Market Report: A Look at the Midyear Numbers

Our analysis of waterfront real estate sales on Lake Martin for the first six months of 2019, as compared to 2018, can best be described as “steady as she goes.” Unit sales for residential waterfront property for the six months ending in June are just slightly ahead of this same period last year.

Waterfront residential sales (homes and condos) through June 2019 were 156 units, compared to 149 units for the same period in 2018. Single-family sales for the same period were 117 for 2019 versus 112 for 2018. Waterfront lot sales were down slightly with 28 sales for 2019 versus 31 for 2018. All waterfront sales totaled 187 units for 2019 compared to 180 for 2018.

Those numbers are impressive compared to national trends. A recent report from the National Association of Realtors^® indicates that annualized unit sales are down 2.2% on a national level, with the southern region down 5.2%. Given the national and regional trends, we are very pleased with the sales level for the first six months of 2019.

Deeper dive

While unit sales are on the uptick, the overall dollar volume for sales is down slightly (-3.15%) compared to last year. This decrease is due to a drop-off in the number of higher-end property sales—sales above $1,000,000.  There were a significant number of high-end properties marked as “pending closing” at the end of June, so we think this statistical decrease will right itself by the end of the year.

Waterfront lot sales improved compared to a year ago due to a smaller supply of available lake homes. While the total number of units is slightly lower, all other key metrics for lot sales are drastically better. The average selling price for a waterfront lot increased 40.38% to $324,589. The median price doubled to $350,000 from $175,000 last year.

Gross dollar volume for waterfront lots is much higher due to the increase in average selling price. The total volume for the first six months increased 26.79% above the same period last year. List-price-to-sales-price ratio increased dramatically. Last year, the list-price-to-sales-price ratio was 87.6%. This year, it improved to 94.5%—the highest ratio we have on record.

Implications for the rest of the year

We are pleased that the strong market trend dating back to January 2017 continues through 2018 and into this year. This is surprising given reduced inventory levels. While many people opted to build the perfect lake home due to reduced inventory, this has reduced the inventory of attractive lots. That might place a drag on this very bright spot in the market.

Because the economy is fundamentally strong, we see strong demand for the immediate future. We think there are two headwinds for the real estate market on Lake Martin. The first is that there are not enough newly built new lake homes to replace those sold over the last two-plus years. The second is that attractive lots are selling faster than they are being developed. Lack of inventory in those two key areas will mean missed opportunities.

We think the average price might decrease slightly, due to fewer upper-end sales. However, we think that the value of each lake home will rise due to lower inventory numbers. Simple economics: equal-to or slightly higher demand, with lower inventory, is bound to create higher prices in the near term.

We work hard to stay abreast of what is happening in the market. The trends that we see have driven our decisions about what comes next. To hear the latest plans, contact one of our Sales Executives by email or by calling 256.215.7011 today.