Hunter’s Outlook on the Lakefront Real Estate Market - 2009

The Real Estate market is different, today, as most folks would agree.  When the topic of real estate comes up in a conversation, people seem to put too much trust in the news media.  Once people find out that my profession is in the real estate industry, they tend to have a pity look on their face.   I have to convince them to not feel sorry for me, especially since I am having record-breaking production months right now!  The waterfront market is moving and moving quickly for several reasons:

1. With interest rates at a 30+/- year low, people are able to afford more of a house for less money.
2. Banks are lending to people with good credit and with 2 year job/income history
3. Sellers are negotiating.  I represent many buyers (and Sellers).  What has happened in the past and is still happening currently is that sellers would list their Lake House above market value (sometime several hundred thousand above market value).  Their hopes are that someone will fall in love with their house and be willing to pay anything for it.  There are a lot of lake houses on the market. (36 on Lake McQueeney, 18 on Lake Dunlap, and 10 on Lake Placid) as of 2/3/09 in the Central Texas MLS.  Last year at this time, there were about half as many listings on the market.  The houses that are currently selling are typically listed at a sellable price.  If the price is not saleable, then the sellers are receiving some offers, as much as 6 digits under their list price (or no offers/showings at all).  Buyers may or may not be afraid to low ball.  If you look at the lakefront property that has sold through the Central Texas MLS in the past few months you will see that the houses that have sold are typically the result of the sellers taking 10-20+% off their list price.  Examples Below:
   • Home in Long Creek on Lake McQueeney- Original list price $678,500 – sold price $590,000 after seller’s concessions – 13% off of the list price.
   • Home in Woodlake on Lake McQueeney – List Price $725,000 – Sold Price $525,000 on– nearly 28% less than list price.

A GOOD RECOMMENDATION TO SELLERS:

Sellers of Lake Houses on Lake Dunlap, Lake McQueeney, Lake Placid, and Meadow Lake need to use extreme caution when listing their homes based on the list price of their neighbor’s house.  If you are about to list a waterfront property, pay attention to the following analogy.  If you list your house above market value, it is like chasing a toy slinky down a staircase.  Every time you get close to the slinky, it moves one step lower and eventually you will tumble down the stairs.  How do you beat the slinky?  Get beneath it.  Translated by the following example: You list your house on Lake McQueeney for $100,000 over market value at $600,000.  Two months later (after no activity) you reduce it to $575,000. Two more months later, you reduce it again to $550,000, and so on.  By the time you talk yourself into listing your house at the real market value, your house has now become “stale on the market”.   The next reductions will be downward to $475,000 or $450,000 to get any activity.  If the seller would have listed the house initially at $499,000 (a realistic value), then they would have sold their house faster AND for more money AND for less hassle.