I hope that everyone is managing to keep cool this summer.
Just imagine, you could enjoy a swim in the cool clean waters
up here if you had a place on Lake James. It is hard to find
a lake in North Carolina that is not located in the middle of
nowhere and has water so clear you can see over 15 feet deep!
In case you didn’t figure it out, Lake James meets both
of these categories and more.
Well there is some really big news to announce involving real
estate on Lake James. It is a good news/bad news announcement.
The Good News-
Crescent Resources became very serious about selling property
on Lake James. Having successfully emerged from the Chapter
11 bankruptcy, they are ready to do business on Lake James.
Crescent has cut the prices on all of their existing homesites
by an average of 36%. They have cut some of the more expensive
homesites by more than 50%. Crescent is willing to negotiate
the price even further off the asking price, so be sure to use
a buyer’s agent to help you negotiate the best possible
This turn of events happened about 2 weeks ago and two lots
have already gone under contract. There are several other offers
on the table that Crescent is considering, so I expect the number
of lots under contract to increase over the next week or so.
Cash is king and you might have more negotiating power if that
is what you are going to buy your lot with. If you need a loan
to buy a lot, it can be an arduous but doable task. To illustrate
how upside down the financial world is, consider this scenario.
Carolina Farm Credit will lend money up to 80% of the value
of the lot. However, if the lot appraises for more than $269,000
they will not loan the money. Even if the contract price is
less than $269,000! You would think they would be happy to loan
money on a lot that is being purchased for below its value.
That is not the case in this crazy financial world.
This is also good news for owners all over the lake. With lower
lot prices should come lower tax appraisals. Make sure that
your tax bill comes in lower than the year before. If it doesn’t,
protest it. There is no reason to throw more money at the government.
Owners that do not plan on selling in the near future should
be very pleased with the price cuts and the new valuations of
The Bad News –
Crescent effectively silenced the resale market on Lake James.
Please understand that Crescent is only reacting to the buyer’s
demands. They are not setting or controlling the market. Unless
a property owner is willing to take a significant loss on the
property, they don’t have a very good chance of selling
their lot. Crescent is now pricing homesites around the 1998-1999
price range. So if you purchased before that time period, you
should be able to get back what you put in the lot. If you purchased
during the real estate boom and are thinking of selling, think
twice before you put your property on the market. Buyers have
total access to MLS and Web GIS. They can figure out the true
market value of property. The chances that you find a totally
clueless buyer that is willing to pay close to the old asking
prices is close to nil.
The owners that built houses are in the best shape of those
trying to resale. This is because there are relatively few homes
for sale on all of Lake James. This does not mean that those
owners trying to sell their houses will get what they could
have three years ago. The value of the house hasn’t changed
so much as the value of the land it is built on.
For example: An owner that spent $500,000 on a lot and then
built a home that cost around $700,000 does not have a total
value of $1,200,000. Crescent has cut the value of the lot by
roughly 40%. The home and land’s current value should
be right at $1,000,000. The owner must think in terms of the
buyer. That buyer can go buy a similar lot for $300,000 and
have the same home built on the lot for $700,000 and maybe a
little less. The only drawback for the buyer is the time it
will take to build the home. I think that today’s buyers
are willing to wait an extra 9 months to save $200,000.
If you have a piece of property you are trying to sell, consult
the realtor you have it listed with about what it’s current
value is now that Crescent has change the market.