale. Read more in this Deep Creek property profile.

438 MALACHI Way: listed in 2009, relisted in 2010, now listed as a short sale in 2011.

105 HAILEE'S Ln: listed in 2008 for $1,200,000; several price changes and nearly three years later, now listed as a short sale with a list price of $722,500. If someone had bought this house on the advice of local real estate agents in 2008 and wanted or had to sell the property today, they would be looking at an investment loss of approximately $1/2 million. Big commissions for agents, big investment losses for those who took their advice. Consider that next time you consider taking their advice.

164 SUSANS Way, price reduced April 10th.

19 BRIDGEVIEW Ln: previously a pending short sale, now back on the market, current list price: $435,000; 2009 list price: $549,900.

634 NORTH RIDGE Rd.

135 JEFFREY Ln Unit 19-A.

70 PARKSIDE SOUTH Ct: current list price: $975,000; prior list price: $1,295,000; 2006 sold price: $1,275,000 (sold by DC Development LLC to couple from Potomac, MD).

342 LAKEFRONT LINKS Dr: current list price: $825,000; original 2008 list price: $1,199,900. Now listed as a foreclosure.

Pending (3)

252 PARADISE HEIGHTS Dr: pending short sale, current list price: $995,000; prior list price: $1,195,000; 2005 sold price: $1,259,000. Listing mentions that property is turn key with rental income. So here's my question, if the current owner is collecting rental income why is this a short sale where someone other than the current "owner" is taking the investment loss (potentially even you and me)?

38 SHINGLE CAMP Ter: pending short sale, current list price: $999,000, 2006 sold price: $1,307,000. Reduced by $300,000 on September 17, 2010.

111 ROCK RIDGE Ln #10: pending short sale, current list price: $289,900, 2005 sold price: $358,900.

And there are more active short sales that I will track down as time permits. Another question to ask is how many of these sellers are hiding or diverting assets in order to get their short sales approved?? Otherwise, we'd have to assume all of these sellers are essentially insolvent and have no liquid assets that the banks/GSEs could recoup to offset their losses.

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

A cautionary tale from the list of 2011 Deep Creek short sales ..

105 HAILEE'S Ln: listed in 2008 for $1,200,000; several price changes and nearly three years later, now listed as a short sale with a list price of $722,500. If someone had bought this house on the advice of local real estate agents in 2008 and wanted or had to sell the property today, they would be looking at an investment loss of approximately $1/2 million.

Moral of the story: big commissions for agents, big investment losses for those who took their advice. Consider that the next time you consider taking their advice.

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate statistics.

After browsing the 2010 distressed properties list I realized that ..

a shocking number of previously profiled properties were delisted in the final quarter of 2010. Here's a sample of the properties that went from active inventory to shadow inventory.

2087 STOCKSLAGER Rd: most recent list price: $575,000, original list price: $698,750. Listing says "reduced from $599K to $575K thru 12/31/10. Must close by the end of 2010 for this price," as if the price is mysteriously going to rise if it has not sold by the end of the year. I hope no one falls for this joke. Delisted December 31, 2010.

915 DEEP CREEK Dr: recent list price: $650,000, 2005 sold price: $700,000. Delisted December 28, 2010.

2 STILWATER Dr: seller offering to hold first mortgage, recent list price: $799,000, 2005 sold price: $865,000. Reduced another $25,000 on August 30, 2010 - now $130,000 less than August 2009 list price. Delisted December 13, 2010.

8 PHEASANT RUN Rd: short sale, land. Delisted December 12, 2010.

209 HIDDEN VALLEY Ln: most recent list price: $220,000, original list price: $315,000, 2003 sold price: $195,000. After 1000 days on the market, list price is approaching 2003 sold price. Delisted November 30, 2010.

611 MARSH HILL Rd #1: most recent list price: $1,185,000, 2008 sold price: $1,325,000. Delisted November 30, 2010.

20899 GARRETT Hwy: recent list price: $465,000, 2006 sold price: $475,000, list indicates motivated seller, bring all offers. Price reduced August 21, 2010 moving this listing from the "on the verge" list to the actively distressed list. Delisted November 25, 2010.

