Articles & News
Demand Outstrips Supply
Waterfront lot inventory needs replenishment
Lake Martin has 880 miles of shoreline. Approximately one-half of that shoreline is undeveloped. With that much raw land, you would think that there would be plenty of “ready to build” waterfront lot inventory. As of May 4, 2022, there were just 40 waterfront lots listed in the local Multiple Listing Service.
Of that collection, roughly half of the properties are what agents would describe as “back of slough” and off the beaten path. The demand for this type of homesite is low, most having been on the market since last year. Several have been on the market more than a year and one for 1,095 days.
Over the last two years (from April 1, 2020 to March 31, 2022), 289 waterfront lots have sold on Lake Martin with a gross sales volume of $117,987,434. Low supply has caused an increase in the average lot sales price by 16.4% since a year ago.
Constraints on supply
One might think that a new supply of homesites can easily be added. It seems simple to put in a new road. However, developing waterfront lots on Lake Martin has unique challenges. People love that Lake Martin is in in a peaceful, rural location. That out-of-the-way location means that infrastructure (water, power, sewer, and fiber) is a long distance from the lake and time consuming and expensive to install.
Given the fact that the land is adjacent to Lake Martin, which has been designated as a “Treasured Alabama Lake,” it makes sense that additional care is required by responsible developers during the planning and construction phases. Because the topography around the lake has more hills, designing a road network for a new development becomes a challenge for civil engineers and road builders.
So, when you consider the factors above, developers have a long lead time designing, planning for infrastructure, and permitting before they may begin a road building project that can provide fresh inventory of lots.
Largest developers on the lake show care and patience
The two largest landowners on Lake Martin are Alabama Power Company and Russell Lands, Inc. Both companies have impressive land holdings on the lake far surpassing all other landowners combined. In the case of Alabama Power, not all of their vacant land can be developed. Their operating license designates significant portions of their land holdings as “Natural/Undeveloped.” This designation prevents this land from being developed in the near future.
In the case of Russell Lands, our policy is to be patient and careful with development of our property. The history of the company has prioritized the protection of the land and the lake. We have also found that amenities like The Ridge Marina, Russell Crossroads, and Willow Point Golf & Country Club are significant investments that have to be built to support quality of life at Lake Martin.
As you can see on the chart below, waterfront lots sales price in Russell Lands neighborhoods are higher than the rest of the market. On the chart, the average price for a lot on the lake is in red. That includes all sales, including in our neighborhoods. The average price for waterfront lots outside of a Russell neighborhood is in green. The average price for a lot in a Russell neighborhood is in blue and is nearly twice the value of the rest of the lake. Clearly, careful, patient delivery of homesites with quality amenities has a positive effect on property values.
Looking to the future
Alabama Power Company has increased its development activity over the last several years, and we expect that they will be adding new lakefront inventory at some point in the near future. They are also patient and responsible developers, and we look forward to what they may announce in the future.
For us here at Russell Lands, we have nearly completed the sales activity in The Willows, Willow Glynn and The Ridge. That led us to start planning our next development, The Heritage, nearly four years ago. We will be releasing lots this summer that promise to be some of the most beautiful lots on the lake.
If you would like more information on Russell Lands and property availability on Lake Martin, give us a call at 256.215.7011.