Articles & News
Inventory remains limited
Inventory for waterfront property on Lake Martin remains limited. At the end of May, the start of the summer season, there were only 56 residential waterfront properties*. Of that number, 15 were under contract leaving just 41 available properties along the 880 miles of Lake Martin shoreline.
That limited supply has had an impact on the total sales performance on the lake. For the 12 months ending on May 31, 2021, there were 513 transactions. That brisk performance cleaned out available supply leaving just 64 available properties at the same time last year. That limited supply restricted sales for the most recent 12-month period, ending on May 31, 2022, to just 330 properties.
There were only 349 properties that came on the market over the last year, compared to 488 properties the prior year. Local Lake Martin agents say that there were just not enough properties on the market to satisfy demand for this past year which hurt the overall market performance.
Low inventory leads to increased values
While listed property inventory plummeted, property values have dramatically increased. The value of waterfront residential and homesites increased 26.3% and 20.8% respectively for the 12 months ending in May compared to the same period the prior year. This is the second year in a row with significant property value increases. Last year, the increase for those categories was 20.7% for residential and 23.8% for lots.
The upper end of the market—properties over $2,000,000—are leading the way. Sales for that price category are up 72.73% for the 12 months ending May 31, 2022. That market segment continues to be very robust with nine properties currently showing as under contract and pending closing in the local MLS.
In addition to those sales, there is a significant number of new lake homes well in excess of $2,000,000 under construction on the lake, especially in Russell Lands neighborhoods. The limited supply of available homes continues to drive custom construction. In just the last year, 118 lake lots were reported sold to the local MLS. Many vacant lots have already turned into construction projects.
What to look for
We are frequently asked what the recent increases in interest rates are doing to the market. Rate increases are recent, so it is difficult to measure with recent sales data. There is little doubt that potential buyers who are relying on financing for a significant portion of the lake property are going to see an increase in the cost of ownership.
For those buyers, they will either lower their price budget or put off their lake purchase until a later date. Given the recent appreciation rates, delaying a purchase may not be the best of the two options.
There are significant numbers of potential owners, with cash, that are still in the market for the limited number of properties. So, we do not think that the gross dollar volume of sales will be affected by higher rates in the short term. Since most recent financed sales were on low-interest, fixed-rate mortgage products, current owners will not be affected by recent rate increases.
We are still seeing attractive mortgage rates, on a historic level, available to potential owners. Lenders for newly developed areas, like The Heritage, have put together very attractive options for those hoping to acquire a premium lake property.
We do not think there will be a significant increase in available inventory for three reasons. The first is that the development of lakefront property is a long-lead-time process needed to add available lots. The second is that builders are busy filling the huge demand for custom homes restraining their ability to build “for sale” homes. Finally, existing property owners love their lake homes, and even with very affordable financing in place, there is no pressure to sell.
If you want to find out what is available on the lake, or what is on the horizon, give on of our Realtors® a call. They are here to help.
*Residential properties are defined in the local MLS as the combination of single-family detached, townhomes, and condominiums. At the end of May, there were 46 for sale homes and 10 condominiums/townhomes on the market.