188 MEDALLION DRIVE Rd: short sale. Delisted November 24, 2010.

19868 GARRETT Hwy: most recent list price: $598,800, 2002 sold price: $600,000. Recently priced below 2002 sold price. Delisted November 22, 2010.

115 WOODLAND Way: most recent list price: $279,000, 2005 sold price: $295,000. Delisted November 19, 2010.

335 MOUNTAIN VIEW Dr: most recent list price: $588,900, 2006 sold price: $675,000. Delisted November 18, 2010.

788 FOXTOWN Rd: recent list price: $297,000, 2005 sold price: $329,900. Delisted October 28, 2010.

209 2ND St: short sale. Price reduced August 10, 2010. Delisted October 5, 2010.

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

Deep Creek Distressed Properties (2010 edition) ..

Updated as of December 31, 2010

List created in response to real estate agent claims that distressed properties were "few and far between." Some properties have sold below 2004 prices, despite claims in 2007 and 2008 that the local market was "well and improving daily" and that property values were still rising and in 2009 that properties were holding "value." See some of these statements at the bottom of this posting.

ACTIVE

2221 DRY RUN Rd: foreclosure.

268 LEHMAN Ln #41: current list price: $559,000, 2007 sold price; $565,000. Based on other sales, this is probably even an optimistic price point.

84 WHISPERING Way: current list price: $575,900, price reduced more than $250,000 since this new construction property was first listed in July 2010.

64 POND Ct: current list price: $549,000, reduced by $109,100 on September 21, 2010. More signs of distress in Lakefront Links/Waterfront Greens.

24 HOOPPOLE Ct Unit B-6: current list price: $314,900, 2005 sold price: $380,000. A lot of searches on this one.

257 MARSH HILL Rd #13: current list price: $314,000, 2005 sold price: $355,000.

93 RIDGE VIEW Ct: current list price: $499,000, original list price: $775,000, days on market: 1258 (nearly 3 1/2 years).

950 GLENDALE Rd: current list price: $825,000. Listed or relisted 4 times since 2007, priced more than $150,000 less than fall 2009.

105 HAILEE'S Ln: current list price: $850,000, original list price: $1,200,000.

360 PRITTS Rd: current list price: $479,000, 2007 sold price: $500,000. Lakefront and listed or relisted five times since 2008. Reduced by $20,000 on September 21, 2010.

486 HAZELHURST Ln: current list price: $649,000, 2006 sold price: $799,000. Bank owned lakefront. Delisted September 3, 2010. Relisted September 9, 2010. Reduced another $50,000 on September 29, 2010.

257 MARSH HILL Rd #2: short sale, current list price: $275,000, 2006 sold price: $319,000. "VERY MOTIVATED SELLER, WILL CONSIDER ALL REASONABLE OFFERS!" Reduced by $24,900 on September 17, 2010.

321 TREE TOP Way #76: short sale.

1758 PIGS EAR Rd: current list price: $99,900, 2007 sold price: $119,900.

40 SUNSET Rdg: short sale, land. Reduced September 8, 2010, October 14, 2010, December 1, 2010.

850 NATIONAL Pike: foreclosure. Reduced September 7, 2010.

46 LAKEFRONT LINKS Dr: Current list price: $399,900, June 2010 list price: $499,900, just reduced $100,000. Agent-owned, Waterfront Greens.

47 LAKEFRONT LINKS Dr: Current list price: $319,900, June 2010 list price: $409,900, just reduced $90,000. Agent-owned, Waterfront Greens.

48 LAKEFRONT LINKS Dr: Current list price: $309,900, June 2010 list price: $409,900, just reduced $100,000. Agent-owned, Waterfront Greens.

50 WATERFRONT GREENS Dr: Current list price: $299,000, June 2010 list price: $399,000, just reduced $100,000. Agent-owned, Waterfront Greens.

1529 PARADISE POINT Rd: current list price: $399,900, 2007 sold price: $395,000. With price cut September 3, 2010, the current owners appear to be slowly accepting reality (think current prices versus 2007 prices).

