By: Mike Kennedy July 15th, 2008 Category: Interest Rates and Loans, Obtaining a Mortgage

There certainly has been a lot of bad news recently about the current state of the mortgage industry in the United States…but for those buyers out there looking to purchase real estate or a home for sale at Deep Creek Lake the big question becomes- “How are all these current problems in the mortgage industry going to affect me?”

Recently, we had the pleasure of Jerry Merrick, a local Vice President of Mortgage Lending at BB&T Bank, speak at one of our sale meetings. He provided us with an excellent update on the current state of the mortgage industry and what second home buyers can expect to deal with when obtaining a mortgage loan. Most of the changes in the mortgage industry are being made in the non-conforming “Jumbo Loan” segment -loans over $417,000. Coincidently, very few changes have been made in the conforming loan segment - loans less than $417,000. Below is a quick summary of these changes;

Stricter Underwriting

For those looking to borrow more than $417,000 banks are returning to more traditional underwriting standards. This means that borrowers will have to document and prove all stated income and be subject to asset verification. Gone are the days that you could simply write down on your loan application how much money you make and the bank would take your word for it.

Larger Down Payments

You’ll probably now be required to put down approximately 20-25% on the purchase of a second home. Loans that only required 5% or 10% down are a thing of the past.

Two Appraisals

Some banks are now requiring two appraisals on loans for vacation homes priced over $1,000,000.

Points

Those with credit scores less than 700 may now have to have to pay ½ point. Maintaining a higher credit score will be very important in the future.

Unfortunately, those looking to borrow money for the purchase of a vacation home here at Deep Creek will no doubt have to jump thru more hoops - and even though delinquency rates are extremely low in Garrett County and Deep Creek Lake due to the affluent nature of this real estate market - it is important to keep things in perspective - the good news is that banks are still lending money and very much want to continue doing so - and interest rates from a historical perspective are still low - rates in the mid to low 6% range are still the lowest they have been in the last 25 years- with the exception of 2003.

Is now a good time to lock in a rate? Only you, the borrower, can make that decision. If you think that rates may go up with more continued bad news in the mortgage industry then now may be the time to lock in…….if you think that rates may go down as loan delinquencies stabilize then you should probably wait and see what happens. No matter what you decide, these stricter lending guidelines and much needed changes in the mortgage industry should have an overall positive effect on the real estate market here at Deep Creek Lake and throughout the rest of the country.

By: Mike Kennedy July 8th, 2008 Category: Deep Creek Lake Market Update, Wisp Real Estate

At the mid-point of 2008, once again the Deep Creek Lake Maryland real estate market is sending out mixed signals. However, the message is mostly the same - the number of sales continues to trend downward but the average sold price continues to climb. 

Residential Market Segment

Thru the first 6 months of 2008, 72 residential properties sold in the Deep Creek Lake area - this includes lakefront, lake access, lake view, and lake area residential houses and town homes/condos sold. These figures also include residential real estate at Wisp Ski Resort. This compares to 103 residential sales that occurred thru the first 6 months of 2007 - which is a decline of 31 properties sold.

On the bright side, the average sold price thru the first 6 months of 2008 for these 72 residential properties was $616,428 - this compares to an average sold price of $540,390 in 2007 at this point. On a wider level, Garrett County is one of only 3 counties in the entire state of Maryland where residential real estate values went up thus far in 2008. Other counties in the state are experiencing both decreases in the number of sales and prices upwards of 25-40%.

Lakefront Homes Still Going Strong

Clearly, the driver of the Deep Creek Lake market is once again the lakefront home segment. This segment clearly continues to outperform our other market segments. The values of many lakefront homes continue climb - albeit at a much more normalized rate than what we experienced earlier this decade. Even during what most consider a soft real estate market, the lakefront homes with good settings and quality features can still command a premium price. Interestingly enough, from a historical perspective the lakefront segment has always performed well. Many old time real estate professionals from the area will tell you that the lakefront homes have always held their value or even went up during other tough national economic times experienced in past - such as those in the 1970s and 1980s.

Lots and Land

The most disappointing segment of our current market continues to be the lot/land market. Only 33 lots in the Deep Creek Lake area have sold thru the first 6 months of 2008. This compares to 53 lots sold thru the first 6 months of 2007 - a decrease of 20 lots sold. The average sold price of a lake area lot is $191,226 thus far in 2008, which compares to $238,577 at this point in 2007. This is primarily due to an incredibly high inventory of lots for sale and decreased demand for these types of properties.

