Articles & News
Annual Market Report
Demand outstripped supply in 2019
The results are in for real estate sales on Lake Martin for 2019, and the numbers are impressive. Year-over-year results indicate an 18% increase in residential waterfront sales volume and a 20.8% increase in the number of residential waterfront transactions. That is great news for the market.
But with the good news, there is a bit of bad news. The buying spree has left the stock of available real estate at an all-time low. A metric that measures the balance between demand and supply is the inventory-to-sales ratio. This metric analyzes how long it would take to exhaust the stock of for-sale property at the current sales pace.
On December 31, 2019, the metric stood at a 4.35-month supply. That means, if no new homes are built or unless someone wants to sell their lake home, we will sell through the available inventory by May 10, 2020. Last year, this number was at a 5.54-month supply, which was then the lowest level for December in our records dating back to 2004.
Fundamentals for high demand still in place
A brief look back helps us understand what is driving the market. Real estate sales have two primary drivers—the economy and interest rates. Since Lake Martin property sales are primarily second homes and therefore a discretionary purchase, the accumulation of wealth is a third factor driving sales.
So, what drove the sales level in 2019 was a much-improved economy with low unemployment, interest rates dropping 1.25% (Wall Street Journal reported on January 20 that the national average for a 30-year “conforming” mortgage was 3.70%), and the stock market climbing over 20%!
We don’t have a crystal ball, but there does not appear to be a strong chance of a recession, lower rates, or a stock market crash on the horizon for 2020. Therefore, demand for Lake Martin real estate is likely to remain high for 2020.
What to look for
Desire for a bigger lake place or a different location on the lake, or having a situation that prevents use of the lake are primary reasons existing lake homes come on the market.
Currently, there are 130 available properties to supply 359 buyers (last year’s sales tally). Typically, those properties come on the market February through April. If you see a new listing on our website, you might need to act fast since there is competition for available properties.
We don’t believe that there will be enough existing property that will come on the market to satisfy demand, so new construction will have to fill the gap. We have new properties being built and new lake lots coming available. If you want to want to know in advance of a public offering for new property, contact us or call one of our Realtors® today.