Real Estate Market Report

November numbers point to an evolving market

Our periodic review of waterfront sales activity for the past 12 months is a “good news – bad news” report. For over a year, we have been watching with interest to see what effect the combination of declining inventory and increasing interest rates might have on the Lake Martin market. Let’s take a look at the “bad” news first.

Overall, residential sales on Lake Martin decreased in total dollar volume by 11.5%. That decrease was larger in the condo category (18.1% decrease) than in the single-family category (10.4%) decrease. Sales have clearly been affected by the reduced inventory level in the single-family category with available properties dropping by 16%. There are currently 152 homes are on the market versus 181 in November 2017, with sales demand at nearly twice that level.

Sales maintain healthy level

We are not surprised by the decrease in sales. We reported last January that, in many categories, 2017 was the best year on record for Lake Martin real estate activity. Years of pent-up demand following the recession resulted in a sales level that would be difficult to maintain, especially with a reduced inventory.

So, while numbers are down compared to 2017, they are still significantly higher versus those of 2016. Overall sales volume is up 14.62% over 2016, which we considered to be a good year for real estate on Lake Martin. 2016 also had a larger inventory (32.14% higher) and lower interest rates (below 4%). Overall, we think 2018 was a good year – certainly in the top three or four years on record.

Lands sales and average prices increase

That brings us to the “good news” for the market. While sales of residential ready-to-use property is tapering off due to reduced supply, sale of waterfront lots have increased dramatically. Overall sales volume increased by 23.2% over last year. While the number of home sales decreased by 47 units, 71 new owners have chosen a lot to build a new lake home.

The average sales price for both single-family detached and for waterfront lots have increased year-over-year.  Single-family values are up 8.4%, and waterfront lot values are up 19.5%. For those who don’t follow real estate closely, any appreciation rate above 5% is very good news!

Things to look for

We think that interest rate increases will tend to have a greater negative impact on property sales at the low end of the market. Many purchasers in this price category rely on traditional loan financing. Condo sales have seen significant decreases in both volume and average sales price (although values remain 30-40% above the recession values).

Homesite sales should continue at this level through spring and early summer 2019. Given the increased sales levels and the long lead time required to bring new lots onto the market, we think that, by August of next year, the supply of premium lots will be exhausted, slowing sales.

Newly-built lake homes will likely sell very quickly in 2019. There are very few finished new lake homes on the market. Those that were built over the last two years sold very quickly, especially compared with older lake homes.

For those who still want to find a place on Lake Martin, we recommend you stay abreast of the market. Our Sales Executives will be happy to send you the newest offerings on the market. Email us here or call 256.215.7011 to be the first to know of any new house and/or land offerings.