Articles & News
Hoped-for preseason supply is limited
We normally expect that February will bring an influx of newly listed waterfront properties to provide a variety of lake homes to show prospective buyers. Unfortunately, this year’s supply is falling short of potential demand. In fact, newly listed properties are selling within days or weeks of first coming on the market.
This is now a multi-year trend. At the end of this January, there were just 40 residential properties listed in the local MLS for sale on Lake Martin with 15 of those properties under contract in a “due-diligence” status. In January of 2021, we had a similar problem with only 50 properties listed and a similar number under contract.
In January of 2020, pre-COVID, there were 160 residential properties listed in the local MLS. We thought that inventory level was low because, at the rate of sales, there was just a 5.3-month supply of available property. This January, there is just a 1.25-month supply. When you take out the already contracted listings, supply is measure in weeks, not months.
Property values increase due to smaller supply
Basic economics teaches that as supply of a desired product decreases and demand stays the same, prices are likely to increase. That has proven to be true. For the 12 months ending in January of 2022, the average sales price for a single-family waterfront home was $978,446. That was a 20.1% increase over the same time last year when the average price was $814,824. The 2021 price was an 18.7% increase over 2020, when the price stood at $686,996.
Given the even smaller supply this year, we are willing to make a fairly safe bet. Absent some major economic reversal, prices will go up again this year. Early indications for how quickly newly listed properties are selling give us a pretty good glimpse into future.
Sales have out-stripped supply
A few years ago, roughly 50% of the properties listed sold within a 12-month period. We call that the sales conversion rate. Some properties take longer than 12 months to sell. The reason could be that a property comes on too late in the season, the property is overpriced, or it is in poor repair causing a longer sales period.
The last 12 months revealed a statistic that we have not seen before. Local Realtors® reported 378 waterfront residential sales. For that same period, there were 370 properties listed for sale. That is a conversion rate of over 100%.
In short, if a Lake Martin waterfront home is listed anywhere near a reasonable price, it will sell.
What to look for
We expect, due to normal life circumstances, that some folks will reluctantly part with their Lake Martin homes. (We have witnessed many tear-filled decisions to sell. Usually, the grandchildren are shedding the tears.) Those properties will likely be sold quickly, many times without being placed on popular real estate websites.
If you have a desire to find out what is coming on the market as soon as possible, we recommend you have a real estate agent keep an eye out for you. The best agents have the best information network and inventory. Our Realtors® specialize in finding properties for prospective buyers on Lake Martin. Reach out to them today to get the latest news for property values and availability. They will be happy to help you navigate the lake market.