Another Year Older

The last few years have been kind of an odd situation for many people, in that they can't easily move on with their lives because of the marginal real estate market. They are seeing life dreams slip away as they get another year older.

Unfortunately, it's not just the sellers who can't move; it is also the people who want to buy those sellers' homes -- but forced to be sellers themselves first. Until we find a large group of buyers, at some price range, who can purchase easily without selling their homes first, this stagnation will continue. And, obviously, that group of buyers will also have to want to purchase!

I've heard all the rationale that spews out of the real estate forums, and from the mouths of real estate gurus. Much of it makes sense, such as just selling your home for what you can and then making it up on the other end. It is true that this will probably work just fine...if you don't owe more than you can sell your existing place for. But the reality is that more and more people are stuck in a kind of quicksand that keeps pulling them further and further into a quagmire, away from their chosen path. And that is the sad reality of this drastic whack in prices which is keeping many creative and motivated people from: moving to new cities, meeting new friends, starting new businesses -- and hiring new employees that would get the economy moving again.

But there are still a fair amount of buyers who can purchase without selling their existing homes, and I think the group who is choosing to do that may be increasing in numbers. With prices down 35-50% in some market areas, it seems that some of those people are realizing that there may never again be an opportunity like there is now to purchase a lake home or cabin at such an incredible discount. So maybe there are enough of those buyers to turn this mess around...at least I hope that is true!

So if you can buy, why not buy now? Go ahead and do your part to get the economy back on its feet, and most likely you will have a heck of an investment in any good lake property you purchase. There are certainly enough of them out there to choose from!

Although a few people may have profited somehow from this mess we are in, I haven't found many small business owners who even know if they can hang on for very much longer. I imagine you see just as many For Sale of For Lease signs as I do on commercial buildings on prime street corners across the state. And from what I have seen, it doesn't improve a whole lot as you drive through other parts of the country either. It is a scary thought to think of all those "mom and pop" shops closing their doors, and also having to get rid of those loyal employees who make very little in wages just to continue living in America's small towns. It will eventually be a drastic change in the landscape of the things we love most about this country.

But whatever happens is what will happen. We can try to fix it, or we can ignore it. And if this downturn continues, each year we will end up a little further from a solution to the problem.

I am hopeful that we will regain our senses and realize that small businesses are what built this country, and are what will get it going again. I'm just a small business owner myself, frustrated by many of the things I've seen lately that seem so incredibly far from any realistic solution to the problem.

So, do whatever you can to get on with your life. Some people are so stuck that they really don't know what to do next. If a few of us take a risk here and there, it might be a big enough jolt to get a few of the wheels turning.

But whether you choose to be in the group that pitches in or just sits on the sidelines, I will guarantee that we are all going to be together when it comes to the one thing we can't control. Next year each of us will be another year older...so let's make the most of it we can!

Midsummer Mania

Each year around the beginning of July, we end up with a huge spike in the visitors on our website at Lakehomes.com, and it lasts for about a month before turning back the other way to its low point a couple days before Christmas. The same thing happens on our sister sites at LakehomesUSA.com and other waterfront portals across the country. Buyers seem to choose this time of year to be the most interested in thinking about purchasing a lake home or cabin, and then they start drifting away slowly.

Selling lake properties is quite a bit different than working in general residential real estate. Waterfront buyers typically aren't moving from one home to the next, but are instead looking for second homes and vacation getaways. And even if they are thinking of moving to the water for their full time residence, they may not be your normal relocation buyer who has to make a move. So it is entirely in their court whether they make the decision to purchase or not.

After doing this business for as long as I have, I've found that if I can help these buyers understand the market quickly, it will be better for them...and for me. The lakeshore market is not an area of real estate where an agent should decide which three properties might fit a buyer's needs best, at least not until they get a good understanding of the reason why that buyer wants to be on the lake in the first place. And you aren't going to know that until you show them about twenty other lake properties so that they can get a reasonable feel for the current values and what types of structures, lots, lake sizes and lake qualities are available in their price range.

