Articles & News
Our annual review of the real estate market
We have another year in the books, and the numbers are tabulated and ready for review. As usual for January, we want to share key metrics on the Lake Martin real estate market for the past year, 2023, as well as give our predictions for next year.
Our methodology is to pull data from the Lake Martin Area Association of Realtors’ MLS for the past 12-month period and compare that data to the previous 12-month period. The data for the 12-month period ending on December 31, 2023, is the basis for the data below.
Key numbers show a very healthy market
The waterfront real estate market has settled into a stable rhythm over the past two years (2022-2023) following the record-setting “COVID” years of 2020 and 2021. (See chart for Lake Martin 12-month Rolling Sales below.) The sales for those record years were driven by an increased desire to own lake property, a large supply of available lake homes (at least for 2020), and 3% fixed-rate mortgages. The demand for those two years reduced inventory to record-low levels that still affect our market today.
In 2022, we began the year with virtually no inventory. There were just 31 waterfront residential properties on the market on January 1, 2022, versus 130 properties available on January 1, 2020. The chart below shows the waterfront inventory levels dating back to 2013. The pink line shows the total inventory, and the blue line shows the inventory-to-sales ratio, or months’ supply. In a normal market, like that in 2019, there is a gap between those lines, indicating increased marketing time or a failed attempt to sell. This chart indicates persistently low inventory—just 69 properties at year end.
This lower inventory, coupled with increased interest rates, has certainly slowed the market compared to the peak years of 2020-2021, but in 2023, we noted that the gross sales volume increased again. While the gross dollar volume for 2022 was 12.4% less than that in 2021, sales volume rose again slightly in 2023, from $283,860,053 to $286,239,107.
That trend began in August with several significant months’ sales results driven by slightly higher demand and an improving-rate environment. While sales volume decreased during the last two years compared to the COVID peak, the dollar volume is much higher than what we considered to be a normal market in the 2016 through 2019 period.
Low inventory, coupled with still-strong demand, drove a 13.8% increase in residential property values year-over-year. The chart below shows the rolling average price for residential waterfront property dating back to January of 2018. As you can see in the chart, the increase in property values has virtually doubled (Residential property sales include single-family homes, condominiums, and townhomes. The average price for single-family has risen 10.5% year-over-year to $1,339,469.).
Some areas of the market are more desired than others, driving increases in the overall market. Residential properties in Russell Lands’ communities are the most valuable on the lake and have the highest level of appreciation, 152% higher than in other areas of the lake.
The chart below shows the rolling average price for single-family homes sold. The red line is the total market, including Russell Lands’ neighborhoods, the blue line indicates prices in Russell Lands’ neighborhoods, and the green line shows values outside of our neighborhoods. Increased values are driven by robust amenities, protective covenants, and controlled development.
A new property classification
The numbers above do not include results for a new property type that has emerged on the lake. Increased prices for waterfront, coupled with a smaller supply. have opened the door to a new property classification. We call that classification “water-access properties.” These are single-family homes that have deeded or homeowner association access to the lake and/or docks.
This property type offers potential owners a new option, usually in competition with condominiums, to own properties in a lake community. Sales for this property type exceeded the gross dollar volume of condominiums for the second year in a row. For 2023, the sales volume for water-access properties was 62 units and $28,697,093 in sales volume. Sales volume for condominiums, in comparison, was 46 units and $23,703,200 in sales volume.
What to look for
We think that 2024 is likely to be slightly better than 2023. We think that there will be a slightly higher level of available property on the market this year. That increase will give potential property owners a few more opportunities to find a lake place. We do not think inventory will grow dramatically, but for those who have had to wait two or three years to find a property, this should be your year.
We also expect that property values will continue to grow but at a slower rate. Historically, real estate appreciates in the single-digit range. Stepping out on a limb, we predict an appreciation rate in the 7-8% range.
We do expect, because of the increased supply and improving interest rates, that the total number of sales and sales volume will increase over that in 2023. We also expect that the sales of water-access properties will increase, because developers are providing better amenities, better water access, and better home designs.
Other new amenities and shopping will be coming online in the near future. The Benjamin Lake Club in The Heritage and the Publix grocery store in Alexander City will make coming to the lake more fun and convenient. Winter and spring rainfalls are sure to fill the lake in time for the summer. We can’t wait to jump in!
If you have specific questions regarding the market or availability of for-sale property, reach out to one of our Realtors®. They will be happy to help you navigate the lake market.