All key market indicators are “green for go!”
Okay, we are in the real estate business, so of course we are going to say that the market is good. We have probably gotten a bit boring over the last two years reporting month after month that the market is improving. Okay, how is this for excitement — sales for waterfront property on Lake Martin for June of 2017 was up 34.1% over June of 2016! According to the Lake Martin Association of Realtors MLS, the total sales volume for June 2017 was $28,464,390, verses June 2016 sales volume of $21,229,600.
Month-over-month comparisons can give you false sense of market health, but all key year-over-year metrics are up. Dollar volume is up, unit sales count is up, average sales price is up, median price is up – only inventory is down. If you are wondering if now is a good time to buy or sell, the answer is most definitely yes!
The largest segment of the market is residential sales. For the 12 months ending in June 2017, the sales volume is up 2.4%. While that may not sound like much, annual sales were down by 2.7 % for the 12 months ending in May. Because of June’s results, we gained five percentage points in one month.
Another key metric is the List-Price-to-Sales-Price ratio for residential property which stands at 95.1%. (For example, a property listed for $1,000,000 will sell, on average, for $951,000.) That is an improvement over last year’s ratio of 93.7%. This is an indicator of a fairly stable market and serves as an overall barometer for supply and demand. Once this metric hits 96%, property owners experience significant appreciation and buyers find themselves in bid situations.
Condo and building sites sales pace soars
All property types are in the green, but two categories are setting some eye popping results. Lakefront condo sales are up 46.7% for the 12 months ending in June. Average sale prices for condos increased 8.7% with median prices increasing 18.7% to $279,000. The rush to buy condos has reduced available inventory to just 31 units.
Waterfront lot sales pace is roaring at full throttle. Year-over-year sales volume has increased by 62%. Since the available inventory of residential property is down by 12.4%, potential lake owners are turning towards custom lake home construction. While many might expect that builders are buying up lots for speculative projects, there are relatively few completed new homes on the market.
From 2012 through 2015, we witnessed waterfront real estate sales volume and values make a steady climb from the post-recession lows. From 2015 into early 2017, we have watched as available inventory has been reduced significantly. 2015 appeared to be a peak period, but recent sales results, even with reduced inventory, have returned sales to near record levels.
Prices have not just stabilized, but experienced steady increases without speculation or easy money policies that could create a bubble. We think that for those looking to buy property, there is still an upside to protect values due to the low amount of new inventory. Since the vast majority of buyers are financially capable “end users,” we appear to be in the sweet spot of a very stable real estate cycle.
Whether you are looking to buy or sell, you should, with the help of your Realtor, be able to find an excellent list of comparable properties to guide your decisions related to valuation. Age-old rules affecting value, such as location, amenities, view etc., are easier to rely upon.
The summer season is nearly over. For those who missed out on getting a lake home for this summer, we would suggest they call one of our Sales Executives at 256.215.7011 today. Homes started in September can be built during the winter and be ready for next summer.
All the vital signs are in “the green.” Maybe it is time to go.