198 PARADISE ACRES Rd: current list price: $295,000, 2006 sold price: $310,000. Another $5,000 price reduction on top of the $10,000 price reduction on July 9, 2010 which moved this property from on the verge to actively distressed.

264 SANDY BEACH Ln: current list price: $1,289,000, 2008 sold price: $1,400,000 (2008 list price: $1,775,000). This one apparently turned out to be an expensive two year rental for a Pittsburgh area surgeon (add up all the transaction costs, negative equity, mortgage payments, association fees and divide by the number of months owned to see what they really paid per month to "rent" this property). Reduced by another $100,000 on August 30, 2010.

116 TEABERRY RIDGE Rd: short sale.

752 WISP MOUNTAIN Rd Unit 6B: current list price: $479,000, 2005 sold price: $499,000. Previously listed in 2008 and in 2009. Five price cuts since being relisted in March 2010. Another former DC Development LLC property. Built on a clear-cut mountaintop, used as tax writeoff, currently owned by downstate LLC - sound familiar?

247 HERRINGTON MANOR Rd: short sale.

4897 ROCK LODGE Rd: current list price: $60,000, 2004 sold price: $68,500.

218 MIDDLETON Rd: current list price: $599,000, 2005 sold price: $600,000. Current listing agent was buyer and seller's agent in 2005 transaction. He's practically making a career out of selling and re-selling this property.

256 JEFFREY Ln #28: current list price: $299,000, 2004 sold price: $295,470. Just reduced from $330,000. This one looks like another certain investment loss for some downstate folks when you factor in association fees ($185/monthly), transaction costs, etc.

78 CLUBHOUSE Dr: current list price: $499,000, 2005 sold price: $589,000. Another in Waterfront Greens. Listed three times since 2008.

929 DEEP CREEK Dr: current list price: $725,000, 2006 sold price: $750,000. 2008 list price: $1,329,000. Agent is partial owner.

72 WATERFRONT GREENS Dr: current list price: $109,000, 2008 list price: $139,000. Agent-owner offering to pay first year of buyer's mortgage interest. Listing describes Waterfront Greens as ever-popular (the community has certainly gained popularity on this list as 3 others are listed below). Use Ctrl-f to search 'Waterfront Greens' to quickly find the others.

73 KENDALL CAMP CIR Rd: current list price: $825,000, 2007 sold price: $939,900. Another distressed property in Kendall Camp and former DC Development LLC property. The current owners (from Potomac, MD) had initial mortgage balances of approximately $840,000 and a down payment of approximately $100,000. By the time this sale is completed, they will almost certainly have lost the entire down payment and more (including agent fees and transfer costs), so much for those great returns on investment some local agents were touting in 2007 and 2008. By my math that would be a negative return on investment of greater than 100%.

75 BOULDER RIDGE Dr: current list price: $989,900, 2007 sold price: $1,075,000 (2007 list price: $1,295,000), 2004 sold price: $851,700. In this case, apparently the 2007 cash buyer is having second thoughts about this "investment." Another interesting point on this property is that the previous owner is also the co-owner of a local real estate firm. You probably noticed that he was willing to sell for significantly less than list price back in 2007 when agents were telling the rest of us how prices were rising and Deep Creek real estate was the best investment around. Could he see what the future held?? Certainly makes you wonder.

199 UPPER HIGHLINE Dr: short sale, another former DC Development LLC property gone bad. Same current "owner" as 335 Waterfront Greens and 342 Lakefront Links - Morgantown-based LLC.

342 LAKEFRONT LINKS Dr: short sale. Same current "owner" as 199 Upper Highline and 335 Waterfront Greens - Morgantown-based LLC.

109 NORTHGLADE HILL Dr: short sale, current list price: $329,000, 2007 sold price: $375,000. Current listing agent was buyer and seller's agent in 2007 transaction. One might guess that he's been thrilled by his own return on this investment.

