Rebuttal To Republican Newspaper Article
 |
By: Mike Kennedy mkennedy@railey.com 301-616-6106 March 26th, 2008 Category: Deep Creek Lake Market Update |
We would like to take this opportunity to give our opinion and clear up a few misconceptions and misinformation about the condition of the real estate market in Garrett County. The old adage “if it seems too good to be true, it probably is” used in the article of March 6, 2008 in The Republican may be applicable in certain situations. (Unfortunately this article is not online and can not be linked to.) The old adage “don’t believe everything you read” may also be applicable. Contrary to the opinions of some, the real estate market in Garrett County is alive and well and quite frankly improving each and every day.
There is no doubt that 2007 was a year for Garrett County real estate companies, as well as buyers and sellers of Garrett County properties, to re-evaluate strategies, do some belt tightening, and find innovative ways to market their properties. The real estate market in Garrett County over the past 20 or so years has been nothing short of amazing. National publications have called the Deep Creek Lake real estate market one of the hottest in the east. The last several years have continued that trend and we have been in a boom market since the early 1990’s. Any downturn at all from those highs was bound to be a shock to buyers, sellers, real estate agents, and real estate companies. While the number of transactions in Garrett County were down in 2007 from 2006, it would have been very difficult, in any market, to sustain those levels generated over the past three or four years. Even though the total number of sales was down, listed below are some facts that we would like to share with you.
- According to our MLS, the Metropolitan Regional Information System, the average marketing time for properties in 2007 was roughly the same as the previous five years in both the Deep Creek Lake and the Garrett County residential markets.
- The average sales price for a residential property in Garrett County actually increased in 2007 over 2006 - and so far in 2008 has increased again, roughly 21% over the previous year.
- The average sales price for a residential property in the Deep Creek Lake area also increased in 2007 over 2006 - and so far in 2008 has increased again, roughly 19% over the previous year.
What does all this information tell us? It tells us that the market isn’t as bad as the “doom and gloom” people would have you believe. There are hundreds of ways to look at statistics and manipulate them into what you want to believe. At Railey Realty, we choose to believe that Garrett County and Deep Creek Lake real estate is still one of the best investments a person can make, no matter how hard the national news networks are trying to convince us otherwise.
In our opinion, 2008 is looking to be a great year for real estate sales in Garrett County. Because there are so many “spin off” businesses that rely on the real estate industry, we hope and believe they will also have a banner year. If the last couple of months turn out to be a good barometer of what will happen in 2008, everyone in the county should benefit from the increase in real estate activity. Our agents have been very busy recently showing properties to prospective buyers. They have been busy listing new properties. They have been busy writing offers and contracts. As an owner and the Broker of Railey Realty, I am extremely excited about what lies ahead in 2008. We look forward to continuing our efforts to help hundreds of families each year realize the “American Dream” of home ownership.
Sincerely,
Kevin D. Liller
Railey Realty
Tags: Deep Creek Lake Real Estate, Garrett County Maryland Real Estate, Republican Newspaper
April 1st, 2008 at 11:39 pm
If everything is so great why do sold prices seem to be about 10% below list prices?
A few examples from your “Sold Gallery”:
926 MARSH HILL RD List: $749,000 Sold: $600,000
1844 MARSH HILL RD List: $565,000 Sold: $515,000
STOCKSLAGER List: $185,900 Sold: $150,000
So are your agents overly optimistic when listing properties or is the market truly in decline (even at Deep Creek Lake)? I don’t see how you can manipulate these numbers in any way to suggest the DCL market is “well and improving each and every day”.
Another misinformation campaign from a familar source.
April 3rd, 2008 at 4:16 pm
Dan - I can certainly appreciate your comments but would like to elaborate a little more on the selling process and the current market we are experiencing.
When a seller contacts us to list a property for sale we provide that seller with a range of suggested list prices after preparing a comparative market analysis (CMA). This CMA is based on current inventory levels and the recent sold prices of comparable properties. However, it is ultimately the seller who determines the final list price. I will tell you that some sellers in our market shoot much higher than our suggested prices while others do not. Each seller has his or her own motivation for selling as well and those motivations are certainly factored into what that seller ultimately sets the price at.
Regardless of what we or the seller might think a property may be worth in the beginning of the sales process - in the end though, a piece of real estate is only worth what a ready, willing, and able buyer is willing to pay. In the three examples above - yes, the list price/sold price ratios are not good by any means. However, I do believe a good statistical sample involves more than 3 properties though.
According to our MLS for all of 2007 - the list price to sold price ratio of all residential properties sold in the Deep Creek Lake area was 95.5% - the average list price was $572,443 and the average sold price was $546,698. I doubt either one of us could find a healthier ratio in all other Maryland counties, in addition to other regional or national markets for that matter.
We are certainly down in the number of transactions (sales). No one is going to argue that fact and there is no way to manipulate those numbers. But the numbers also show that the average sold price in the Deep Creek Lake market continues to climb. So if property values continue to rise and the number of sales are down - is that considered a declining market? To be in decline - a market must be showing decreases in both values and the number of transactions. Since our property values are still increasing we can’t be in a decling market.
Is our market as super strong as it was between 2003 and 2005? I would certainly say not - those years will probably be considered our “boom” years when we reflect back in the future. In my opinion, 2006 and 2007 is quite simply our market getting back to normal - nothing more, nothing less.
April 6th, 2008 at 9:12 pm
You are absolutley right that those three properties I listed are not a good statisical sample, but I would argue that comparing the small number of properties sold this year to small number of properties sold last year is also not a good statisitical sample of the “value” of all Garrett County real estate. If, for example, the distribution of properties sold this year was considerably different than last year your data is skewed (you probably learned about that when you got your MBA). Certainly, having more high-end properties selling this year as a percentage of the total than last year increases the average sold price from one year to the next, but then you are extrapolating those data to ALL properties when you say “values are still increasing”. My 3 out of several hundred extrapolation is similar in nature to your own 300 out of maybe 10,000-20,000 extrapolation.
Don’t believe me? Take last year’s data and decrease the value all homes 10% and then start taking out some of the low end sales and adding in a record sale (which happened). It doesn’t take long until your average sold price is a net positive despite the fact that you have decreased the value of every single property by the same percentage.
April 17th, 2008 at 12:16 pm
http://www.city-data.com says for Swanton homes, the average sale was abt 550K$ for the first 3 quarters of 2007 & 150K$ for the 4th quarter. It also shows homes sold count on same graph. It looks like abt 95 sold in 2006 & only 56 sold in 2007. The 150K ave for 4th quarter corresponds to only 2 sold.
Dick