Articles & News
Steady as she goes
When a captain is happy with a vessel’s course and speed, the command is “steady as she goes.” Given the recent real estate data that we have pulled from the local MLS, we think that lake property owners would give the same guidance. On reviewing the data, we think that the market is headed in the right direction and at the right speed.
We pull data from the Lake Martin Area Association of Realtors® Multiple Listing Service each month. Each report covers sales and listing activities for a full 12-month period, and we compare that period with the same period from the prior year. For this report, we have pulled sales data for the 12 months ending on August 31, 2022.
For months, we have been reporting that the lack of available inventory has been a drag on overall sales volume. Persistent low inventory levels have lowered the number of unit sales and gross dollar volume for the market. At one point this year, the total sales volume for residential waterfront had declined by 18.7%. This occurred in May when the total number of listings taken was 28% lower than in May 2021. As the old grocer said, “You can’t sell from an empty shelf.”
The most recent report shows an improvement in the sales volume. While still persistent, low inventory remains a drag on sales, but the decline in sales volume is less severe at just 10.1%. We think listing inventory and demand are becoming balanced. Over the last year, 350 properties were listed, and 309 properties were sold. That left a slightly higher level of inventory for potential buyers to consider for purchase.
What has been positive for property owners is that the low inventory levels, with sustained high demand, have resulted in higher average sales prices over the last year. The average price for all waterfront residential property sold over the last 12 months increased 27.1% over the same period the previous year. Lake Martin waterfront has been climbing for the past several years, and continued low inventory levels have served as a strong price support for property owners.
What is on the horizon
While inventory is improving, current available inventory is still low with just 85 listed properties (16 of those are under contract in due-diligence status). Historically, for a good balance, we would expect inventory to be roughly half of unit sales rate or 160 units. Inventory seems to be headed in a direction which would support both continued healthy appreciation and expanded ownership opportunities.
Demand continues to be strong for high quality lakefront property which brings significant investment to the market. The recent release of waterfront homesites in The Heritage, a fully amenitized community with a golf course and lake club, netted 47 sales out of 52 available properties in just two weeks.
A further indication that the upper end of the residential market is in demand is to look at the sales levels for price segments. For properties in the $1,500,000 to $2,000,000 range, the sales volume increased 17.72 %, and the sales volume for the $2,000,000 and up category increased 146.47% year over year.
What fuels the upper end of the market is the continued addition of amenities like expanded marinas, dining, shopping and city services (especially in the Alexander City area). Those additions have improved the quality of life for Lake Martin. With new amenities being announced, like the Coore & Crenshaw golf course in The Heritage, Fanny Goldmine Diner at Russell Crossroads, and the Publix grocery store coming to Alexander City, we think many more people will want a place on Lake Martin.
Some have asked if increased interest rates make a dramatic difference in sales volumes. After nearly six months of increased rates, we have not noticed an appreciable effect on Lake Martin sales values. We think that value will continue to grow due to continued low inventory and steady demand for increased amenities.
We are being patient with additions of new property. Virtually all of our lot sales are for custom construction with few speculative “for sale” homes. With many recent owners discovering that lake life is very special, few are willing to list their lake homes, especially when they have financed at very attractive fixed rates.
We think that enough supply will be available in the future to match current demand. That is why we think there is smooth sailing ahead! “Steady as she goes” seems to be the right guidance.
If you want to stay abreast of the market and what’s new, please reach out to one of our Realtors® today.