257 MARSH HILL Rd #17: current list price: $299,900, 2004 sold price: $320,000.

60 BRIGHT Psge #60: current list price: $379,000, 2007 sold price: $417,000.

50 FASTING Ct: current list price: $549,900, 2006 sold price: $602,880.

200 KENDALL CAMP Cir: current list price: $599,900, 2008 sold price: $610,900, former DC Development LLC property.

2544 STATE PARK Rd: current list price: $798,000, 2007 sold price: $799,900.

1 LITTLE DIPPER Ln: short sale, land, former DC Development LLC property.

565 GLENDALE Rd #312: short sale.

65 BROBST Rd: short sale.

SOLD

129 WALNUT St: December 16, 2010 sold price: $19,000; foreclosure.

213 11TH St: December 16, 2010 sold price: $150,000, 2006 sold price: $169,000.

1250 PERGIN FARM Rd: December 3, 2010 sold price: $500,000; recent list price: $539,000; 2005 sold price: $570,000. Listed or relisted three times since 2009.

2576 FINGERBOARD Rd: November 24, 2010 sold price: $13,000; foreclosure.

119 7TH St SOUTH: October 14, 2010 sold price: $85,000; foreclosure.

1104 ALEXANDER Ln: September 30, 2010 sold price: $275,000, 2008 sold price: $309,000.

914 STOCKSLAGER Rd: September 24, 2010 sold price: $1,024,500, 2006 sold price: $1,220,000. Listed or relisted four times since 2008.

1692 DEEP CREEK Dr #29: September 1, 2010 sold price: $290,000, 2006 sold price: $295,000 + renovation cost, formerly agent-owned. Owner previously told me that he was confident this property would sell for $380,000+ and indicated that it was a good investment. Delisted July 27, 2010 (952 days after it was originally listed in 2007). Agent-owner sold at a loss relative to 2006 cost basis and ate renovation costs as well.

5 NORTH RIDGE Ct: October 18, 2010 sold price: $370,000; prior list price: $399,000, 2004 sold price: $438,900.

234 BEN DEWITT Rd: November 5, 2010 sold price: $122,000; foreclosure.

93 BRENNEMAN Ln: October 12, 2010 sold price: $550,000; foreclosure, former DC Development LLC property. Price reduced June 15, 2010, July 10, 2010, and again on August 6, 2010. We have followed the history of this property going back several years now to when things were reportedly "well and improving daily" in the Deep Creek real estate market.

3195 TURKEY NECK Rd: December 17, 2010 sold price: $1,175,000; prior list price: $1,199,000, 2005 sold price: $1,200,000.

603 OAK St: August 23, 2010 sold price: $69,000; foreclosure.

2491 SHADY DELL Rd: October 6, 2010 sold price: $24,000; foreclosure.

543 PYSELL CROSSCUT Rd: September 29, 2010 sold price: $142,000; short sale.

254 WINDING TRAIL Ln Unit 7B: August 31, 2010 sold price: $415,000, 2008 sold price: $435,000.

273 CIRCLE FOUR Ln: bank owned, foreclosure. Delisted July 31, 2010, sold September 7, 2010 for $220,000.

734 SOUTH BLAKESLEE Rd: November 10, 2010 sold price: $510,000; prior list price: $569,900; October 2009 list price: $695,000.

13 WINDING Way: July 2010 list price: $249,999, 2004 sold price: $285,000, over 500 days on market. Pending sale as of July 23, 2010. August 23, 2010 sold price: $240,000 or $45,000 less than the 2004 sold price. Listing indicates new deck, so the total loss on this one could be significantly more than $45,000.

12 SKI HARBOR Dr #12: August 6, 2010 sold price: $360,000, 2007 sold price: $400,000.

164 HAZELHURST Rd: July 16, 2010 sold price: $600,000, 2002 sold price: $570,000 (2009 list price: $889,000). After paying transaction costs, 8 years of property taxes, and finally a real estate agent to market the property this former owner sells this exclusive lakefront lot for less than his 2002 cost basis (i.e. negative return on investment since 2002). Nearly a decade after the lot was purchased, no investment gain. Obviously this is only one property, but it certainly stands in stark contrast to all those promises of great investment returns we were hearing just a few years ago.

