Railey Realty - Deep Creek Lake Real Estate Market Trends

(Click on below links for more information)

Why Has Deep Creek Lake Real Estate Become So Popular?

Appreciation Rates

What Does the Future Hold?

Why Has Deep Creek Lake Real Estate Become So Popular?
To get a better feel of where the experts think we are headed in this market, it might be best to learn how the Deep Creek Lake market has grown over the past several years.

	Easier Access - Interstate 68 was completed in 1991. This new highway made it a much shorter and easier drive from the Washington, D.C. and Baltimore areas. This opened our market up to more potential buyers from those high population areas. Before I-68 was completed Deep Creek Lake's nickname was "Maryland's Best Kept Secret," and for good reason. It was very hard to get to and was mainly a market for vacationers and second home owners from the Pittsburgh area.
	Area Appeal - Deep Creek Lake is a true four-season resort area. It is the only resort market in the Mid-Atlantic that boasts a freshwater lake and a downhill ski resort. The high elevation creates a naturally cooler climate that produces more annual snowfall and lower humidity for people looking to escape the city heat. Activities that take advantage of Garrett County's mountainous topography are plentiful in this climate.
	Improved Infrastructure - Public sewer availability around the lake has been expanding ever since the early 1970's, now covering about 50% of the watershed. More import, though, have been the recent improvements made to the Wisp Ski Resort. These improvements have included award-winning snow making technology, faster chair lifts, a new snow tubing park, mountain coaster, and recent remodeling of the lodge and hotel.
	Tax Law Changes - In 1997 the tax law was modified to allow taxpayers to exclude up to a $500,000 gain on their primary residence. This allowed many people to trade their primary residence for a smaller house - and sometimes using any leftover gains to buy a vacation property.
	The Baby Boom Effect - The first wave of the Baby Boom generation, with their enormous purchasing power, entered their prime spending years in the mid to late 90's. The Baby Boom generation is the largest demographic group in the county and currently holds the greatest amount of wealth. A large number of them have always had a goal to buy a second home or some type of resort property. Many have fulfilled this dream over the past several years.
	Stock Market Ups & Downs - The performance of the stock market and other types of investments has generally remained flat over the past several years. Investors have now realized that owning real estate can sometimes provide a safer long-term return. More specifically, resort real estate has outperformed many other types of real estate over the past few years due to its limited supply nature.
	Limited Supply - By the turn of this century, approximately 63 of the 65 miles of shoreline around Deep Creek Lake had already been developed. Land and homes around the lake have never really been in great supply since the lake was built in 1925.
	Low Interest Rates - Since the end of the 1990's, interest rates have remained relatively low compared to other times throughout this country's history. Lower rates have allowed buyers to have more purchasing power -often, providing more flexibility and leverage to buy resort property.

Market Trends
As with most other real estate markets, we experienced tremendous growth between 2001 & 2005. Recent trends of slower sales due tonational economic troubles have been recently experienced, however, most Deep Creek Lake property owners still enjoy nearly all appreciation gains from earlier this decade.

Lakefront Residential

Sold Prices

	2004	2005	2006	2007	2008	2009
# Sold	108	123	92*	77	61	39
Min	$159,000	$190,000	$210,000	$255,000	$260,000	$250,000
Max	$1,670,000	$1,875,000	$2,030,000	$2,830,000	$1,907,000	$1,650,000
Avg	$643,527	$714,451	$861,727	$867,198	$879,625	$787,137
% Inc	13%	11%	20%	1%	1%	(11%)

(All data obtained by MRIS for lakefront properties sold including all homes, town homes, and condos. All data believed to be accurate but not guaranteed.)

* Does not include 32 Silver Tree Suites studio condominiums that sold in 2006 with an average sold price of $283,907.

Lake Access Residential

Sold Prices

	2004	2005	2006	2007	2008	2009
# Sold	84	101	70	52	43	30
Min	$190,000	$220,000	$186,500	$231,600	$244,000	$87,000
Max	$1,200,000	$1,900,000	$1,275,000	$900,000	$500,894	$443,591
Avg	$443,485	$492,904	$516,220	$501,953	$500,894	$443,591
% Inc	22%	11%	5%	(2%)	0%	(12%)

(All data obtained by MRIS for lake access properties sold including all homes, town homes, and condos. All data believed to be accurate but not guaranteed.)

*Disclaimer: Appreciation rates are for informational purposes only.
Future rates may differ and are not guaranteed.

What Does the Future Hold?
While we can't control the variables that drive our market, and all markets go up and down, we expect the Deep Creek real estate market to return to more traditional times - steady sales and appreciation. Even though prices around the lake might seem high, we still believe it is a great time to buy all types of properties for the following reasons:

	Demographics - Population models from the United States government show that the Baby Boom generation, the buyers of these types of properties, will continue to be a major force in the market until sometime between 2015 and 2020. This should result in a steady stream of prospective buyers well into the future. .
	Continued Popularity & Improvements to the Area -The improvements to the Wisp Ski Resort and the construction of the new Adventure Sports Complex atop Marsh Mountain should continue to increase the appeal of the area. The Wisp Ski Resort continues to add new trails and plans to offer more activities in the future. This is evidenced by the recently opened North Camp, which features ten new trails and two new chair lifts. Most of this expansion features more family-friendly beginner trails. The new Adventure Sports Center features a re-circulating whitewater course, amphitheater, retail shops. This center organizes various outdoor activities such as mountain biking and cross county skiing and allow more people to participate. These activities and improvements continue to make the area more appealing.
	Stock Market Ups & Downs - Demographic models also show that the first phase of the Baby Boom generation will start reaching their retirement years around 2015. It is predicted that many of them will start to withdraw money from their 401(k) retirement plans in order to maintain their active lifestyles. If this large demographic starts selling stocks and other investments, the value of the stock market could continue to remain flat or even decline at that point. If this does happen, experts say that real estate should continue to be an attractive investment.
	Limited Supply of Properties - We should continue to see a limited supply of properties on or near Deep Creek Lake well into the future. Unlike some other lakes in the eastern United States such as Smith Mountain Lake and Lake Norman, nearly all of the shoreline around Deep Creek is already developed. And larger parcels of land near the lake that could be developed should continue to be scarce. With the exception of WISP Ski Resort, large amounts of new construction and real estate development are highly unlikely in the area.
	The Bubble? - The real estate "bubble" that you may read or hear about on the 6 o'clock news is usually considered in a context characterizing the entire United States real estate market. While that type of report fits nicely in a magazine or newspaper, it is important to understand that each market, especially a highly specialized one such as Deep Creek Lake, has its own fundamentals and factors that contribute to its decline or success. Unlike the national real estate market, we believe the Deep Creek Lake market has a variety of unique assets and fundamentals which will continue to sustain property values for the future.