By: Mike Kennedy March 6th, 2008 Category: Deep Creek Lake Real Estate

Attention all you investor type buyers. This real estate listing just went back on the market  - it’s located at 79 Cedar Shores and is being offered for $1,345,000. It’s a vacation rental home and is professionally managed by Railey Mountain Lake Vacations. The rental name is Cedar Chateau.

It has 8 bedrooms (6 of them being Master Suites), a 27 foot indoor pool, 10 flat screen TV’s, and is fully furnished. The property does have access to Deep Creek Lake but does not come with a deeded boat slip. You have views of the lake and Wisp Ski Resort and the house is complimented with interior finished hardwoods, cathedral ceilings, and 2 native stone fireplaces.

For all you investor types out there - this house generated a little over $107,000 in gross rents for all of 2007. The main reason it did such high rents is (1) because it has an indoor pool and (2) the newer construction/quality of the home’s interior. A good rental house does not have to directly located on Deep Creek Lake. The rental houses with indoor pools can command premium rents and renters will pay extra to have nicer amenities. We Realtors like to refer to these types of houses as the “Pool Houses” - and since their are only a handful in our entire market they usually attract a great deal of attention from our investor type buyers.

Give us a call or shoot us an e-mail - any of our sales agents would be more than happy to explain how the vacation rental program works and the associated costs and expenses of owning a investment property like this.

By: Mike Kennedy March 1st, 2008 Category: Deep Creek Lake Real Estate, Wisp Ski Resort

Some more quality exposure for Deep Creek Lake and Wisp Ski Resort. It’s nice to see the area getting the attention of a national publication and a Baltimore television station as of late. Here is a link to an article about the area that appeared in the Spring 2008 issue of Luxury Living Magazine.

It is interesting to note that the author of the article lives in Park City, Utah - which is another resort area with a much larger ski area than the Wisp. The author really has nothing but good things to say about the area and favorably compares the lifestyle and activities offered at Deep Creek Lake to those found at the larger western resorts. 

The author does touch on a few real estate items in the article. She notes that a brand new home at Deep Creek Lake that costs $1.3 million would be considered a “steal” in Park City - where $1.3 million would only you buy a 2 bedroom fixer upper. Sure Park City and some of the other bigger resorts are larger than the Wisp - but Deep Creek Lake is much more accessible and easy to get to for someone from Baltimore, Washington D.C., or Pittsburgh.

We have many clients who own vacation homes here and in other resort areas - and speaking with them they always tell us they spend more time here at their Deep Creek Lake house than at their other vacation homes in other resort areas. When you factor in ease of accessibility, the lifestyle offered, and what you can get for the money - there is no doubt buying a second home at Deep Creek Lake is a great value compared to other resort areas.

By: Mike Kennedy February 28th, 2008 Category: Deep Creek Lake Activities, Deep Creek Lake Area Things To Do, Wisp Ski Resort

Deep Creek Lake and Wisp Ski Resort were featured this morning in this short video segment that aired on WBAL Channel 11’s newscast. WBAL is Baltimore’s NBC affiliate.

By: Mike Kennedy February 27th, 2008 Category: Deep Creek Lake Buyer Info, Deep Creek Lake Real Estate

If you are thinking about purchasing a lakefront home for sale or real estate at Deep Creek Lake there are some very important things to pay attention to during the buying process.

The Setting and Lake Frontage

First and foremost, it’s important to understand that not all lakefront lots and parcels at Deep Creek Lake were created equally - some are level, some are flat - some have lots of trees that block the view from the house, some have wide open expansive views of the lake - some are very private, some the neighbor’s house is very close - some have good water depth most of the year, some are tucked back at the end of cove and have no water depth after Labor Day each year - some have 100 feet of frontage which is the norm, some have between 50 and 100 feet of frontage, and some have 200 feet or more of frontage.

Obviously the homes and lots that are mostly flat, have wide open lake views, have more than 100 feet of frontage, and are private will cost you more. But the good news is that the ones with the premium settings have shown a tendency in the past to appreciate better in the long run. 

Everyone’s preference to setting is different -and there will probably be trade-offs that you need to be make along the way - but when you are looking at a lakefront house just keep one little thought in the back of your mind - you can always change the house but you can’t change the setting.

Boat Dock Type

Most lakefront home and properties around Deep Creek Lake have a Type A Dock. What in the heck is a Type A dock you ask? Well, it’s simply the designation placed on the dock structure and permit provided by the Maryland DNR. A Type A dock is allowed to have 2 power boats and 1 non-power boat moored at it.

The lakefront homes and lots that don’t qualify for Type A docks will usually have access to a deeded boat slip in a Common Boat Dock somewhere in the neighborhood. You will usually see these advertised as having a Single Slip. These common docks are not private though - meaning you are usually sharing it with a few neighbors and the prices for these types of properties are usually a little less overall than those with a private dock.