668 WALNUT Dr: short sale.

632 BROBST Rd: foreclosure.

662 WATERFRONT GREENS: June 25, 2010 sold price: $835,000; 2008 list price: $1,389,000. Formerly agent-owned, previous history profiled here.

1342 STOCKSLAGER Rd: 2010 sold price: $1,150,000, 2007 sold price: $1,525,000.

91 BOULDER RIDGE Dr: foreclosure. Sold at about 85% of 2004 selling price.

44 JRS Dr: $12,390 seller subsidy, 2010 sold price: $413,030, 2005 sold price: $420,000.

1692 DEEP CREEK Dr #3: short sale, 2010 sold price: $309,000, 2005 sold price: $380,000.

768 FISH HATCHERY Rd: foreclosure.

4456 NATIONAL Pike: foreclosure.

1448 PYSELL Rd: short sale.

4488 GORMAN Rd: foreclosure, sold price: $90,000, 2009 list price: $185,000.

219 DINKY TRACK Rd: foreclosure.

IN LIMBO

38 SHINGLE CAMP Ter: short sale, most recent list price: $999,000, 2006 sold price: $1,307,000. Reduced by $300,000 on September 17, 2010. Short sale pending.

2087 STOCKSLAGER Rd: most recent list price: $575,000, original list price: $698,750. Listing says "reduced from $599K to $575K thru 12/31/10. Must close by the end of 2010 for this price," as if the price is mysteriously going to rise if it has not sold by the end of the year. I hope no one falls for this joke. Delisted December 31, 2010.

915 DEEP CREEK Dr: recent list price: $650,000, 2005 sold price: $700,000. Delisted December 28, 2010.

2 STILWATER Dr: seller offering to hold first mortgage, recent list price: $799,000, 2005 sold price: $865,000. Reduced another $25,000 on August 30, 2010 - now $130,000 less than August 2009 list price. Delisted December 13, 2010.

8 PHEASANT RUN Rd: short sale, land. Delisted December 12, 2010.

209 HIDDEN VALLEY Ln: most recent list price: $220,000, original list price: $315,000, 2003 sold price: $195,000. After 1000 days on the market, list price is approaching 2003 sold price. Delisted November 30, 2010.

611 MARSH HILL Rd #1: most recent list price: $1,185,000, 2008 sold price: $1,325,000. Delisted November 30, 2010.

20899 GARRETT Hwy: recent list price: $465,000, 2006 sold price: $475,000, list indicates motivated seller, bring all offers. Price reduced August 21, 2010 moving this listing from the "on the verge" list to the actively distressed list. Delisted November 25, 2010.

188 MEDALLION DRIVE Rd: short sale. Delisted November 24, 2010.

19868 GARRETT Hwy: most recent list price: $598,800, 2002 sold price: $600,000. Recently priced below 2002 sold price. Delisted November 22, 2010.

115 WOODLAND Way: most recent list price: $279,000, 2005 sold price: $295,000. Delisted November 19, 2010.

335 MOUNTAIN VIEW Dr: most recent list price: $588,900, 2006 sold price: $675,000. Delisted November 18, 2010.

584 OLD WILSON: short sale, land. Delisted November 2, 2010.

788 FOXTOWN Rd: recent list price: $297,000, 2005 sold price: $329,900. Delisted October 28, 2010.

209 2ND St: short sale. Price reduced August 10, 2010. Delisted October 5, 2010.

1 MISTY MEADOWS Dr: foreclosure, Waterfront Greens. Price cut August 10, 2010. Price cut again August 30, 2010. Delisted September 26, 2010.

POLAND VISTA NORTH Ln: short sale, Thousand Acres. Delisted September 2, 2010.

3285 SHINGLE CAMP Rd: short sale, May 26 list price: $1,795,000, June 25 list price: $1,399,000, July 1 list price: $999,500. At this rate they'll be giving it away to the Farm Queen at the Garrett County Fair. Recently delisted.

335 WATERFRONT GREENS Dr: short sale, previously pitched by local real estate agent/blogger as property that had rental income (when others apparently did not - wow, can you imagine the distress those owners falling into the don't have rental income category must be in). Same current "owner" as 199 Upper Highline and 342 Lakefront Links - Morgantown-based LLC. Delisted September 10, 2010.

