Comments on: Lake Mag Interview: The Uncensored Director’s Cut http://lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/ Just another realestatetomato.net weblog Fri, 05 Dec 2008 08:49:04 +0000 http://wordpress.org/?v=2.6.1 By: Raleigh Real Estate http://lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-633 Raleigh Real Estate Tue, 13 Nov 2007 15:35:46 +0000 http://www.lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-633 Hi John - Interesting article! Looks like the drought is not the only determinant of the direction of the real estate market in Lake Martin. I know it's tough for home sellers to accept that recent appreciation isn't what it used to be. Hopefully anyone needing to sell a home in Lake Martin will soon realize that they can still take advantage of the great appreciation that the real estate market gave them in years past by pricing their home competitively now. We are suffering from really dry conditions and low water levels here in Raleigh, NC as well. It will rain again in Raleigh and in Lake Martin... it always does. Hi John - Interesting article! Looks like the drought is not the only determinant of the direction of the real estate market in Lake Martin. I know it’s tough for home sellers to accept that recent appreciation isn’t what it used to be. Hopefully anyone needing to sell a home in Lake Martin will soon realize that they can still take advantage of the great appreciation that the real estate market gave them in years past by pricing their home competitively now. We are suffering from really dry conditions and low water levels here in Raleigh, NC as well. It will rain again in Raleigh and in Lake Martin… it always does.

]]> By: John http://lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-608 John Fri, 09 Nov 2007 03:55:22 +0000 http://www.lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-608 Sam - thanks for your comments. Always interesting. No, there is no contradiction. I would not recommend anyone to buy above market value, nor to sell below it. The reason I say buy now is that buyers right now have the least amount of competition than they've had in 7 years. For every buyer, it comes down to making a decision on a individual property. For each buyer I work with, I supply them with the data they need to make the call. Paying over market value is not part of the plan. Furthermore, the 30% I quote is not some fuzzy market based number, but based on research where I looked at exact homes that have sold multiple times over that period, condos that have sold multiple times, and lots that have sold multiple times. With regard to your comparisons to other investment vehicles, I would say, when was the last time you talked to someone at the end of their life, and they said, "honey, remember that 401k we had, accout 12345, didn't the kids love it?" Has anyone ever taught their kids to swim in a CD? Ever gotten married at an IRA? Ever proposed to their future wife at a REIT? I don't blame you for renting over buying at Lake Martin. Buying is not for everyone. I will probably never, ever buy a home on Lake Tahoe. But - I am not the type of person that "hates on" people that do. I am sure that there are plenty of nice people that live there, that's their business. Since you're so fond of quoting numbers, I am sure that you are an astute investor. Perhaps the most effective investor around is Warren Buffet. Have you ever read what he says about when to buy in any industry? Does he hop in at the peak of a seller's market? Or during a buyers'? Doesn't he make more "contrarian" moves than bandwagon ones? Thanks again for coming in, Sam. John Sam - thanks for your comments. Always interesting.

No, there is no contradiction. I would not recommend anyone to buy above market value, nor to sell below it. The reason I say buy now is that buyers right now have the least amount of competition than they’ve had in 7 years. For every buyer, it comes down to making a decision on a individual property. For each buyer I work with, I supply them with the data they need to make the call. Paying over market value is not part of the plan.

Furthermore, the 30% I quote is not some fuzzy market based number, but based on research where I looked at exact homes that have sold multiple times over that period, condos that have sold multiple times, and lots that have sold multiple times.

With regard to your comparisons to other investment vehicles, I would say, when was the last time you talked to someone at the end of their life, and they said, “honey, remember that 401k we had, accout 12345, didn’t the kids love it?” Has anyone ever taught their kids to swim in a CD? Ever gotten married at an IRA? Ever proposed to their future wife at a REIT?

I don’t blame you for renting over buying at Lake Martin. Buying is not for everyone.

I will probably never, ever buy a home on Lake Tahoe. But - I am not the type of person that “hates on” people that do. I am sure that there are plenty of nice people that live there, that’s their business.

Since you’re so fond of quoting numbers, I am sure that you are an astute investor. Perhaps the most effective investor around is Warren Buffet. Have you ever read what he says about when to buy in any industry? Does he hop in at the peak of a seller’s market? Or during a buyers’? Doesn’t he make more “contrarian” moves than bandwagon ones?

Thanks again for coming in, Sam.

John

]]> By: Sam Freeman http://lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-601 Sam Freeman Wed, 07 Nov 2007 21:02:39 +0000 http://www.lakemartinvoice.com/2007/11/05/lake-mag-interview-the-uncensored-directors-cut/#comment-601 Great interview. John's insight and knowledge about Lake Martin are outstanding. However, I wonder if he realizes the contradiction between his statement that "From 2000 to 2006 sellers became accustomed to 30% gains in value per year, and priced in 07 accordingly" and his call for buyers to come buy now. Should buyers buy at 30% above market value? The bottom line is that it was way, way dirty cheap to rent on lake Martin in comparison with the cost of owning a house or a condo, left alone a lot to camp on! So, it will take time for the prices to reach the bottom. Even if sellers do not wake up to the realities, inflation will make the prices go down anyway. Let me explain. Consider a seller who wants to sell his house at $750K and won't sell for less. AT the current pace, it may take him 3 years if he/she is lucky to ultimately sell at $600,000. First, his sitting $600K would have brought him $160,000 in interests (CDI for deposits over $100K bring 8.25% yield) over the 3 years period. Moreover, $600K after 3 years is worth no more than $548K. After the three years, the seller would have lost $212K ..... But, maybe, he would hold another 3 years and sell the house for the price he wanted $750K!!!! In that case, he would lost much much more money... Great interview. John’s insight and knowledge about Lake Martin are outstanding.
However, I wonder if he realizes the contradiction between his statement that “From 2000 to 2006 sellers became accustomed to 30% gains in value per year, and priced in 07 accordingly” and his call for buyers to come buy now. Should buyers buy at 30% above market value?

The bottom line is that it was way, way dirty cheap to rent on lake Martin in comparison with the cost of owning a house or a condo, left alone a lot to camp on!

So, it will take time for the prices to reach the bottom. Even if sellers do not wake up to the realities, inflation will make the prices go down anyway. Let me explain. Consider a seller who wants to sell his house at $750K and won’t sell for less. AT the current pace, it may take him 3 years if he/she is lucky to ultimately sell at $600,000. First, his sitting $600K would have brought him $160,000 in interests (CDI for deposits over $100K bring 8.25% yield) over the 3 years period. Moreover, $600K after 3 years is worth no more than $548K. After the three years, the seller would have lost $212K …..
But, maybe, he would hold another 3 years and sell the house for the price he wanted $750K!!!! In that case, he would lost much much more money…

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