Articles & News
Property values maintain firm foothold
The Lake Martin real estate market continues to surprise to the upside in spite of historic interest rate increases by the Federal Reserve. Historically, increasing interest rates tend to put the brakes on real estate markets, but given the most recent market statistics property, sales prices for waterfront property outperform expectations.*
If you had told us eighteen months ago that interest rates would increase from 3% to nearly 8%, we would have predicted that the real estate market would slow significantly and that price appreciation would drop into the low single digits. Other market conditions, such as the lack of “for sale” inventory did adversely affect the overall number of sales but did, at the same time, keep upward pressure on property values.
For the purposes of this article, we have pulled year-over-year sales data for the 12-month period from October 1, 2022, to September 30, 2023. Comparisons made above are for the same 12-month period the year prior, that is October 1, 2021, to September 30, 2023. We believe that this year-over-year comparison aids us in seeing overall trends.
Residential sales breakdown
The data, first of all, tells us that lower inventory has, over the last year, reduced the number of property sales. The last twelve months there were 247 residential waterfront transactions compared to 303 transactions for the comparable 12-month period in 2022. Low inventory, coupled with steady demand, drove average sales prices up to $1,144,426 or a 14.4% increase over last year’s average.
Many markets around the country have notched some price reductions on a month-to-month basis, but the report at the end of September showed that the average sales price increased 1% over the August 2023 report (that is a 12% annualized pace). This one month increase in property values for Lake Martin property is a long-running trend beginning in September of 2019 when the average stood at 585,782. The average price since then has increased 95%.
Impact on newly listed property
One of the areas that we look at is what impact, if any, the current sales price average has on property owners who are offering their property for sale. We have said for years that properly priced property will sell in this market fairly quickly given the demand. Looking for big increases in inventory is an indicator that asking prices may be getting a bit high.
Inventory of “for sale” condos has increased year-over-year to 25 units from 7 units, whereas single-family homes inventory has decreased from 76 units to the current 72 units. Since those are not huge increases (condo inventory went from nil to just a few), that does not necessarily indicate over pricing per se, but it does suggest a deeper dive into the numbers.
A deeper analysis indicates that the current median asking price for a Lake Martin condo is $599,000 and that the actual median selling price for the last twelve months was $515,000. That seems to indicate that either a nicer collection of condos is available for sale or that sellers are anticipating a continued appreciation of property values. Given the median sales price for condos increased 26.8% over last year, it is reasonable to expect higher asking prices.
A similar increase in the median asking price for single-family homes exists, as well. The current median asking price is $1,195,000 and the median sales price for the last 12-month period was $1,026,000. These numbers tell us that sellers, at least, are still bullish on the market. Given that the median selling price increased 12.1% over last year, it is reasonable to expect sellers to be bullish.
What to look for
Since so many people purchased property using low, fixed-rate mortgage products to acquire their lake property prior to 2022, there is no reason to expect people to sell and buy a different lake property, adding supply. If supply stays constrained and rates decrease slightly, we expect demand to actually increase since many people who desire lower rates will come into the market.
We think the data shows us a stable lake market. We also think the market is healthy and the fundamentals indicate a continuation of that health. This is good news for Lake Martin property owners.
If you want to stay abreast of what is available or new to the market, please reach out to one of our Realtors®. They are experts in the Lake Martin market.
*Every month we utilize market data from actual sales transactions reported to the Lake Martin Area Association of Realtors® Multiple Listing Service.