735 BIRCHWOOD Dr: short sale, current list price: $145,000, 2007 sold price: $182,000. Delisted July 20, 2010.

2491 SHADY DELL Rd: foreclosure. Delisted July 15, 2010.

126 HIGH ROCK Ln: short sale, former DC Development LLC property. "SELLER VERY MOTIVATED." Delisted July 7, 2010.

ON THE VERGE

65 POND Ct: Current list price: $139,000, 2008 list price: $179,000. Waterfront Greens. Agent-owned. Just reduced by $40,000 after nearly 800 days on market.

84 POND Ct: Current list price: $139,000, 2008 list price: $179,000. Waterfront Greens. Agent-owned. Just reduced by $40,000 after nearly 800 days on market.

91 KENDALL CAMP Cir Unit 7A: this one makes the list following a recent price reduction, something we have seen plenty of in Kendall Camp.

156 MISTY MEADOWS Dr: current list price: $459,000, 2008 list price: $599,900. This one makes the list due to the recent negative price action in Waterfront Greens. Agent-owned.

79 MARSH HILL Rd #5: current list price: $275,000, 2004 sold price: $249,900. Listed for the third time since 2007. We have previously covered the weakness in the Deep Creek townhouse/condo market.

219 MOUNTAINTOP Rd: current list price: $745,000, May 2009 list price: $949,000. Out-of-state owner is real estate agent. Another former DC Development LLC property.

388 BRANT Rd: current list price: $845,000, 2007 sold price: $840,000, recently reduced $54,000. Already underwater if you include transaction costs.

402 BRANT Rd: current list price: $849,900, 2007 sold price: $840,000. Already underwater if you include transaction costs. Recently delisted.

726 PINE TREE POINT Rd: current list price: $979,500, 2006 sold price: $960,000. Already underwater if you include transaction costs.

1511 MARSH HILL Rd: current list price: $749,000, 2005 sold price: $700,000. April 2010 list price was $835,000.

573 BECKMAN PENINSULA Rd: current list price: $525,000, 2005 sold price: $500,000. Price reduced $100,000 on July 15, 2010.

Many more ..

All of that and just 17 properties sold in May 2010 as Deep Creek inventory continues to build.

Judging by some of these price declines coupled with the level of overhanging inventory, there are many more for sale properties out there with unrealistic list prices which will likely be forced lower before a willing buyer steps forward and a sale is completed; thus, adding to the potential distress. As such, I'll try to update this list weekly. Stay tuned, more to come.

After reviewing the carnage, now review a few statements from local real estate agents over the past few years.

January 21, 2008: "Local developers realize that Deep Creek has always been in high demand and that prices will go back up this summer." Not exactly!

March 10, 2008: "I do not know if we are at the bottom of the real estate market yet, but we are close. Even if home prices continue to decline they will not go low enough to compensate for the increase in interest rates to come." Wrong on two accounts!

March 10, 2008: "Send me a thank you card in 5 years when you use the equity in your vacation home to help send your kids to college!" This one is laughable to the extent that it is stated as only a true used home seller and real estate daytrader/speculator could manage!

April 17, 2008: "Deep Creek Lake Vacation Rentals Still Going Strong." Oblivious.

May 16, 2008: "Why wait?" Because prices will be lower in the future!!

May 19, 2008: "Cyril Moulle-Berteaux of Traxis Partners LP recently reported in a May 2008 issue of the Wall Street Journal that that the real estate market has bottomed out and “The Housing Crisis is Over.”" I guess this one proves that you can find anything you want to find on the internet and that some of it is very wrong!

May 27, 2008: "Vacation Home Market Has It’s Own Set of Rules." “The continued demand by this segment (vacation home buyers) has driven up prices and values in our market even though other areas have seen price declines.” If only every would-be vacation home buyer got $3 million in stock options from Dick's each year.

January 15, 2009: "2008 Deep Creek Lake Area Real Estate Market Statistics." “The Deep Creek Lake area real estate market continued to show steady performance in 2008." Oblivious.

