Real Estate Report

Market data has good news and really good news

When someone starts off with the good-news-bad-news routine, I like to get the bad news first. This report is a good-news and really-good-news report, so let’s start off with just the “good news.” If you follow this column, you should recall that we noted in last month’s report that the overall sales volume for waterfront residential property was lower in the 12 months ending in August 2016 versus the same period last year.

That trend has continued for the 12 months ending in September 2016. The overall sales volume through the end of September was 3.9% lower than the same period in 2015. While that might not appear to be good news, it isn’t exactly bad news, since 2015 was the second best year ever for Lake Martin real estate sales ever. This year’s sales volume is on pace for a pretty respectable third place.

Wait, there is more good news regarding sales pace. Usually, the number of closings for Lake Martin properties drops from August to September. Not this year. The number of property sales actually increased in September over August by 23.3%. So, the slightly lower numbers appear to be turning north.

So, enough of the good news. How about the really good news? For well over a year, the market has been tracking month-over-month increases in property values. That trend has continued in the most recent sales numbers. The median sales price for residential properties continues to increase. The most recent report shows an increase of 6.8% over the same period last year.

According to numbers from the University of Alabama’s Center for Real Estate, median prices for all Lake Martin Waterfront properties (including lots) increased 12.8% over last year, and September’s median price increased 22.4% over the five-year average for September. This is really important, because property values are returning to, and in some cases vaulting past, the pre-recession peak values.

So, the really good news is that property values are increasing while, at the same time, better properties are selling faster. Current average selling time fell from 184 days last year to 166 days this year. Coupled with a lower supply of available properties, this trend for increasing property values should be welcome news for Lake Martin property owners.

The growth in market value has led to stability in pricing with the average residential list-price-to-sales-price ratio increasing to 94.3%. Experience has shown that a stable market exists when this ratio is between 94% and 96%.

Market Predictions

The market has plateaued at a healthy sales level with stable vital signs. Given the reduction in available inventory, sales prices are likely to continue to rise creating greater equity for all lake owners. Average values are returning to near peak levels and, given current trends for 2017, point to a good market only restrained by lower inventory.