Impact on Buyers

If you are a potential buyer - now may be a good time to explore purchasing opportunities in this current market. With less buyers and demand in the overall market, your chances of obtaining more favorable terms (i.e. price) are greater than in the recent past. Plus the cost of borrowing money is still relatively low by historical standards. There are some pretty good “buys” out their right now.

Impact on Sellers

If you are a seller in this current market it all depends on your situation - if you are trying to sell a good, quality lakefront home with a good setting you’ll probably end up getting your offering price - assuming it’s priced correctly. If your setting or house is marginal you may need to further examine your current pricing strategy - or put some resources into boosting the “curb appeal” of your house. If you are trying to sell a lot - it will be tough for sure unless it’s priced at a very attractive level. It all depends though - we just sold a very unique lakefront building lot on Stockslager Road for $1,200,000. There are real estate buyers out their right now and they are willing to pay for quality- however most are now waiting to purchase until they find that exact house or lot they have been seeking out.

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By: Mike Kennedy July 3rd, 2008 Category: Deep Creek Lake, News

DNR Deep Creek Lake Manager Carolyn Mathews reports that their internal review of a number of regulation changes that effect how and where PWCs may be kept at dock permit sites on the lake has been delayed by about a month. The review was scheduled to be sent to Annapolis for review in July, but that time frame has been extended to August. Those that own real estate or houses at Deep Creek Lake will have an opportunity to review the proposal once it is made available for public comment.

 Ms. Mathews did say that the goal is to change the regulations to prohibit the storage of PWCs on the buffer strip and to instead allow a limited number to be moored at docks, in addition to any other permitted powerboats. Commercial sites will not receive any additional PWC mooring rights over what they are already permitted.

 The effect on property owners could be positive or negative depending on the number of PWCs they have traditionally stored on shore at their permit site. On the positive side, from what we have heard, the proposal is to possibly allow each Type A dock permit holder the right to be able to moor two PWCs at their dock. However, on the negative side it is very much unclear what will happen to those property owners who do not have a private dock and currently have 1 boat slip in a common dock. Many lake access property owners in the various subdivisions around the lake keep their power boat moored in the 1 slip they are allocated in their common dock - and then keep their PWC stored on the shoreline. DNR also intends to phase out the previously permitted PWC stands that some property owners use.

 Also, on The Deep Creek Blog, Becky Sciullo writes that DNR has stepped up their patrols on Deep Creek Lake and intends to keep doing so all summer long to crack down on dangerous boating activities.

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By: Mike Kennedy June 28th, 2008 Category: Deep Creek Lake Real Estate

The dramatic growth in real estate values and assessments in Garrett County Maryland over the past ten years, particularly the Deep Creek Lake area, has reaped huge economic benefits for local citizens and county government.

Real property in Maryland is subject to tax with the rates and assessments varying widely between jurisdictions. As most property owners know, the amount of property tax that you eventually pay is based on two criteria, the assessment (determined by the state and presumably based on a property’s value) and the rate of tax (two rates - set by the local jurisdiction and the state legislature). The state regularly reassesses property values on a three-year cycle. Tax rates can change yearly.

In Garrett County, the Board of County Commissioners sets the county real property tax rate. For FY 2009 (starting July 1), it will remain at $1.00 per $100 of assessed value. The county estimates that more than 65% of its anticipated local revenue, or almost $39 million, will come from real estate related taxes during this coming fiscal year. Real estate related taxes also include local transfer and recordation taxes. The state’s property tax rate is much smaller and remains unchanged at $.112 per $100 of assessed value.                                          

Compared to two fiscal years ago, county revenue has increased by more than $8.5 million, mostly due to the increase in property related taxes. The next highest source of county revenue is income taxes, which represents only about a third of the revenue obtained from real estate. Property related taxes drive the county budget and the services it provides.

In FY07, real estate related taxes represented about 58% of the county’s revenue sources. A decade or so ago, the percentage was within the 50% range. This increase over time demonstrates the strong value of the assessable property base on the local level and the county’s increasing reliance on it to fund the county budget. 

How does Garrett County compare to the rest of the state? In FY 2008, sixteen counties (including Baltimore City) had lower real property tax rates, with Garrett ranking 7^th  in the state.  Its recordation tax rate during the same period ($3.50 per $1000) was about in the middle of the range of counties, tied with Wicomico County on the Eastern Shore.

