Fewer Sales – Faster Turnover – Higher Prices

The last “winter” report of the year is hot off the press, and the old supply-and-demand equation has proven true once again. The last 12 months of sales ending in February 2019 show that limited supply of salable property continues to result in higher prices for single-family waterfront homes as well as waterfront homesites.

Our market reports for the past year have indicated fewer sales year-over-year. We noted in the sales reports that lower unit sales levels were due to a smaller supply of properly priced and attractive waterfront properties on Lake Martin. If the smaller sales were due to macro-economic issues, like a recession, one would expect property prices and marketing times holding steady. Instead, prices are increasing, and marketing time is decreasing.

We reported in last September’s market report that the average sales price for a waterfront home had increased 14.3% for the previous 12-month period. That was an incredible pace for real estate, and we expected it to level off to a more normal 3-4%, but our most recent report indicates that single-family waterfront home prices are still 10.3% higher than this same period last year.

Faster Sales Pace

What has really gotten our attention has been how quickly homes are selling. For the 12 months ending in February 2018, it took, on average, 187 days to sell a single-family waterfront home. (Our experience is that 180 days is normal marketing time for Lake Martin due to the seasonality of our market.) This year, that time to sale has dropped to just 137 days, on average, to sell a waterfront home. That is a reduction of nearly two months.

In past reports, we noted a lower supply of attractive and properly priced homes and how buyers were forced to sit on the sidelines until new listings came on the market. We also noted that there have been multiple-offer situations. This 26% reduction in marketing time is an indicator of pent-up demand for the right type of property. One recent listing in The Ridge went under contract in just 23 days.

Waterfront Lot Sales Post Gains

A further indicator of the lack of the right type of property is the increase in the number of waterfront lot sales (11.7% increase) as well as the average price (3.5% increase). It stands to reason that if a prospective lakefront purchaser cannot find the right type of “built home,” the next best option is to acquire a lot, hire a designer, and then to build that dream lake home.

Newly developed lakefront lots in The Ridge and The Willows have been selling at a fairly brisk pace. The Ridge, for instance, has just two of the popular west-facing big-water-view lots still available. Sixteen of The Willows** homesites have been spoken for since their late summer 2018 release leaving just 11 available for sale.

Expectations

The word appears to have gotten out that the market is pretty strong, leading to an increase in newly listed properties since the first of the year. Inventory is only slightly larger (+5.18%) for waterfront homes, however, so we predict that average sales prices for waterfront homes will continue to increase through the summer.

More developed lots have come on the market over the past year. The best lots tend to sell first, and we anticipate newly released lots will likely sell quickly with the greatest number selling by mid-summer so a lake home could be built in time for the 2020 summer.

We encourage you to stay informed on newly listed properties. Our Sales Executives are constantly updating inventory and sharing information with those who express an interest. If you want to be the first to hear about new listings, give them a call at 256.215.7011 or click here to share your contact information.

** The Willows was selected by Birmingham Home & Garden magazine as the site for their 2019 Inspiration Home. Learn more >