Believe it or not there are actually a few lakefront homes and lots around the lake that don’t qualify for either a Type A dock or have a deeded boat slip - but these are few and far between.

Buy-Down Parcel

Take note of whether the property you are looking at has acquired the Buy-Down parcel from the state of Maryland or not. We covered some of the basics of the Buy Down in this post. You can’t do much with the Buy-Down other than say you own a little more property - but there a few benefits to owning it - 1. You can get what they call “relaxed” standards if applying for a zoning variance and 2. if you are on a septic field and it fails, you can apply to the state to get permission to extend your drain field in to this parcel. So overall there is some benefit and value to owning the Buy Down parcel.

By: Mike Kennedy February 25th, 2008 Category: Deep Creek Lake Activities, Wisp Ski Resort

In what was probably the narrowest margin of victory in the history of this race, Eric Recker, a local real estate agent here in our office at Railey Realty, won the 2008 Maryland Men’s Governors Cup Ski Race held this past weekend at held at the Wisp Ski Resort. Eric, who has won the past two Governor Cup races as well, edged out runner-up Derick Berger by just .03 seconds overall in this years race. The Deep Creek Lake Winter Sports Team coordinates and runs this annual race which consists of two timed Slalom runs on Saturday on the Wisp’s Squirrel Cage slope and then two timed Giant Slalom runs the following day on the Main Street slope. All four timed runs are then added up and the lowest total time determines who wins the Governors Cup.

In the women’s division, Danielle White (pictured above with Eric Recker), a local skier won the Women’s Governors Cup. In the Junior Divisions (racers under 15 years old), local skiers Jake Vernon won the Junior Boy’s Governors Cup and Kara Stough won the Junior Girl’s Governors Cup.

Another Railey Realty agent, Kellyann Green finished in first place in both the Women’s (over 20 years old) Slalom and Giant Slalom Events.

By: Mike Kennedy February 22nd, 2008 Category: Deep Creek Lake Real Estate

It’s no secret that many vacation and second home owners here at Deep Creek Lake greatly enjoy the peace and relaxation that comes along with owning real estate in Garrett County - but there are other benefits to owning a second home that sometimes go unnoticed - most notably the various tax breaks allowed by the IRS.

The Rules 

In simplistic terms, the IRS allows most second homes to be treated in one of the  following three ways - depending mostly on how much you use or plan on using the property;

1. for personal use
2. as a rental property
3. or a combination of the two

Personal Use

If you truly use your Deep Creek Lake property as a vacation home for personal use as defined by the IRS there are a couple of tax breaks you may be able to receive. The IRS stipulates that a property is considered one for personal use if during the tax year the owners occupied it more than the greater of 14 days or 10% of the total days it was rented to others at a fair rental price.

• If your vacation home is classified by the IRS as one that is used for personal use - you can actually rent it out for 14 days or less each tax year and NOT have to report any rental income  - this is essentially tax free income - but conversely in this scenario you wouldn’t be able to deduct any rental expenses incurred during the days rented either.
• Also, if you fall into this personal use category, all property taxes and mortgage interest on your second home can be deducted if the total amount of mortgages against your primary residence and second home is $1 million or less.

Renting Your Property Out

Their are certain tax breaks as well for those owners who decide to rent out their vacation homes and personally use it less than 10% of the rental each year. If you fall into this rental classification by the IRS you must report all rental income - however, the good news is that the IRS allows you to deduct all legitimate property expenses associated with owning the home - like taxes, utilities, homeowners insurance, HOA dues, maintenance, and depreciation. Some vacation home owners can legally show a deductible tax loss which could ultimately reduce the total amount of taxes owed to the IRS.

Combination of Personal Use and Renting It Out

If you combine personal and rental use - you can deduct the appropriate percentages of expenses based on the amount use. For example, if you use your second home 40% of the time for personal use - you can deduct 60% of the expenses if it is truly rented out that percentage of the year. Important point here though - remember if you rent it out more than 14 days you must report ALL rental income.

The $500,000 Capital Gain Exclusion

If you know you are going to sell your vacation home at some point in the future and will probably have some type of sizable gain you may be able to qualify to exclude up to $500,000 in capital gains on your second home sale. This is accomplished by turning your second home into your primary residence. How do you do that? Well, the only way to do this and stay within the IRS rules is to make your second home your primary residence for two of the five years prior to the sale. Obviously, this takes some long-term planning and foresight to accomplish but it could mean a tremendous tax savings in the long run.

Disclaimer! Please note this post in no way is meant to give out tax advice. It is strictly to provide some basic (and we stress the word “basic”) ground work about second home ownership and how it relates to income taxes. Everyone’s tax situation is different. You must consult your CPA, tax planner, or attorney to make sure you are properly following the IRS rules as they pertain to second home ownership before proceeding.