May 1, 2009: "Are We Turning the Corner?" Clearly, the correct answer was No!

September 3, 2009: "How is the Lakefront Real Estate Market at Deep Creek?" "Deep Creek lakefront properties have still continued to hold their value. " "The number of homes sold has decreased this year, but we are holding value. Now I know we are all talking about and hearing about all these price adjustments and decreases. Yes, we are seeing sellers drop prices, BUT, we are holding value. Home owners are not making as much on the re-sale of their property but they still have not dipped below the value they paid originally." Don't worry, prices aren't rising like we said they would, but, we are holding value. I know of quite a few sellers who would vigorously disagree!!

Buyer Beware!!

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

Garrett County Real Estate Sales by Year Since 1999 ..

Source: MAR

The table shows a big move up in the middle of the decade before the recent plunge leaving 2009 total sales dollar volume below the level of 2001, thus making Deep Creek real estate an ill-liquid asset to some and an ill-liquid liability to others. In a few weeks, data for the first half of 2010 will be available, but through May it seems 2010 isn't much different from 2009--or from 2001 in terms of total transaction dollars.

When time permits, I'll put together a similar table to show growth of short sales and foreclosures as total dollar volume of sales declined. Then we can track these distressed sales as a fraction of the total market and objectively determine if market conditions are improving or deteriorating. Stay tuned.

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

Distressed Properties List Updated (July 2, 2010) ..

Follow this link to read more about the growing number of Deep Creek distressed properties.

It sure seems like that post-holiday sale I spoke of in 2008 has arrived. Meanwhile, I fear what might have become of the poster who was so eager to follow the advice of local real estate agents who were suggesting that it was a good/great time to buy back in 2008.

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

More Deep Creek Short Sales ..

I guess those luxury foreclosures I've been reading about in the Washington Post and on CNBC have spread to Deep Creek Lake as well (as expected). Click here for more details on 199 UPPER HIGHLINE Dr. This property has been more or less listed for sale for three years now and is yet another DC Development LLC property gone bad.

And two more in Waterfront Greens at Deep Creek Lake (another area with a checkered sales history that I've previously blogged about) at 335 WATERFRONT GREENS Dr and 342 LAKEFRONT LINKS Dr. Apparently, all that supposed rental income wasn't enough to keep the current owners afloat, so potential buyers dodged a bullet by not falling for the "analysis" of a real estate agent on this one.

Another still two more on Shingle Camp at 3285 SHINGLE CAMP Rd and 38 SHINGLE CAMP Ter. I guess "few and far between" was in the context of the massive Deep Creek inventory, not the modest number of monthly sales.

At this point, I really have to question whether the author of the real estate blog which has made claims about the market being well and improving daily (in 2008) and recently stating that distressed sales are few and far between is being forthright in his disclosure. If you are in the market you should be asking these questions as well! Buyer beware!

Don't forget to check back to Dan's Deep Creek Blog for your future updates on Deep Creek real estate.

Distressed sales few and far between?

We report, you decide. According to Redfin, there were 28 sales in the 21541 zip code over the past six months. Five of those sales are listed in the table below showing the recent transaction date and price and the previous transaction date and price. Shown here are nearly 20 percent of all the sales in the 21541 zip code during the past 6 months and represented are 1 large mid-six-figure loss, 1 short sale, 1 foreclosure, 1 big seller subsidy, and 1 agent owned property. So you be the judge, are distressed sales as few and far between as some would suggest?



And clearly real estate prices and values haven't stopped rising either, or have they? Or maybe they've finally conceded on that front, as recently as early 2009 values were still rising according to some. Again, you be the judge. Post any and all comments.

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Mike Kennedy of Railey Realty reports that about 1 in every 804 properties in Garrett County has received a foreclosure notice since August 2008 ..

for comparison here are foreclosure rates for all 50 states in January 2009. Ranking the states by foreclosure rate you see the usual suspects - Nevada, Florida, California, Arizona. Zooming in on a more local level, anecdotal evidence generally shows that foreclosures are more of an urban/suburban problem so it makes sense that North Dakota, South Dakota, Montana, West Virginia, Nebraska and Vermont have the lowest state-wide foreclosure rates nationwide. These states are demographically very similar to Garrett County but have lower foreclosure rates than Garrett County so I'm not sure if Mike is just trying to make Garrett County look good in comparison to Detroit and Las Vegas or if he is trying to give an impression that there are very few distressed sellers in the Deep Creek market.

