Articles & News
Waterfront property values soared in 2021
Owners of Lake Martin waterfront property received a healthy bump to their net worth last year. According to sales data gleaned from the Lake Martin Area Association of Realtors® Multiple Listing Service, the increase for the average property owner is great news.
Our analysis is for the 12-month period ending on December 31, 2021, compared with the same period of 2020. For the year, waterfront residential property had an average price increase of 20.5%. The average price of residential property (single-family, condos, and townhomes) increased from $712,270 in 2020 to $858,487 in 2021.
The median price point for residential property, the most reliable metric for the health of the market, increased 26.3% from $593,750 to $750,000. We rely on this metric since the average price can be skewed by more sales of very expensive properties. (Lake Martin set new records for sales of properties over $2,000,000 in 2021.)
Supply constraints drive value increases
For those who follow this report, you will recall we have noted low inventory numbers of “for sale” property over the last year. This lower inventory (390 listed properties in 2021 versus 491 in 2020) with equal demand was the primary driver of the dramatic increase in average sales price.
Sales volume and unit sales for 2020 were the highest ever recorded for Lake Martin. We predicted that, without new inventory, the sales volume would certainly decrease, and it did by just 6.6%. We also predicted that the number of sales would decrease, and it did as well, but by a larger percentage, 22.5%. In 2020, 484 properties sold; in 2021, 375 properties sold. The 100 fewer listed properties created more competition for fewer properties which drove substantially higher sales prices.
We know that the demand for property on Lake Martin stayed constant for 2021, since 375 of the 390 listed properties actually sold (a 96% conversion rate compared to 68% in 2019), and the average days on the market decreased from 137 days in 2020 (a record at the time) to 101 days in 2021.
Trying to predict the market can be a bit tricky. There are a few macro-level headwinds for real estate on a national level. The higher sales prices are leaving some people out of the market, and mortgage interest rates will tend to drive up the cost of ownership.
While those factors do affect the overall sales volume and unit sales, the continued low inventory and the absence of heavy speculative building will continue to give support to property value increases. We think that, with the above headwinds, the rate of increase in 2022 will be lower than that of 2021.
We are confident that 2022 will be a good market for Lake Martin. We know that 2020 and 2021 were the two best real estate sales years for Lake Martin. Our prediction is that 2022 will come in at respectable third place due to low inventory.
We also think that Lake Martin has changed fundamentally. Lake Martin has been, depending on your perspective, discovered or re-discovered. People have come to realize there is a wonderful quality of life here. Over the last 10 to 15 years, new neighborhoods have been established with modern infrastructure and world-class amenities.
One could say that the ultimate driver for future increases in property values is that people have discovered that life is just better at Lake Martin and have decided that it is well worth the price!
For details on market values, new developments, and property availability, please contact one of our Realtors® today.