Over the next two years, the MD Department of Assessment and Taxation estimates that the assessable real property tax base in Garrett County will increase by more than $245 million. Since FY 2001, the assessable base has increased by more than $2.3 billion to a level over three-times that of the late 1990s. This rate of increase has allowed property tax revenues to surpass all other forms of county revenue.

By: Mike Kennedy June 13th, 2008 Category: Heritage

The Deep Creek Lake experience is an opportunity to slow down and enjoy a more relaxing pace. This slower way of enjoying life is part of the attraction and charm of our mountain resort. Those new to the lake area may not know it, but at one time both locals and visitors alike were actually required to slow down. It all depended on the route you chose to drive from one end of the lake to the other.

When the lake was constructed in the 1920s, travel by car was a luxury that not everyone had the opportunity to enjoy. To get to this area, most visitors arrived by steam train at the B&O station in Oakland and utilized local transportation along the winding gravel “State Road” (Route 219) north. The damming of Deep Creek in the 1920s blocked some local roads and new bridges were required to keep some of them open. Several long steel arch truss bridges were needed to span the lake. Construction on these new bridges was completed before the lake was flooded.  Three steel structures were eventually built - along the State Road crossing the center of the lake, the Glendale (Road) Bridge at “Cat Rocks”, and finally a much later and smaller bridge over Meadow Mountain Run near the state park.

Back then, the typical Ford or Chevrolet required less roadway than today’s cars. The new bridges incorporated lightweight see-through steel grid bridge decking and lanes that were, at the time, thought to be wide enough. The design allowed motorists to pass each other freely across the bridges as they drove through and around the lake.

The old State Road bridge had wider lanes then did the Glendale Bridge and, except for the occasional big load, traffic usually flowed relatively freely north and south. However, the Glendale Road bridge was designed with a much narrower deck and it often had short backups during the summer months. As cars became bigger and faster, courtesy and patience was required after motorists learned that the Glendale Bridge could now only accommodate one-way traffic. New rules of the road developed, i.e. whoever dared to start across the bridge first ruled the road. Being courteous and waiting did have its benefits, mostly being the chance to enjoy the sweeping views across the lake south to Turkey Neck or north to Marsh Mountain.

It was customary to wave at or politely greet the waiting car as you passed them at the other end and they then took their turn to cross the bridge. Still, confrontations occasionally occurred when drivers did not know or understand the rule. Many a visitor’s boat or camping trailer needed to be backed rom the Glendale Bridge after having started partway across.

As the Glendale Bridge aged, it developed its infamous but endearing “kablam, rumble, rumble, rumble” sound effect as cars moved across it, a sound that could be heard fairly far away late at night. Especially if one was camping at the state park.

Both bridges grew old gracefully and were eventually replaced with today’s structures. The State Highway Administration replaced the State Road/Route 219 bridge in 1986. The site of its southern abutment can still be seen at the DNR fishing area adjacent to the new bridge. The Glendale Bridge stubbornly held on for another 11 years, eventually succumbing to deterioration and neglect in 1997.

As a fond and fitting farewell to the slower life, a handful of locals held an impromptu celebration and dance on the old Glendale Bridge just before its demolition. A final memorial to times gone by and to the many memories made waiting for others to cross.

By: Mike Kennedy June 6th, 2008 Category: Deep Creek Lake Real Estate, Fractional Ownership

If you are thinking about purchasing a vacation home at Deep Creek Lake, you may first want to learn more about the hottest trend in real estate and second home ownership. The very wealthy have been doing fractional ownership for years and while it’s a newer trend at Deep Creek Lake, owners in places like Aspen, Colorado and Jackson Hole, Wyoming have been enjoying the benefits of fractional second homes since the mid 1990’s.

What is Fractional Ownership?

It’s a vacation ownership option that allows deeded ownership in a luxury vacation property with the costs shared among owners, and a defined number of weeks for use spread throughout the year. In our market, the most common ownership percentage is 1/6, allowing 8 weeks of use per year, but 1/5 is also available with 10 weeks use per year.

Benefits

Who would benefit from the fractional ownership experience? Our owners tell us they were drawn to fractional ownership for the following reasons:

• They spend they spend their vacation time with family friends - they don’t spend any time doing maintenance on their second home.
• They’re busy people and want the ability to enjoy a luxury vacation home and own what they have the ability to use.
• It’s the perfect getaway for those special family occasions. A place they can return to year-after-year and leave as a legacy for children and grandchildren.

