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Real Estate Market Report
One month into the COVID-19 era…
In our last monthly market report, we reviewed the “pre-Coronavirus” market conditions. Our desire was to put a stake in the ground for market data so we could compare what effect shuttering the economy would have on Lake Martin waterfront property sales. View the previous report >
Normally, we prefer to take a look at 12-month rolling average in our reports because it is the best predictor of trends. The year-over-year approach is less volatile than the month-versus-month comparisons since one month’s results might be caused by temporary situations, such as weather patterns and lake water levels.
We are breaking with our standard reporting practice since we are all too aware of the COVID-19 external variable. The government’s call for social distancing began in late February and intensified through March. Stock market watchers can attest to the impact the virus has had on that market in March.
Results are better than expectations
Many Lake Martin real estate professionals have either heard of or experienced cancelled or delayed transactions. Recent loses in stock valuation, turmoil in the mortgage market, social distancing, and other factors could lead one to believe that the market faced some serious headwinds.
But the worst fears were not realized. In fact, March sales were surprisingly strong. Closed sales for March of 2019, which was a good month, tallied 31 total waterfront transactions, totaling $18,185,766 in volume. The average sales price in 2019 was $586,674.
This March, the first month of the COVID-19 era, the local MLS reported the same number of closed waterfront sales, 31, as in March of 2019. Total sales volume for March of 2020 was higher at $21,449,900, or a 19.95% increase. Average price for sales in 2020 climbed to $691,932. For the most part, the sales that closed in March were already on the books. Few sales were cancelled due to the virus. Rather than cancel, some closings were rescheduled for April or May.
Since March closings were written “pre-virus,” the real measure of real estate sales would be for new contracts written after March 1, 2020. Would social distancing and the halt to all but non-essential activities slow or stop sales? The answer, at least for March, is that it did not have a huge impact on sales.
For March of 2019, the local MLS reported 25 properties going under contract (new sales). Total list price for those properties was $13,539,050, with an average list price of $541,562. In March of 2020, the local MLS reported 24 properties going under contract, with a total list price of $15,652,524 and an average list price of $652,188. View the detailed sales list > (Please note: These are the properties that were reported as new transactions in the month of March to the Lake Martin Area Association of Realtors® MLS.)
Since many of those properties have not closed, we cannot yet report average sales price for transactions. We will be watching that in the months ahead. What we can report are the sales handled by our Realtors®, and so far, we do not see any change in the sales-price-to-list-price ratio. (Year-over-year sales-price-to-list-price ratio is 95.1%)
What to look for
We believe, like many, that this is a temporary situation. Instead of “flattening the virus curve” in fifteen days, it appears that social isolation will take months. An interesting event supporting the market has been the number of people that chose to come to the lake to practice “social distancing.”
In the 2008 financial crisis, inventory of lake property listed for sale ballooned to nearly a five-year supply. This year, rather than an increase in supply, people are taking their lake homes off the market and moving to the lake from their urban homes.
If March sales numbers are what we can expect for the immediate future, that would be great news. April, however, brought lower inventory, the Governor’s “stay at home” order, and increased calls for social distancing. These factors will likely reduce property viewing opportunities. April, although it has started off pretty well, will be worth watching. We will dutifully report April results in mid-May. Complete the form to the right to subscribe and stay informed.
To stay abreast of the Lake Martin real estate market, we recommend that you stay in touch with one of our Realtors®. Meet our team >