By: Mike Kennedy mkennedy@railey.com 301-616-6106 July 30th, 2008 Category: Deep Creek Lake, Deep Creek Lake Real Estate, News

Deep Creek Lake Manager Carolyn Mathews recently announced the DNR’s intention to address a number of easement violations through court action. Most cases involve alleged illegal dumping or fill on the buydown parcel. The cases are a civil matter and action will be through circuit court.

Ms. Mathews reported that they are experiencing an increasing number of cases involving improper construction of drains, pipes and improvements that are prohibited by the DNR’s easement. The Office of the Attorney General will represent the DNR in court.

If you own lakefront real estate at Deep Creek Lake please note this may affect you. DNR does go around and makes period checks of the buffer strip and buydown parcel in between your house and the water. Any improvements or cutting on the buffer strip or buydown parcel need to be approved first by DNR. The conservation easement placed on the buydown parcel is very prohibitive and all DNR guidelines should be followed.

By: Mike Kennedy mkennedy@railey.com 301-616-6106 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 mkennedy@railey.com 301-616-6106 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 mkennedy@railey.com 301-616-6106 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.