Lake Home Prices – Through the ROOF!!!

My wife and I have been looking for a lake home for over 2 years. We set a max $$$ we wanted to spend at the time. Eventually, we determined we had to raise our max $$$. But, then with COVID, the price of lake homes also raised. So we raised our max $$$ even more. We have found a few lake homes of great interest, but any lake home priced within reason, would sell in under a week from listing date. So you have to be absolutely ready to commit, and be willing to offer more than asking price, or you have no chance.

In the past week, we looked at 2 lake homes, both almost exactly what we wanted, but the asking price is WAY OUT OF SITE. The one we were really interested in was listed at close to $200k over tax assessed value. Tax assessed value is not a good gauge, but $200k over is unbelievable on a recently built lake home. Even at that asking price, it was only about $50k over what we would have jumped as it, and they had a list of furniture and accessories they would include at additional price. We figured make a offer, and ask for the furniture and accessories be included in the price. Well, in 1 day, they received full asking price offers, and more, 1 day after listing. It was nice, it was almost perfect for us, but WOW those offers are extremely HIGH.

Have’s and have not’s, I guess?!?!

I went back and looked as cabins we looked at a couple years ago, what the selling prices were, and kick myself for not buying then. Similar cabins now are easily 50% higher priced.

If anyone knows of a lake home for sale, by owner, or other that may not be advertised, would love a heads up!!!

Its just a crazy market right now.

Where are you looking? MN or WI?

We expanded our search to anywhere North of the Twin Cities, MN, and all of Northern WI. Wife would love to stay within 3 hours of the Twin Cities, but that is negotiable depending on the lake home.

I don’t think it’s haves and have nots as much as it is the fact that the world has changed as a result of COVID.

A whole bunch of people and their employers out there have discovered that they can effectively work remotely. Some have even been told they won’t be returning to the office period or that the office will be downsized and it’s now just drop in and meeting space.

So a LOT of people and suddenly reconsidering where they want to live or spend a lot of time now that they are not chained to an urban area because of their jobs. They are either moving out entirely or they now don’t have to be at the office M-F so a cabin is a lot more usable because they can work from there.

The competition just got a lot greater for lake properties. Add in relatively low interest rates and it’s just bad luck/timing.

Grouse

hopefully this speeds up the high speed internet options “up north” as this is a key requirement for alot of buyers…I’m hoping 5G takes off and the requirement for physical data lines run to properties is no longer needed.

TheFamousGrouse wrote:

A whole bunch of people and their employers out there have discovered that they can effectively work remotely. Some have even been told they won’t be returning to the office period or that the office will be downsized and it’s now just drop in and meeting space.

So a LOT of people and suddenly reconsidering where they want to live or spend a lot of time now that they are not chained to an urban area because of their jobs. They are either moving out entirely or they now don’t have to be at the office M-F so a cabin is a lot more usable because they can work from there.

The competition just got a lot greater for lake properties. Add in relatively low interest rates and it’s just bad luck/timing.

Exactly, the world has changed and borrowing money is cheap. My wife and I are going to learn how much we will actually be in our offices in the cities. Doesn’t sound like we will really need to be there much or hardly at all. So if we don’t need to be within 30 minutes, where should we live? Should we completely sell our place in the cities? Should we keep an apartment in the cities and the main house on a lake? Other?

The rent free parents lake place was nice for this year but it came with the parents for the summer. Coming up we’re going to be having these very conversations.

Starlink….

JoeMX1825 wrote:

hopefully this speeds up the high speed internet options “up north” as this is a key requirement for alot of buyers…I’m hoping 5G takes off and the requirement for physical data lines run to properties is no longer needed.

I am selfishly hoping for just the opposite (but realize it is not reality). I’d prefer to be as disconnected and isolated as possible when “up north.” I don’t want or need streaming videos, wireless connectivity, etc. when I am somewhere to enjoy the remoteness or outdoors.

…now get off my lawn

Not surprised. There aren’t many places for sale on the lake we have our place on (Cumberland WI). One place just sold within the past month. I would have guessed just a bit north of 500K. It was a pretty nice place. Dang near crapped when I saw it was listed for 670K. The for sale sign is gone, so I assume it sold.

Best of luck. I’m pretty familiar with the lakes around this area. Feel free to IM me if you have any questions about the lakes. Some are better than others.

