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

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