If you want to learn more about this innovative ownership model, please join Railey Realty and Second Homes at Deep Creek Lake for a brief presentation on fractional home ownership and property tours every Wednesday at 9:30 a.m. from June 25th thru August 20, 2008. Seating is limited, so please make advance reservations at www.dclseminar.com or contact Terry Boggs at (800) 544-2425 ext. 3021.

By: Mike Kennedy June 4th, 2008 Category: Deep Creek Lake Activities, Deep Creek Lake Area Things To Do

There is no doubt many people buy real estate here at Deep Creek Lake and in Garrett County, Maryland for the activities and lifestyle this four season resort area offers. Recently, Becky Sciullo, who is the author of The Deep Creek Lake Blog, wrote a great post a few weeks ago that compiled a “Deep Creek Lake Bucket List” after soliciting ideas from readers and from her own experiences. For those of you that don’t know - the movie titled “The Bucket List” was about two terminally ill men who leave their hospital and head off to do a list of activities they’ve always wanted to do before they die.

After discussing her post with some other real estate agents and realtors in our office we came up with a few other activities and things to add to this list. 

• Mountain biking the Margroff Plantation near Accident, Maryland. Mostly single-track trails. It’s not too hard - but not too easy either. Margroff Plantation is part of the Savage River State Forest.
• Riding ATV’s and four wheeling in Yough Mountain Resort. Of course you must do so with an owner in this neighborhood.
• Snowmobiling between the Oakland County Club and either Pawn Run Saloon for a Friday night steak or JG’s Pub for some really good bar food.
• Wake surfing on Deep Creek Lake. The newest water-sport fad. You gotta have a big boat with a big wake to do this activity - but wake surfing isn’t that strenuous on the body, is a lot of fun, and can be done on the most busiest of weekends - unlike waterskiing or wakeboarding where flat water is usually required. ** Please note you must use a straight Inboard boat to do this activity. The propellor on an Inboard boat is beneath the boat and not sticking out the back like an I/O or Outboard drive boat. Also, be aware that their is a slight carbon monoxide danger as well - as you are sometimes surfing the boat’s wake right behind where the exhaust of the boat is coming out.
• Attending the Fireman’s Parade and Oktoberfest celebration in downtown Oakland, Maryland the Thursday of Autumn Glory Weekend. Great food, an Oompah Band, and great party.
• Going to the Little Yough Music Festival, also in Oakland, which is held every Friday night in the summer. They have really good bands and it’s free admission.
• Drinking a specialty coffee and eating lunch on the deck at Canoe on The Run in the summer.
• Shopping the Labor Day Weekend ski specials at Rudy’s at Wisp and High Mountain Sports.

While we are not suggesting you have to be terminally ill to do these activities - above are just a few more things and activities that make this area such a great place to buy a vacation home.

By: Mike Kennedy May 29th, 2008 Category: Garrett County News

After nearly 3 years of being under contract, the real estate developer who builds most of the Lowe’s Home Improvement Centers has finally closed on 23 acres of real estate just north of Oakland, Maryland on Route 219. Building crews have already started preparing the site for excavation and completion of the Lowe’s store is expected by Thanksgiving 2008. The 23 acres will also include 6 out parcels in front of the store along Rt. 219 whose use and occupants have yet to be determined.

It will be interesting to see what the eventual impact Lowe’s will have on Garrett County, Maryland as a whole and other related industries in this county such as real estate. With more competition  - will the cost to build a new home in Garrett County or at Deep Creek Lake go down any? Lowe’s will almost certainly put price pressure on the other suppliers of building materials in the area.

Will Lowe’s cause any existing businesses to eventually shut down? Maybe - but probably not. When Walmart moved to Garrett County earlier this decade the only big name company to go out of business was the local Food Lion grocery store. However, like Wal-mart - Lowe’s will probably cause sales to slow down or even decrease at some local businesses who sell the same products.

Many had predicted that Lowe’s would eventually land here in Garrett County as they tend to follow Wal-mart. Many citizens of the county were concerned before Wal-mart moved here and rightly so - this area had never experienced life with a big box retailer. The Wal-mart effect on Garrett County has been both good and bad - but mostly good. Bad in a way that it has certainly hurt some local family owned businesses - but good in a way that Wal-mart is now one of the area’s largest employers providing steady jobs with benefits to an area that certainly needs it - and also providing lower prices to local citizens. Overall most would say Wal-mart has had a positive impact - hopefully in the long run Lowe’s will be another asset to the county.