It is not just lake homes that are crazy.
We sold our house last fall and have to be out by April 30th. Moving to the cabin for the summer while the new house is being built. Have builder picked and working out the details currently. 2 1/2 weeks ago looked at a house that came on the market that checked 98% of what we are building. We could move from current house to it with not having to store anything, less decisions on fixtures, house finish items, waiting, etc.
Well long story short we didn’t get it. Asking price was 150k over assessment. Our offer was a little over 17k above asking price with no contingencies. A cash offer. Realtor told us we were not even close. Real estate market is NUTS right now.

JoeMX1825 wrote:

hopefully this speeds up the high speed internet options “up north” as this is a key requirement for alot of buyers…I’m hoping 5G takes off and the requirement for physical data lines run to properties is no longer needed.

Starlink will be the best option for most upnorth high-speed internet.

Our plan is to move up north within a few years. NW Wis. We have a cabin now which had been our lifelong dream and is everything we had hoped for as far as having a place on the water and being up north enjoying all the fun it offers. However we are not wealthy people so it is small and old. Not a permanent dwelling even though I have winterized it and we spend nearly every weekend there. It will need to be demo’d and replaced if we are to move to that lot. The cost to rebuild with an existing lot is crazy right now. Cost will eventually decide if we rebuild or sell and buy something existing elsewhere.

munchy wrote:

tarlink will be the best option for most upnorth high-speed internet.

Two IT engineers who work for me live way out of town and are on Starlink, very functional for them.

Money is cheap right now and we are heading into a high inflationary period. Lots of money available brings about investors and demand spikes with low inventory. At some point a decline will happen. When, who knows, but we will catch up at some point and a decrease in market will happen. Covid accelerated the market with not just regular people, but with investors seeing opportunity with the VRBO’s those investors are buying as many places as possible due to demand and cheap money.

Ryan,

We have had several realtors tell us that any lake property $350 and under are automatically snapped up by VRBO/AirBNB investors. So you are right about the lower priced properties, but not sure if they are moving up to more expensive properties now?!?

munchy wrote:

<div class=”d4p-bbt-quote-title”>JoeMX1825 wrote:</div>
hopefully this speeds up the high speed internet options “up north” as this is a key requirement for alot of buyers…I’m hoping 5G takes off and the requirement for physical data lines run to properties is no longer needed.

Starlink will be the best option for most upnorth high-speed internet.

It’s an option for sure, thankfully i’m still a few years away from needing it so hopefully the technology matures and other options become available to chose from.

We are lucky enough to live on a lake year round in a modest rambler around 1900 total square ft for about 4 years, very lucky.

I bet we get 2-3 mailings per month asking if we are selling from realtors and people. Not mass mailings, just letters. Unreal demand.

PS. we’re NOT selling

Another thing to keep in mind is the property tax.
When you buy a Cabin the county will up your taxes to the sale amount or more next time they are due.
At least that’s what they did for me.

and $350K in any Good Lakes Country would be a fixer upper.

toddrun wrote:

Have’s and have not’s, I guess?!?!

I went back and looked as cabins we looked at a couple years ago, what the selling prices were, and kick myself for not buying then. Similar cabins now are easily 50% higher priced.

If anyone knows of a lake home for sale, by owner, or other that may not be advertised, would love a heads up!!!

Todd,
Be honest with yourself. If you had bought 2 years ago, would you be willing to sell now for the same amount?

Real estate is like many other items, it is worth what someone is willing to pay for it, not what someone thinks it should be worth. Either take a risk and get onboard, or be patient and wait for the next crash.

HRG

HRG,

Oh we are being honest with ourselves, and when the right one comes up, we are fully committed to pay the price required. I was just stating what has happened in the past 2 years to the market. And I was putting a plug out there in case anyone knows of any lake property for sale by owner, that I wouldn’t have access to otherwise.

I bought a boat used last February, and I did a search today on that exact boat, and there are 2 in the area for sale almost exactly the same as the one I bought. One is $10k more than I paid, the other is $13k more. So I fully understand both sides.

suzuki wrote:

Our plan is to move up north within a few years. NW Wis. We have a cabin now which had been our lifelong dream and is everything we had hoped for as far as having a place on the water and being up north enjoying all the fun it offers. However we are not wealthy people so it is small and old. Not a permanent dwelling even though I have winterized it and we spend nearly every weekend there. It will need to be demo’d and replaced if we are to move to that lot. The cost to rebuild with an existing lot is crazy right now. Cost will eventually decide if we rebuild or sell and buy something existing elsewhere.

