Lake, Lake, Lake

I've been AWOL from this blog for the past couple of weeks. I've been super busy working with buyers. It's like a fire hydrant opened, with the calls and emails and requests for appointments. A bit of a surprise, actually, as the couple of weeks going into Labor Day tend to be slow becuase people are getting kids ready to go back to school and thinking about their last summer hurrah.

Almost everyone in the past couple of weeks has been asking about lake property. That's understandable, given the 6th heatwave string this summer of 90+ days in New York City (a record, by the way.) What's been surprising, as I've called around to set up appointments to show houses, is how many lake houses have accepted offers or contracts on them.

In August, six lakefront homes sold — five in the $300's and one in the upper $200's. There are six other lakefront houses in contract, a seasonal likely to sell in the upper $100's, three in the $300's, one in the $400's and one in the $500's. That one going in the $500's has 5BR, 2BA with approx. 4,000 sq. ft.

I'm aware of another 4 lake houses with accepted offers but not yet in contract. There may be some others with accepted offers that I don't know about (since "accepted offer" is no longer a status entered into the Sullivan MLS.)

One common factor, from both the buyers I'm talking with as well as looking at the lake houses that are selling, is a focus on the moderate price range. While there's a smattering of activity in the $400's and $500's (and one Chapin house in a deal in the $1M+ range), most of the action is in houses in the $300's and below. Almost all of the lake houses that are moving have very good lakefront. They may not have a lot of it (some of the less expensive houses may only have 60 or 70 frontage feet), but what's there tends to be quite nice, and on larger deeper lakes. I'm not seeing a lot of action on houses on smaller, shallower lakes. (There are a couple of exceptions, where the houses have been pretty spectacular.)

If all the lake houses currently in contract or with accepted offers close, and pick up a few more in the next 6 or 8 weeks (which is likely, as September and October tend to be strong selling months), lakefront sales in 2010 could be on track to equal 2009. That's a bit of a surprise, because lakefront sales during the first half of 2010 were very weak.

The lakefront sales pickup is helping to establish some pricing benchmarks, particularly for the affordable to moderate range of lakefront. With more comps, appraising is more clear cut. The upper end of lakefront is another story. With very few sales above $500,000, pricing and valuation becomes much more difficult. In the under $400K range of lakefront houses, I can extrapolate from the current sales to zero in on a supportable value range for a property. But at upper price points, there are very few data points to extrapolate from, so it's more difficult to bookend a supportable value range for a house.

Comments

[bluelite]

Dave,

I was listening to Bloomberg radio the other day and they were talking about real estate in the upper end second home markets. They gave the Hamptons as an example and said the deal volume is considerably higher than last year. Maybe all the doom and gloom is starting to bounce off people.

[Eric]

Are you seeing the same trend regarding "lake rights" homes?

[Sheldon Appleman]

"Now's NOT the Right Time to Buy A House"

NPR Audio:

http://n.pr/9oCu9k