By: Mike Kennedy May 27th, 2008 Category: Deep Creek Lake Market Update, Deep Creek Lake Real Estate

A few weeks ago I was interviewed by a writer at the Washington Times for an article she was researching about vacation homes markets and my take about what is currently happening in the Deep Creek Lake real estate market. Last Friday, that article appeared on the Washington Times website - you can read the article by clicking here.

Other Resort Markets

After reading the article it’s interesting to note what a few real estate professionals are saying about other resort markets. A realtor who in works in the Rehoboth and Dewey Beach Delaware market stated the psychology of that market has changed slightly - but that long term prices should continue to rise. And a National Association of Realtors (NAR) spokesperson stated that their research has indicated that speculative buying behavior in resort markets have dropped back down to more historical norms.

Deep Creek Lake Real Estate Market

The current state of the Deep Creek Lake Maryland market is somewhat similar to what is going on in other vacation homes markets - which is that speculative buyers have seemed to decline but prices have continued to rise. Don’t get me wrong, there are still speculative buyers in our market right now - but the number of buyers looking to make a quick profit or flip a piece of property have steadily decreased over the past year or so. We have also seen a decrease in the number of buyers who were stretching themselves financially or had to rent heavily to buy in our market as well. Losing those two types of buyers has certainly contributed to the decease in the total amount of sales at Deep Creek Lake.

But We Still Have Plenty of Buyers…

What the Deep Creek Lake market didn’t lose coming off of our boom years were those buyers looking to buy a vacation home for their family and who also have the financial means to make such a purchase. That segment of buyers, which has traditionally made up a majority of our market, are still very much around and are still very much buying second homes at Deep Creek Lake and the Wisp Ski Resort. The continued demand by this segment has driven up prices and values in our market even though other areas have seen price declines.

Strong Fundamentals

While we’ll probably not see the high appreciation rates witnessed during our boom years just a few short years ago when speculators and flippers were everywhere - the good news is that the fundamentals are solid for future appreciation in this market. Demographic models show that the number of vacation homes purchased in the near future is expected to increase - this coupled with a low inventory of quality lakefront, lake access, and lake area homes should result in steady price appreciation at Deep Creek Lake. The entire shoreline around Deep Creek Lake is almost fully developed now - it will be almost impossible to ever have a large inventory of lakefront or lake access homes in this market in the future. If you plan on buying real estate at Deep Creek Lake in the next year or two it may be a great benefit to buy now - while prices aren’t rising quite as dramatically and while the speculators and flippers are still sitting on the sidelines - in the long run you’ll probably come out way far ahead.

By: Mike Kennedy May 16th, 2008 Category: Deep Creek Lake Real Estate

In the midst of up and down real estate news, Deep Creek Lake stands out as a spot of sunshine in a rainy spring. 

Yes, the number of properties sold in Garrett County, Western Maryland is down from 2007 - but not like other markets who are reporting sales down by as much as half, a third, or even 20%!  And remarkably, our prices are stable and even up.  Closing average prices over the last 4 months have been up by as much as 10%!  (Statistics based on Residential Sales closing prices as determined by MRIS-regional multiple listing service). 

Choices abound in this market-lakefront, lake access, lake view or secluded, wooded properties.  Sellers are more flexible.  Serious sellers are studying the market and pricing their properties sensibly after consulting with their Realtor®.  Many incentives make the homes even more attractive.  Something else to consider:  If you have fallen in love with a property that “needs some work”, licensed contractors are more readily available, too.  With less new construction, crews are not working multiple sites, and can devote more time and attention to your project.

Interest rates are still low-below 6% in many cases.

If you are looking at a second home as an investment-if you plan to rent it out to vacationers for the present, rentals are up in Deep Creek lake area.  Local rental offices are looking for additional properties to add to their rolls.   And if this will be simply your lake home, many homes are sold fully furnished-even in new construction.  So you can have immediate use of your new home.

This current market provides the best opportunity to find the exact home you have been looking for.  And Deep Creek Lake has so many of the details that you have been looking for.  And the activities are increasing each season. 

Why wait? Call or e-mail us today!?