But midsummer is when lakeshore buyers are the most active in their searches -- both online and off. And they aren't out there just for the fun of it. These buyers -- perhaps you reading this article -- are actually ready to purchase a lake cabin, lot, or home...if you get the right assistance and education from your agent.

But if you choose the wrong agent -- one without the abilty to give you the proper education and direction -- you may very likely end up in the largest group of lakeshore property buyers. Those are the ones that never end up having a lake place at all!

Going To Zero!

If you are searching for marketing secrets, you really have to look no further than the front page of the daily newspaper to get great ideas. Many times I will walk past the newspaper rack in hopes that nothing will catch my eye, and I can just continue on on by. But, more often than not, at least one headline jumps out at me and pulls me back, causing me to throw out another hard-earned dollar or two so that I can read the full story -- without having to look like a cheapskate standing there thumbing through the pages.

This morning there was another blatant headline in big bold letters that I just couldn't resist: "HOME PRICES KEEP ON DROPPING." It seems like I've seen that one quite often lately, and then the next day there is a another one that says that sales have increased. I really never know what to believe any longer when it comes to real estate news, so most of it is probably best ignored.

But what really caught my eye on this article today was the fact that the Twin Cities "saw the biggest plunge among the largest 20 U.S. Cities"....and there is "no relief in sight!" Wow, does that mean we will keep going down in value until there is no value at all? We will certainly have to raise our commisssions if we hope to make any money in a market like that!

It is almost like that Extreme Couponing show, where they buy hundreds of dollars worth of items and only pay a few bucks -- or even get money back! Is the same thing going to happen now in real estate? I can envision a time in the not too distant future where a buyer might ask to for the seller to pay them a mortgage just to take the house, because there will certainly be upkeep and many expenses over the next 30 years. Buying a house could truly become an investment from day one instead of waiting around for years hoping that it will increase in value.

Well today I'm going to be out showing homes in the $300,000 to $400,000 range, because that is in the price range these buyers are comfortable with. And in the past that was important. But if we are going to zero anyway, I guess there isn't much reason to limit our options to any sort of price range. We can just keep throwing out offers on any homes that fit their criteria -- no matter the price -- until one of these sellers finally understands their place isn't worth anything...any longer!

Buyer and Seller Tips on Pricing and Offers for the 2011 Lakeshore Market

If you are a true lakeshore buyer right now -- one that is serious about purchasing a lake property instead of just looking around -- I'll give you a little insight into what is really going on in the market...and how you might find the best opportunity out there. And lakeshore sellers need to know this information too, because only the truly serious sellers are going to have success this year. So there is really no sense in tippy-toeing around this subject!

I haven't checked all the MLS areas yet, but I did look at the statistics in a couple of them last week, and there are some very telling signs about the waterfront marketplace. In looking at all the residential lake properties (homes and cabins) that went on the market from January 1st, 2010 until last week (15 months), I found that only 15% of them had sold or were pending in one of the MLS Areas, and 17% in the other. That doesn't leave a real likelihood that your lake place is going to sell during the term of your listing contract, so it is probably time to face reality on this issue.

So here is the reality...

For Sellers
There aren't enough buyers in the marketplace for you to put your lake home or cabin on the market hoping that someone might come along at a price you hope to get out of it...IF that price is more than 10% higher than what you would pay for it yourself. Be honest! Now is NOT the time to test the waters, so you are better off just waiting a year of two if you really don't need -- or want -- to get moved on. By not putting your place on the market, you will help the entire marketplace by keeping inventory lower, and you won't get so frustrated with your agent in the process because they aren't getting you all the activity you expected.

