In July we took a week-long vacation on Norway Lake near Willmar. As mentioned then, our dream is to someday own a cabin of our own and spend the entire summer there with the kids, working as necessary from remote. According to this StarTribune article, plenty of other people are looking to realize that same dream due to the very low real estate prices for second homes.
From the article:
“People really can have their dream of a lake property again,” said Mike Dale, an Edina Realty manager in western Wisconsin. “And they’re capable of buying properties on nicer lakes and in nicer areas than they could in the past.”
Sales of lower-priced waterfront properties are particularly strong, signaling a return of confidence among more working-class buyers who not long ago had halted all discretionary spending.
Dale said that in 2006 there 21 sales priced below $100,000; this year there were 58. In, 2006 there were 115 sales from $300,000 to $400,000, but only 53 this year.
While several StarTribune commenters take great issue with this article with one calling it, “real estate industry propaganda,” the numbers are spot on according to Lazy Lightning‘s own analysis of active waterfront home listings from minnesotaloghomes.com. While not comparing apples to apples being that these are simply for-sale listings, there are quite a few homes for sale, even after throwing out the one at $1, under $100,000:
- Out of 323 total listings pulled from the website (please note this is one source of information and are listings, not sale prices, but updates once a day and will be interesting to see in a few weeks what data are compiled), 268 were priced at $200,000 or less. Of those listings there were 61 priced under $100,000 with 12 under $50,000!
With a few of the StarTribune commenters noting that these prices are great for those who can afford it, I have to wonder how many of those individuals own a $25,000+ second car they probably don’t need on a 7 year loan and have $20,000+ in credit card debt they could eliminate if they worked at it? While second homes going for $400,000+ are probably out of the range of many, a second mortgage on a home that’s less than $100,000 wouldn’t be all that crazy when compared to a car loan.
While I won’t disagree the article may be real estate industry propaganda, the numbers don’t lie. The prices of second homes are low and may go up as the market recovers. However, it’s unlikely they’ll be the first market to do so leaving open the possibility that more and more people will be able to afford their dream.
Do you think this STrib article was fluff for the real estate industry or do you believe the numbers don’t lie? Are there people out there complaining they cannot afford to live who have outstretched themselves, unnecessarily, with expensive cars (sometimes more than two), mountains of credit card debt, etc when they really could be in better financial shape had they decided not to? Are you interested in seeing more data come out of the scripts I have running on this topic? Whatever you have to say about this one go ahead and comment on as I’d love to hear your thoughts.