My regular readers know for a fact that his own firm has handled a number of short sales over the past six months. Maybe he could shed some more light and tell us what percentage of the sales processed by their brokerage are distressed sales (short sales, owner losing money on their investment, more than 10% below original list price, etc.) instead of dismissing their existence. Afterall, not all distressed sellers end up in foreclosure.

MAR reported that 319 property transactions occured in Garrett County in 2008 and all you need to do is search "short sale" on this blog to see that at least several percent points of that number are distressed sellers in the Deep Creek market. It's his job to make you think things are "well and improving daily" though so don't mistake a sales pitch for real analysis.

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Deep Creek short sale property sells for nearly 15% below list price ..

see for yourself right here. One less property for sale in the bloated local inventory which stood at 708 properties as of the end of November.

I've profiled this property in a previous Deek Creek market update posting and suggested that potential buyers who were genuinely looking to purchase a property at Deep Creek Lake at a bargain price take a serious look at these properties being listed by distressed sellers. In this case it looks like those sellers could have been you and me, the US taxpayers, since IndyMac originally issued this bad loan and was later taken over by the FDIC.

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Another Garrett County/Deep Creek Lake short sale contributing to the pain being felt on Wall Street and Main Street ..

Since the sale price listed here is well below the $400,000 loan amount from May 2007 we can assume that M&T Bank (or whoever they sold the mortgage to) took a significant loss on the sale of this property. The really sad thing is that sales like this one are robbing banks and financial institutions of the necessary capital they need to make loans for hard-working folks and small businesses who are responsible enough to repay any loans they might receive. Maybe in the new bailout bill Congress can ask the CEO of the company who approved this loan in the first place, the real estate agent who made a large commission from this sale and the previous homeowners who basically got a gift from the bank to contribute a portion of those proceeds towards the roughly $1trillion that might be necessary to fix this mess. That sure makes a lot more sense to me.

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Puzzling ..

Two weeks ago this Deep Creek Lake access property was listed as a short sale just like this new construction Deep Creek vacation home, today it's not. Which is it? Are they hiding something or is it really no longer a short sale? Based on previous experience, who really knows.

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So if a bank based in California fails it has nothing to do with Garrett County and Deep Creek Lake right?

Not exactly.

Of course the bank in California I'm referring to is IndyMac which failed because they took excessive risks and made a lot of bad loans to people who could never afford to pay them back. Eventually their capital structure had been degraded to the point that they could not even return money to depositors and as you probably know had to be taken over by the FDIC. So how on earth does any of this relate to little old Garrett County? Simple, this Deep Creek vacation house as one example was funded by IndyMac and based on the fact that it is now listed as a short sale the out-of-town borrowers are in trouble and cannot keep up with their payments. Therefore, a small piece of the cash flow IndyMac was counting on to maintain its solvency as a legitimate bank wasn't coming in each month. Add up enough of those and you have the recipe for a bank failure or many of them even. So just because people tell you that the national housing bubble bursting and banks based in California failing has nothing to do with Deep Creek Lake and Garrett County doesn't necessarily mean it is true.

And now that the FDIC is basically running IndyMac guess who is taking the loss on this Deep Creek vacation home? IndyMac? Nope. The speculators in Pittsburgh? Nope. You and me, the taxpayers? Yep, that's right! And just this week the Wall Street Journal reported that the FDIC may have to borrow even more money from the Treasury to cover their own cash flow problems. Better open up your wallet and get ready to folk over more cash to bail out all these bad investments!

And that's on top of all the money we are all paying to subsidize another Deep Creek real estate blogger's new lakefront home through one of those "tax avoidance schemes" you hear about. More on that in a couple days.

Don't forget to check back to Dan's Deep Creek Blog for future updates.