Sounds like our stories are nearly identical. We bought a lake lot with an old small cabin and old small garage on a really nice level sandy shoreline lot 4 years ago just outside of Stone Lake. We basically just paid for the lot since there was little value in the cabin and garage. We spent a little money getting the cabin to a point it was fine to use, but knew it would have to be scrapped at some point when moving on to something bigger and more permanent. Fast forward a few years and I’m ready to be living up there full time about 2 years ago……. We go up every weekend regardless of the season; there’s always fun stuff to do. We tried working with one builder up there and they wanted $540,000 for a 1500 sq ft ranch built on a slab! We’re now working with another builder that seems to be much more reasonable, but prices are high regardless. Anxiously awaiting the estimate and hoping the first number is a 3 or 4….

Crazy times up there right now! We had a manufactured home 3 doors down that sold in the fall for $650,000. The one next door was a raised ranch built in the 60’s and went for $510,000.

Toddrun,
I was in your shoes 4 years ago. I thought when you wanted to buy a cabin you just drove up north to where you wanted to be and there was going to be cabins everywhere. Well, 2 years later after looking at 20 places or so, we found one that fit our needs. There’s alot of dumps out there and places that are grossly misrepresented.
Make a list of wants and needs.

We ended up raising our bottom line, got a place we love and never looked back.

Good luck, something will come up.

You didn’t mention this in your original post, but have you been pre-approved for a cabin loan? (Second home that is not homesteaded)

If not, start there. You may also be shocked at the down payment needed. Many (most?) banks will not allow you to take a second mortgage on your current property to make the down payment. And 20% is just getting your foot in the door. You are not going to get 3% to 4% loans on a cabin.

-J.

Jon Jordan wrote:

You didn’t mention this in your original post, but have you been pre-approved for a cabin loan? (Second home that is not homesteaded)

If not, start there. You may also be shocked at the down payment needed. Many (most?) banks will not allow you to take a second mortgage on your current property to make the down payment. And 20% is just getting your foot in the door. You are not going to get 3% to 4% loans on a cabin.

-J.

That wasn’t the case for me.
There was certain criteria, year round v seasonal. Are you on a paved road.
My cabin ended up financed just like my home. Conventional 20% down, market rate interest.
There are a bunch of ways to finance.

I also ended up using my Realtor from down here, let’s just say the ones I dealt with up north weren’t the “go getter” type.

Eelpoutguy, – I hope you are right, we are losing our faith. We were told by our realtor in the Brainerd area that her customers average 3 year between starting to look and purchasing. We are nearing that average, so maybe this is the year.

Jon Jordan – yeah, we have been through all the banking stuff, we are set if something comes up. Basically, we know we need to make an offer for sure within a week of listing, but recent sales tell us within 2 days is more realistic, and that the offer has to be over the asking price. How much over, that is the guess. We were told to put in a contingency on the offer, offer a fair price contingent that if overbid we would pay $1k over highest bid up to a max. Seems hokey, but if it gets a lake property purchased, well, then it works.

I happened upon a very nice lake shore lot, reasonably prices, and went down the road of looking to build also. Basic specs – 2500 sq/ft finished, 3br, 3ba, chalet style, with 2 car attached garage and 40×50 shed with cement floor, using medium grade materials, not top of the line but not budget. 5 bids, all about the same – $800k – $900k. STICKER SHOCK!!!!

Eelpoutguy wrote:

and $350K in any Good Lakes Country would be a fixer upper.

It’s been a few years since I looked at lakefront, so I thought this was hyperbole….turns out you are correct! And even then it’s probably going to be an elevated lot with stairs down to the lake

Toddrun –
If you are like me, I knew most every cabin that met my criteria, looked at it and didn’t like something. So I would check the “hotlist” every morning because I knew our place was not on the market yet. I was ready to leave at the drop of a hat when it came up on as a listing.
Well one came up that the FW liked (i didn’t) but the listing agent said he had another coming on line a day after we were going to be up there. He sent us the info and I told him to get us in to look at that one no matter what it takes.
He did, we walked into the front door and said “this is the place” the rest is history.

Best of luck in your search. I realized long ago I either could retire someday or own a cabin but I couldn’t do both. I ended up buying a small rambler with detached garage, barn on 4 acres for less then a lot would cost me on Rainy. I can get a seasonal dock with electric for around $400-$500 or I can tow the boat and launch it. Not what I would do in a perfect world but it will work until the Powerball rolls around.

For someone not in this situation, how much are monthly payments and taxes on a 500k “cabin”?

Use to work for a guy who had a $1.2 million dollar “cabin”. Sorry friends, that ain’t a cabin by any definition.