By: Mike Kennedy February 20th, 2008 Category: Deep Creek Lake Activities, Deep Creek Lake Area Things To Do

Because of last weekend’s snowmobile incident on Deep Creek Lake and in anticipation of this weekend’s Deep Creek Dunk event, Patty Manown Mash of the Maryland Department of Natural Resources wanted to distribute this warning from her office.

DATELINE - Swanton, MD

The Maryland Park Service alerts snowmobilers of the potential for unseen safety hazards on the lake, particularly at night.  Starting on Wednesday, February 20th, an area of ice will be removed near Uno’s Restaurant to create open water for the Special Olympics Deep Creek Dunk. This area will remain unsafe for quite some time and will be marked with reflective traffic cones. Also be aware that lake surface conditions under bridges where road salt and abrasives are plowed from the pavement are often particularly hazardous. Other conditions that may cause unpleasant situations are unseen snowdrifts or pressure ridges that can act as ramps and cause sleds to become airborne leading to a loss of control and accidents.

 Deep Creek Lake is a part of the designated ORV trail system permitting use by registered snowmobiles only. Permits are available by mail or at any of the local State Park offices during normal business hours. Snowmobiles may operate at night if equipped with working head and taillights. Access to the lake may be made at Deep Creek Lake State Park or with permission from a private landowner with a permit site adjacent to the lake.

Ice fishermen, hikers and cross-country skiers traveling on the lake should also exercise caution.  The wearing of or having a readily accessible personal floatation device could prevent a tragedy.  If you encounter people, pets or wildlife that have fallen through the ice, contact either 911 or the toll free DNR Communications number 1-800-628-9944 for assistance.

For further information on ice conditions at Deep Creek Lake, contact a ranger at the Park Headquarters office (301) 387-5563 or the Discovery Center on weekends at 301-387-7067.

By: Mike Kennedy February 19th, 2008 Category: Deep Creek Lake Real Estate, Fractional Ownership

One of the newer trends in our real estate market here at Deep Creek Lake has been the introduction of fractional ownership. The first fractional offering was developed by a company called Second Homes at DCL. This concept has been a little slow to catch on in this market  - there have only been a handful of fractional sales in the past year or so. But fractionals are huge in other resort markets - like Park City Utah, Steamboat Colorado, and Vail to name just a few. It’s only a matter of time until the fractional concept catches on here at Deep Creek Lake and Garrett County. 

What is fractional ownership? In a nutshell, it’s owning a fee simple ownership percentage in a property - the most common in our market being a 1/6th ownership. For your share you get the ability to use that property 1/6th of the year - or in other words 8 weeks out of the year - (52 week less 4 weeks reserved for maintenance divided by 6 fractions). And then the 8 weeks you can use it usually get broken down by the season - you can use the house for 2 weeks in the summer, 2 weeks in the fall, 2 weeks in the winter, and 2 weeks in the spring.

Pros & Cons - It’s important to note these are NOT Timeshares or Residence Clubs. These properties are fully furnished, fully decorated and ready to go when you arrive at it - all the way down to having a full roll of toilet paper hanging in the bathrooms. Other than buying groceries you will spend no time maintaining the property….no cutting grass, no changing light bulbs, painting, etc. 

While this fractional concept isn’t for everyone looking to buy a vacation or second home - it does open up a unique opportunity for those looking to purchase something they may have not had the means to do on their own. Basically, it makes these types of properties more affordable. For a little over $329,000 you can buy part of and enjoy all the benefits of a lakefront home that would normally cost well over $1,000,000 by itself. And you can split the ongoing costs and maintenance expenses - like real estate taxes, HOA dues, and utilities - six different ways now. On the flip side though, you do only get to use the property 8 weeks out of the year…..but most survey’s show that vacation home owners only use their properties 8-10 weeks each year anyways. And if you decide your deeded interest can be sold, willed, or gifted at a later date.

Current Offerings - If you are still interested please contact us about the current fractional ownership opportunities in this market. We are the only real estate company in the area right now offering fractionals. Below are some of our offerings - it’s a nice mix of the different types of properties you can find at Deep Creek Lake;

• 1/6th of a lakefront home in Waterfront Green for sale for $329,000
• 1/6th of a lakefront townhome at the brand new Creekside condominiums for $259,900
• 1/6th of a lake view townhome at Overlook Villas for $259,900
• 1/6th of a lake access home with indoor pool at Cedar Shores for $299,000
• 1/6th of a lake area duplex style townhome at Northlake Village for $119,900

In future posts about this topic, we’ll work through some of the math and show you how all the numbers work - and we’ll also try to better explain how the usage rotation works as well - but until then please use this post as a starting point to better understand this unique concept in property ownership.

