Real Estate Market Report

Property values continue to rise

 There is good news for those that own property on Lake Martin — property values have definitely been on the rise. A glance at the year-over-year comparison for the 12 months ending August 2018 shows the median price for residential property (single family, townhomes and condos) has increased 16.7% over the same period in 2017.

Last August, the median price stood at $420,000 and, this year, the price increased to $490,000. The average price increased 13.9% to $595,320 from $522,507 last year. Condo average prices stand at $296,469, and single-family detached stand at $691,202.

To put this in perspective, it helps to look back to 2014 to see how the market has fared over a four-year period. For Lake Martin, the median price for the 12-month period ending in August 2014 was $350,000 versus $490,000 today — a 40% increase. The average price in 2014 was $435,425 versus $595,320, or a 36.72% increase!

Unit sales slower

We expected increasing prices to affect the overall demand and the number of transactions. For the past year, the number of transactions dropped from 350 residential sales to 317 sales. That is a 9.4% decrease in the number of transactions year over year. While the total number of transactions dropped, the actual total dollar volume of sales increased 3.2% for the last year.

While increased prices did affect the number of sales, we believe two other factors have an equal or greater impact. The first is that rates have increased roughly 1 percentage point over the last year. This would add nearly $6,000 a year to the interest carried on a residential purchase.

Of greater impact, since rates are still historically attractive at 5% or below, is that inventory has dropped considerably. As of August 31, 2018, there are just 271 residential properties available on the lake. (That is one property per nearly three miles of shoreline.) In August of 2014, there were 350 properties on the market. That is a reduction of over 29% in available properties.

Lower levels of inventory affect the number of sales — possibly even more than price increases. A proof of this point is the length of time to sell a home has decreased significantly. In 2014, the average property sale occurred within 219 days. Historic normal selling time for the lake is roughly 180 days. This past year property sales occurred in 157 days.

Overall observations

Property value increases are impressive. While the number of transactions is lower than 2017 (which was one of the best years on record), the sales level is still well above average. The total dollar volume of sales is still above the last year’s historic high levels. Also, property is selling faster than historic norms (including 17 days faster than in 2017).

Developers and builders are bringing new and exciting homes and lot inventory to the market. This will provide needed inventory for those looking to find a lake home on Lake Martin. We think these new home offerings are improvements over older lake homes in design and décor.

We have introduced new lot and home inventory this past year, and our 2018 sales levels were nearly at historic highs. In fact, our sales organizations reported sales increases far higher than the overall marketplace.

We believe 2019 will be very much like 2018 in sales volume with smaller increases in property values, but likely not by much. We recommend, if you are interested in selling your property, that you spruce it up during the winter months to put on the market in February.

If you are interested in purchasing, reach out to one of our Sales Executives by calling 256.215.7011 or drop us a line via e-mail. They know what is on the market, and what is coming on the market and when.