Articles & News
If You Think the Weather is Hot…!
This “hot” real estate market exceeds all expectations
News flash! People are flocking to Lake Martin and purchasing lakefront homes, condos and homesites at a pace not seen before. If you are a bit surprised by this given the global news, read on; we have some very impressive data for you.
We typically track information based on a rolling 12-month average of key metrics.* Those metrics are sales volume, units sold, inventory-to-sales ratio, sales-price-to-list-price ratio, average price, median price, and current active listings. In each of those categories, the metrics are very robust, except in the area of inventory.
Here is a quick synopsis for residential waterfront property sales (single-family homes, townhomes, and condos). Gross dollar volume is up 39.2% over the same period last year. The number of units sold, 385, is up 26.2% over the same period last year, and the average sales price is up 10.3% over the same period last year.
The inventory level, however, looks as bare as the shelves on the paper aisle at your local grocer. At the time of this writing, just 117 properties were listed in the local MLS. Of that number, 38 were under contract and subject to inspection, appraisal, or some other contingency. At the end of June 2019, the for-sale inventory stood at 283 units. At the current pace of sales, there is just a 3.71-month supply—the lowest level we have seen for Lake Martin.
COVID has spiked sales upward
Since the onset of the COVID-19 period, we have been tracking sales activity expecting a decrease in transactions. In March, we began to track the impact of stay-at-home orders on sales. To get a clear read, we tracked new sales for each month. Rather than look at the volume of closed transactions, we wanted to focus on newly written contracts for residential property, since that gave us a real-time view of how the market was being affected by COVID-19.
We were surprised by the results. March of 2020 held tight with 29 new sales versus 30 in March of 2019. April also hung in there with 30 new sales versus 30 in April of 2019. May is where things took off. May of 2020 had 69 new sales versus only 39 in May of 2019. So, for the first three months, there was an increase of 29 sales in 2020 versus 2019.
How would June hold up with fewer properties to sell? Here is the news flash! In June of 2020, there were 70 new contracts written versus 43 in June of 2019. That is an increase of 56 contracts written in the four-month COVID era compared with the same period in 2019.
Average prices are certainly on the rise. For the closed sales in June of 2020, which would be the first month where sales were most likely to have occurred during the COVID period, the average price for all residential waterfront property was $742,676 versus $590,030 in June 2019. That is a 25.86% increase in average sales price. See properties under contract in June 2020 >
What to look for
Predicting the future is difficult. But one can make an educated guess by understanding the reason for the sales. Here is what buyers are telling us: social distancing is better at the lake. You can sit at your pier, swim, or go for a boat ride and stay a safe distance away from your neighbor. Clearly, those activities are better than staying inside in an urban environment.
Lake Martin is not that far from Birmingham, Montgomery or Auburn, so living at the lake is a fairly short commute. Hearing that people are moving to the lake full time is happening with increasing regularity. (The Ridge, for instance, is only 45 minutes from East Montgomery.)
We also hear, especially in newer developments, that the infrastructure needed to work from the lake is excellent. We hear that property owners are finding how productive you can be at the lake. (A dip in the lake or wetting a hook is a great stress reliever too!)
We also hear that people are learning that living in a small town/rural atmosphere is a welcome relief from the traffic and stress of larger cities. The slower, more relaxed pace is a welcome respite in these difficult times for sure.
All of that is to say the fundamental reasons that people are purchasing will not likely change in the near term, and people are making long-term decisions to get a lake place. The sale of homesites for June was double the level of last June, with the average contract price higher as well. This is what happens when the number of available homes decreases.
New property availability
We are constantly in conversation with owners and other Realtors® about newly listed property. If you want to stay informed about new property coming on the market, send us an email or contact your favorite Lake Martin Realty agent.
* All data above is based on sales data gleaned from the MLS of the Lake Martin Area Association of Realtors. The year-over-year comparisons are for the 12-month periods ending in June of 2019 versus June of 2020.