By: Mike Kennedy February 16th, 2008 Category: Deep Creek Lake Real Estate, Interest Rates and Loans

In order to stimulate the economy and the national housing market, President Bush recently signed House Bill HR 5140 - which may raise the conforming loan limit to as high as $729,750. This new bill could quite possibly have an impact in our local real estate market here at Deep Creek Lake in the near future.

 The current conforming loan limit is $417,000 - if you borrow over that amount you the wind up in what lenders will usually call a Jumbo Loan - and to balance out risk for these lenders - Jumbo Loans usually have interest rates 0.50% to 0.75% higher than conforming loans.

This stimulus package gives HUD the ability to raise the conforming loan amount within the next 30 days to as high as $729,750….and the ability to implement the new limit in certain markets - the big questions yet to be answered are “how much” and “where”. 

Hopefully these higher loan limits will be enacted here in the Garrett County and the Deep Creek Lake areas. If so interest rates will drastically improve for those financing vacation and second homes in our market. Most of our lake access homes right now are priced between $500,000 and $1,000,000 - and most of our lake front homes are priced over $1,000,000.  These higher loan limits will surely give those shopping for vacation homes in our market better financing options than what they had before - better financing options will more than likely spur on a few more potential buyers who may have been sitting on the fence - more potential buyers will surely stimulate our number of vacation home sales this year.

According to the article there is still a lot of grey area to be worked out - hopefully it works in the favor of those thinking about buying a vacation or second home this year.

By: Mike Kennedy February 14th, 2008 Category: Deep Creek Lake Market Update, Deep Creek Lake Real Estate

Like most other resort markets around the country the Deep Creek Lake and Garrett County Maryland real estate market for the year ending in 2007 can be summed up in the following sentence…..Total Number of Sales Down, Average Sold Price Up.

So the question then becomes - Was Deep Creek Lake a good real estate market in 2007 or not? The answer really depends on who you ask - if you already own property here your value went up again in 2007 so their answer would be that it’s still a very good market…if you ask someone who tried to sell their property last year you would probably get a mixed reaction - most still ended up selling for what they wanted but it certainly took a little longer to get there….if you ask any local Realtor they would probably tell you the market stinks - of course they would be saying that because less sales equaled less money in their pockets last year - or in simple terms, bad for us - not so bad for our current clients, still good for past clients.

Below is a snapshot of what occurred in our market in 2007;

                                     No. of Homes Sold          Avg. Sold Price

                                   2006               2007         2006              2007

Deep Creek Lake        308                 215        $537,498      $559,168

All of Garrett County   510                 374        $396,499      $400,460

(Includes DCL)

It’s important to note that the Deep Creek Lake numbers above include everything residential in nature - homes, town homes, condos, and a few fractional ownership sales we had. It also includes a wide variety of different locations and settings within the lake market - lakefront properties, lake access properties, lake view properties, Wisp Ski Resort properties, and properties that have no access to the lake but are just in the general vicinity. Those different types of properties can vary greatly in value.

The big question we get asked now - Is it a good time to buy at Deep Creek Lake?

For those of you thinking about buying we truly believe now is probably as good of a time as there is to seriously consider buying in this area. The fundamentals are still very much in place for future appreciation - but we probably won’t see the extremely high appreciation rates we saw earlier this decade. That’s for sure.

Why is it still a good time to buy? The main factor is inventory - if our inventory of lakefront and lake access homes remains low into the future - which it should because the entire lake is almost fully developed now - prices should continue up. There is no reason to believe our inventory will ever get that high on and around the lake - there are only a few parcels left that could possibly be developed. If you talk to anyone who has been around this market their entire life they would probably concur that prices have always gone up at Deep Creek Lake - ever since it’s inception in 1925. It’s very hard to go back in history and find a time that real estate values ever went down at Deep Creek Lake.

When will the number of sales start to go back up again? It’s hard to say really - the experts predict we won’t see a positive trend in the number sales until 2009 at the earliest. From what we’ve seen so far, 2008 is starting off a lot like 2007 did. We have our normal amount of potential buyers who want to buy a vacation home for personal use and have the means to do it - it seems we lost that group of people who were buying for speculation, quick flipping, and who might have been stretching themselves financially to make it happen. Those people seemed to have disappeared over the last year or so. The national media has made a lot people think that buying real estate is a bad thing to do right now - this situation won’t change until the perception shifts back to real estate being the “cool” or “in” thing to do again. But the smart buyers are the ones buying now - before things heat back up.

Some other interesting real estate happenings that occurred in our market in 2007 -

• A new record sold price for a lakefront home was set in 2007 - a new construction spec house in The Reserve at Holy Cross sold for $2,830,000.
• Two homes sold for over $2 Million in 2007 - in 2006 only one home sold for over $2 Million in this market.
• In 2007 there were 22 homes that sold for $1 Million or more - in 2006 there were 30 homes that sold for over $1 Million.