Naples, ME

If your a potential buyer of lakefront property or an owner who may be comtemplating a possible sale, it's tough to know quite what to do in this market.

If you bought in the last five years or so and are needing to sell, for whatever reason, you may well be looking at a loss - and that scenario may hold for another year or two, nobody really knows.

If you're a potential buyer, then you are wondering where the bottom is so you can get in at the optimum time. Again, nobody knows when that will be - or maybe even if that time has already passed.

Economic markets are all being seen in the rear view mirror - with varying lag times. As an example, we just found out that we have been in a recession for about a year. Some will tell you that by the time we can finally quantify and recognize a situation, the situation has passed and we have moved on to another condition in the market. The real estate market is no different.

As a potential buyer or seller of Maine lakefront property the best you can do is educate yourself and stay in touch with the market. We do the same here at Mr. Lakefront as we are regularly contacted by potential buyers and sellers alike wanting to know our opinion of the local lakefront real estate market.

There are some general areas we need to keep apprised of. One is the relation of the overall, nationwide financial crisis to what's going on in the real estate market. Then you have to divide up what is pertinent to the overall market compared to the local real estate market and then, even more specifically, to the second home/lakefront market. Then you have to look at all things in the context of "what is perception/emotion and what is reality".

Doing all of this is a tall order. When we look to Washington and see the greatest economic minds grappling with the economic situation, many come away feeling there's a lot of bumbling and ineptitude going on. If these guys can't seem to figure out what to do, how confident can we feel when it comes to choosing the best course of action for ourselves?

There is some solace in educating ourselves, as I have said. Knowing what other people are thinking and doing will at least provide us food for thought, which may then help us know which actions to take.

Accordingly, I offer up another recent article from the NYTimes that talks about this second home market in more detail. It may not provide answers, but it will at least be thought-provoking and help you gain some insight on what's going on. To go to the article click here.

If you'd like to stay abreast of the Maine lakefront real estate market, go no further than our very own Lakefront Locator. You can see all the current listings in one place and navigate through them in a variety of ways.

It seems that plans for finding a solution to repairing or replacing the aging swing bridge that spans the waters of Long Lake and Brandy Pond in Naples are alive and well.

A report in last week's Bridgton News tells of a repair plan that would solve saftey issues, put off any significant construction issues for another ten years, and cost a manageable $550,000.

Both local officials and members of the grassroots organization "Save the Bridge" find a lot to like with this new proposal and local state representative Rich Cebra will be talking with folks on the Transportation Committee in Augusta to try and get them on board.

This new proposal would basically repair the existing bridge for a fraction of the cost of replacing the existing bridge with either a fixed span bridge or a drawbridge. Those proposals were projected to cost, at a minimum, $7 million and had locals up in arms because the state was pushing for the fixed span option while many locals were vigorous in their support for a more expensive drawbridge.

We have posted the full article in our Lake News. Read all about it here.

One of the primary responsibilities of a lakefront property owner is to be familiar with and properly maintain their septic system. Also, those planning to buy an existing home or build a new home need to familiarize themselves with the basics of a basic septic sewage disposal system.

Today I would like to post a few words about maintaining an existing system. With the help from our friends at Green Environmental Engineering in Wayne, Maine here's today's Q. and A. on septic systems:

How do I maintain my septic system?

Operation and maintenance of a septic system consists of avoiding or minimizing the disposal of materials that can shorten the life of the system, and pumping the septic tank before solids build up too high in the tank.

The following can shorten the system life or impair its performance:

· The use of a garbage disposal is never recommended with a septic system. Although they are permitted by the state code and special design features can be added to help minimize their impact, they will most likely shorten the life of the septic system to some extent.

· Water conservation, including low water use plumbing fixtures, should be used. Septic systems are designed to handle the water needs of an average user and may not function properly if excessive volumes of water are used. In addition, the system will begin to handle less water as it ages. It is prudent to avoid unnecessary water use with a septic system.

· It is recommended that laundry loads be spread out over more than a single day if many loads are done to avoid overloading the system. It is also recommended that liquid rather than powdered laundry detergent be used because powders contain solid material that can settle out in the septic system.

· Avoid dumping any oil, grease, or fat into the septic system. Although the septic tank is effective in trapping these wastes if they solidify in the tank and float to the top, they can quickly clog the soil of the leachfield if they pass through. Restaurants have historically had septic system problems due to grease in their waste.

· Do not dump any toxic materials down the drain. This includes chorine bleach or other cleaners, chemicals, or petroleum products. The septic system depends on living microorganisms to treat the wastewater before it enters the groundwater. Materials that are dumped in toxic quantities can result in contaminated wastewater seeping into the groundwater or even failure of the septic system.

• The use of septic tank additives is not recommended.

Aside from using the system sensibly, the septic tank will need to be pumped out periodically to avoid accumulated material from washing out into the leachfield. The actual need for pumping varies depending upon use, but is generally recommended about every three years. If a garbage grinder is used the tank should be pumped out every year. Septic tank pumping companies may be able recommend a pumping interval after pumping the tank, and may send reminders that pumping is due. Although there is a cost to pump the tank, it is small in comparison to the cost of a replacement leachfield which could result if pumping is neglected.