Just sit back and enjoy the lake for the time being, and hope for things to get better sometime soon. That may not happen, but unless you have a spectacular property that is incredibly unique and appealing (again, be honest) you are only going to hurt yourself by having it on the market at a price that is much over the actual value. And here are a few of the things that could happen:

1. You won't get a lot of showings...and maybe not any.
   
2. You will become frustrated with very few showings, and the negative feedback on pricing from those who do come to look at it.
   
3. You will get more hopeful on each showing you have, and start telling yourself that you will "take anything to get rid of this place!"
   
4. You will find yourself dropping your price again and again as you become more motivated, which may appear as a sign of desperation to potential buyers. And if you don't drop your price, you still won't get anyone to look at your property. You will likely find yourself lowering your price to a level below what your agent originally suggested, and then having to look for offers even below that.
   
5. If you do find a buyer to put an offer in, it will most likely be quite a bit lower than you think appropriate. And the entire negotiation will be based on hard feelings and mistrust as you try to come to an agreement, unless you just decide to accept their offer -- or something close to it -- and get moved on.
   
6. Finally, we have the appraisal and underwriting issue. Remember that if you do come to an agreement on a sale price that is hard to justify based on current market conditions, it still may not get to closing. This is a very challenging time to find support for prices that even appear inflated -- especially on lake properties where there are few comparables.
   

For Buyers
As a buyer in this market, you are certainly in the driver's seat. There are more good lake properties out there -- those with great sand beaches and superb lots -- than I have ever seen. In the past, those cabins were usually scooped up by neighbors, friends, or relatives...but not anymore. Money is tougher to come by now, and with all the inventory on these lakes, those closely held transactions are much more rare. So remember that many of these sellers are either upside down on mortgages or have lost a lot of equity that they believed they had several years ago. If you approach this as someone who is trying to take them to the cleaners, you probably won't get very far.

Here are my suggestions on finding a very good deal on a lake home or cabin, and having the seller want to work with you to get it done:

1. Look at a lot of lake properties...not just on the Internet, but in person. If you are working with a good waterfront agent, they will want you to do that so that you can educate yourself on values. I normally don't let anyone look at less than a dozen lake properties, and I prefer to show them twice that many. You will see that a few stand out from the rest of the group. But if you only saw a few, it would be hard to recognize those that were a cut above the rest. Of course, if you are in a much more defined geographic area and price range, there may not be as many available to view.
   
2. Have your ducks in order. If you are going to spend $4 per gallon for gas and a day or two to drive around much of the state to view these, then spend an hour talking to a lender to make sure what you can qualify for. I can't tell you how many times I've been out with a buyer who finds just the right property to fit their needs, but then has to figure out how they can make it work. Most lakeshore buyers usually can make it work out and know about how much they can afford, but just take care of this step upfront to put yourself in a stronger purchasing situation.
   
3. Don't think all properties are overpriced! The reason I like my buyers to look at a lot of properties is that they will end up getting a sense of what the true values are. As you wander through all the junk out there, looking at ideas to add rooms or do major updating, you will find that most of the time it will cost you a whole lot more money to do those improvements than to find a structure in very good condition already. And lots are even more important. A level, sandy lot on a good lake is generally worth about twice as much as a comparable lot with mucky shoreline or high up on a hill. So make sure you consider that value as you compare one property to the next.
   
4. Put yourself in the seller's shoes. Once you find that property that truly stands out from the rest, and is in the same price range as the others, you have come across a nugget. It may be that the other lakeshore buyers don't know as much as you do yet, so don't let them find out. If you feel it is the perfect spot for you, don't get too greedy on the purchasing end. Even at the list price, you have probably found yourself a great deal, but most sellers have at least some room to negotiate as long as it is reasonable. It's when buyers aren't reasonable that negotiations deteriorate.
   
5. Act quickly. It is now the spring market. And even though it may be somewhat slow, this is the time of year when buyers have the most motivation. There are some very good deals out there right now, and if you find the one that you feel is right for you, then it probably is! Don't delay, or you may be kicking yourself for a long time.
   
