Articles & News
Property values post double-digit increase
September 30, 2020 is the “unofficial” end of the summer sales season for Lake Martin real estate. This gives us the perfect time to look at market data and assess the results of the summer sales season. There are a number of key metrics that are impressive with huge increases in property values leading the way.
As always, we are studying a 12-month period this year versus the same 12-month period last year. As noted above, we compiled from MLS sales data the sales numbers beginning on October 1, 2019 through September 30, 2020 versus the same period beginning in 2018.
The average sales price for residential property (single-family, townhomes, and condos) lake wide increased $102,425 to $688,207. That means, at least in theory, if you owned the average lake home this time last year, your value has increase 17.5% in one year! That is counter-intuitive given the COVID environment, but the numbers do not lie.
Part of the average price increase is due to an increased number of sales for upper-end properties, with sales of properties in the $1,500,000-to-$2,000,000 range increasing 183%. But all price ranges of lakefront, residential property increased by double digits, except those below $250,000.
We have noted several sales over the last two months that bear witness to an increase in values. One property in The Ridge, for instance, sold within the last two years for approximately $1,200,000 and resold for over $1,500,000. The only difference to the property was it sold un-furnished originally and resold furnished. (No, we do not think the furniture was that nice.) This is not an isolated occurrence but just one of several dozen examples we have witnessed this summer season.
Property values supported by fundamentals
For some time, we have noted the decrease in available lakefront properties. This decreased supply met with a much larger demand driven by social distancing and low rates. The inevitable result is higher prices as evidenced by this year’s 17.5% increase noted above.
Usually, the higher prices are met with an increased supply. That is not the case currently. Builders are busy building custom homes on the 100-plus waterfront homesites that have been purchased over the past year. That means they will not be able to produce “built for sale” homes to meet the demand.
Due to social distancing and a new appreciation for the Lake Martin lifestyle, property owners are not listing their properties for sale in numbers to satisfy demand. Last year, there were only 443 residential sales transactions. On September 30, there were fewer than 90 properties on the market for sale. That is far short of the supply needed to meet demand.
What to look for
We think, as noted above, that property values will continue to increase. That will entice some property owners to consider selling—either to take a profit, move up to a larger or smaller lake home, or relocate.
We expect developers will add new homesites and that builders will find a way to produce a limited number of new homes for sale, but not in numbers that will satisfy demand. We also think that the historically low interest rates will be available for the immediate future.
All of these fundamentals—added to the fact that owning a lake home is fun—are sure to support current pricing trends. As the old saying goes, “Buying a Lake Martin property is an investment all your family and friends can enjoy.”
If you are looking for a lake property, contact one of our Realtors® at 256.215.7011 today. Newly listed properties sell in days instead of weeks or months, so enlist them to keep you informed on available properties before they go under contract.