I will be posting more information in the days and weeks to come about septic systems, but if you just can't wait until the next post and want to know more about septic systems and how they work, just go directly to the Green Environmental Engineering site at http://mainesepticdesign.com/index.htm . They have lots of great information and are happy to share it with you.

If your looking for a great septic system by a lake in Maine (that happens to come attached to a house!) you might try using our Lakefront Locator, where you can search all of the current lakefront properties in the entire state.

At the height of the seller's market in the summer of 2004, I met with a seller, a resident of Florida, who owned a great family compound on one of the largest lakes here in Maine with three separate camps on over five acres. I recommended an asking price of $1.1 mllion. I told him that demand was exceedingly high and supply was very low.

During our discussion he realized that he could save a bunch on capital gains taxes if he would become a Maine resident for two short years. I cautioned him that the market can change abruptly and reminded him that "man plans and God laughs".

He said that owning lakefront property in Maine was a sure thing. I wished him well. Two years later, almost to the day, I met with him again. He had become a Maine resident for the past two years. He had committed to stay in Maine a minimum of six months a year. This was twice as much time in Maine as the three months he formerly stayed. He had to come earlier in the Spring and stay later into the Fall. But now, he was ready to sell the property.

After reviewing the comparables, I told him the market had changed. His property was now, after two years, worth less, about $865,000. He couldn't believe it and, after an hour of us haggling, arrived at an asking price of $925,000. Approximately one year later, after several price reductions, we sold the property for $859,000. He had gone through a lot of bother for nothing. In fact, it cost him money

Now why did I tell you this story? Was the seller foolish? Was he greedy? Perhaps, but I gotta tell you he's one of the smartest, saviest guys I know. He simply overplayed his hand. There was one big variable he could not control. He couldn't control the market.

Right now demand is low and supply is high. This is the perfect time to buy a lakefront home in Maine. Five years from now many of today's buyers, who sat on the sidelines paralyzed with fear during the greatest buyers market in their lifetimes, will be shaking their heads saying " I shoulda, I coulda, if only I woulda".

Since gasoline has gone from $4.14 a gallon to $3.68 a gallon, a reduction of 46 cents a gallon, the real estate business has picked up. Offers are being made and offers are being accepted. Why would a 46 cents a gallon price reduction in the price of gasoline cause longtime lookers to make offers? My take: A little good news goes a long way. Good news made some folks more comfortable about making a buying decision. Fear took a step back.

Some buyers, however, keep looking. Their search now has evolved into a ongoing quest for the perfect house at a discounted price. They deprive themselves and their families a lakefront home in Maine fearing they might buy too soon, not at the bottom of the market.

Years ago I was a sales trainee with a large national company. I was sent to the home office in Dayton, Ohio for sales training. For two weeks a number of sales trainers lectured us about the "dos" and "don'ts" of sales work. The sales trainers, all pretty boys who looked good in three piece suits, had spent a bit of time in the field and presumably had experienced some measure of success.

But occasionally a real sales manager, a company legend and icon, would be brought in from "the field" to tell us how "the cows eat the cabbage". (Don't you love the midwest?) One crusty old sales manager told us, "Fellas (no women sales reps back then), people are motivated more by fear of loss than by expectation of gain."

Diane Monaco and Sandi Potter, our capable, exclusive buyer agents, have told me that some buyers have seen 50 or more houses and have failed to find something they like. What??? When I hear things like that I know that the fear of making a bad decision is clearly at the wheel and that the road for some lakefront buyers will be a long and bumpy one.

I get emailed a lot of information from, and about, the financial markets. Earlier this week I received an email from one service that talked about the recent stock market gyrations and offered an opinion about what was currently driving the market. Here's what it said, in part:

"For now, stocks seem focussed on the last crisis - that of the financial/housing mess - which seems to be pretty much over with. At least, almost every week we get more positive news about it.

Recently, we heard from Toll Brothers, the home building company. While the company's numbers were not brilliant, the Chairman spoke positively about lower cancellation rates and pent up demand for housing. And why should he not? After all, real estate is the one hard asset that has not risen along with commodities. It's due to have a turn. Besides, once the mortgage rate falls below the inflation rate, buying a home is a no-brainer investment.

So it makes sense that housing starts rose last week. More significantly, housing permits - a leading indicator for not just the housing sector but the economy as a whole - climbed for the first time in quite a while. We also heard from many brokers that the worst of the credit crunch has passed."

Well, it seems as if some folks think we may be finding a bottom. That's good news for buyers because the bottom is where, ideally, you want to be buying. It's also good news for sellers because, once the psychology changes about this market, more buyers will start coming into the market, properties will start selling again, and inventories will be reduced.

Have a great - and safe - Memorial Day weekend! Come to Maine and enjoy the fresh air and sunny weather!

Remember, if you'd like to take a look at the entire inventory of Maine lakefront property for sale, use our Lakefront Locator and find a lakefront home of your dreams.