Articles & News
Reduced Inventory is “Tapping the Brakes” on Residential Sales Volume
By Benjamin Arnberg
Sales data for the 12-month period ending on June 30, 2021, reveal that Lake Martin waterfront property remains in high demand at record levels, even as sales volume began to plateau. In May, the sales volume for Single Family Detached homes reached a 12-month peak of 511 units sold. For June, the sales volume for the prior 12-month period was 495 units sold. Do not let a first glance fool you, though; the 12-month volume in June 2020 was 388 units sold. Buyer interest remains high, even as home prices rose over the past year. The view from this plateau is more expansive than it has ever been.
The June report indicates that reduced inventory accounts for the slight reduction in units sold. Our team reviewed available properties in MLS as of Thursday, July 22 and found 57 Single Family Detached listings. Of that group, 12 units are under contract and nine units are under construction. That leaves 36 units available for immediate purchase and use. When one excludes the 10 units (available for immediate purchase and use) priced above $2 million, there were 26 units available. Compared to July 2020, inventory is 42.9% lower (from 101 Single Family Detached units). Yet demand has not abated, and home values have appreciated at astonishing rates. The average sales price for Single Family Detached units is up 12.8%, and the median sales price is 14.2% higher (an appreciation of 5-6% per year is more usual). For the first time, three properties are listed above the $7 million price point, and one unit sold above the $7 million price point in June.
With reduced inventory of Single Family Detached units, lot sales skyrocketed. Lot sales are up 230.9% over last year, with average sales price up 34%. Buyers facing a competitive market for move-in ready units should consider waterfront lots, which offer the opportunity to build the custom home of their dreams. Russell Lands released additional lots in The Willows in May and in The Ridge in July. To date, one-third of the lots in Phase 6 of The Ridge sold (5 of 15; Phase 6 being the final phase of The Ridge), while The Willows had only nine remaining lots.
Sellers can remain pleased with the appreciation of their property value and the abundance of willing Buyers. However, sellers should be cautious of over-pricing their property. A hot market may yield high demand, but the demand will fluctuate as the summer season draws to a close. Since buyers have shown interest in buying lots and building custom homes, sellers should consider investing in property upgrades and renovations to appeal to buyers who prefer a move-in ready property (but who might also be willing to wait on a custom home).
Despite conditions favorable to sellers, low inventory indicates that current owners want to keep their homes anyway. People invest here for the long-term; families enjoy homes for generations. This should encourage buyers, since Lake Martin is a place they will love, even if they have to wait for just the right home.