6. Finally, if you are OK with doing some remodeling and fix-ups, there is an incredible supply of lake properties that fit into that bundle. And, as you can probably guess, many of those sellers have been battle tested for a year or more already, just hoping someone comes along to make them an offer...while they keep dropping their price. There are also some real gems in this group on great lots and very good lakes. So if you don't mind doing a little work, you can be a little more aggressive on your offers here, and you will find some bargains. And generally, even low offers will be more of a blessing than an insult to a lot of these sellers.
   
   I hope this helps you look at this year's spring market with realistic eyes, whether you are a buyer or seller. If you have any other questions, please give me a call or email.

Dan Anderson
866-327-9889
info@lakehomes.com

List Your Lake Rental...Just $100 for 6 Months

With all the requests we've had this past week for rentals, we decided it was time to bite the bullet and start offering them on our site. We even decided to throw out a special price for people who wanted to take advantage of our lakeshore traffic to advertise their properties for rent. And not only will we put it on Lakehomes.com -- even highlighted as a Featured Property in the appropriate area -- but you will also be able to place it on LakehomesUSA.com as well, at no additional cost and for double exposure!

So email us or give us a call at 888-346-5253 if you are ready to get your property in front of more potential lakeshore renters than ever. Because lakeshore buyers are some of the best prospects you can find when you're looking to rent. And NOW is the time they are when they are searching!

Adding rentals to Lakehomes.com is something we planned to do quite awhile ago, because it is such a natural place for lake home and cabin owners to match their properties up with our steady stream of lakeshore shoppers. So we apologize to all of you for the delay, but we hope it was worth the wait.

Best New Lakeshore Listings in Itasca County: March 21, 2011

I had a couple nice emails from visitors who enjoyed by blog post from yesterday, which highlighted some of the more attractive lake properties listed around Minnesota during the past week. Perhaps this is the type of information busy lakeshore buyers are searching for, instead of lengthy ramblings.

Those properties were out of the Twin Cities Multiple Listing Service, which covers much of the state -- except that not all listings end up in it. So I've decided to continue pulling out some of the best new lake listings from each individual mls area during the coming days and weeks, to make this even more comprehensive for you.

This group from today is a compilation of lake homes and cabins listed recently around Grand Rapids and Itasca County, so just Click Here to view these 22 lakeshore properties. As with yesterday's group, they are generally good lots, good lakes, and have features that I have found to be attractive to lake buyers over the years.

One thing that most lake cabin buyers seem to always ask for are lake places that "feel like being at the lake." If they are using it for a getaway, they don't tend to want something that feels more like a home in city. So I've tried to use that as criteria to sort through all the listings that have come on the market.

I hope you will enjoy these undertakings to help you cut through the clutter as more lake properties come on the market. And as always, please contact me at info@lakehomes.com for more information or showings on any of these listings.

Eleven Great Lake Properties Just Listed This Week

As the real estate industry continues to evolve, I try to look for new ways to use my experience to help lakeshore buyers the most. With over two decades as a waterfront specialist throughout most of Minnesota and Western Wisconsin, I've probably learned a few things along the way that can be of great value to many prospective lake property shoppers. So I thought it might be beneficial to our visitors to point out some of the more attractive lake listings on good quality lakes new to the market each week. Especially since the spring market is now starting to heat up.

This first group is made up of lake properties just listed during this past week in various parts of Minnesota. They are in no particular price range or area, but each had certain characteristics that stood out from the other new listings. Some have great lots, a few may look like attractive values, and others may just have that "lake feel" that a lot of people are in search of. All are on good quality lakes, and when you combine good properties with good lakes...you tend to get the best long term value!

This is certainly not to say that there weren't a lot of other nice lake properties listed during the past seven days. I will be adding more from other MLS areas as well, so I hope to make this an ongoing value to our visitors. Please email me at info@lakehomes.com if you have questions on any of these listings, or if you have suggestions on other lake properties to feature in this blog.

Thanks,

Dan Anderson