Articles & News

Sales Results Ebb and Flow


Published: 04.25.2019

Real estate is an interesting business because the market continues to evolve. Once you think you have it figured out, things change. Lake Martin real estate numbers are much like the waterfront it sits on—they ebb and flow. Our recent analysis of the last 12 months’ sales results shows strong market values but limited ownership opportunities.

The market ebbs in total sales

In late 2017, sales of waterfront property hit post-recession highs for unit sales. Since that time, unit sales have slowly decreased year-over-year, in tandem with lower inventory levels. For the 12 months ending in March of this year (April 2018 through March 2019), there were 50 fewer sales of residential property (14.5% lower) on Lake Martin than those of the same period the previous year (April 2017 through March 2018).*

For months, we have noted a reason for the reduced number of properties sold is that the total number of properties available is lower. Currently, the MLS has 42 fewer properties (13.91% lower) than in the same period in 2017, which was the peak for unit sales. As any beginning economist knows, a smaller supply is likely to result in fewer sales.

While the number of sales has decreased, we can gauge interest by judging the speed at which waterfront properties sell. For the past year, single family homes were selling in 139 days versus 188 days for the same period in 2018. That is 49 days faster than last year, clearly an indicator that prospective buyers are waiting for the perfect lake property to come on the market.

The market flows in values

The decrease in the number of sales is not a surprise when you look at property values. This year, the average price and median price are both higher. Residential waterfront property average prices are 4.2% higher—year-over-year for the most recent period. Median prices are 7.6% higher—year-over-year. Even more impressive, prices are 28.84% higher on average than those of the same period two years ago, which was the high-water mark for unit sales.**

Homesite sales begin to fill the gap

While the residential market slows due to reduced inventory and higher prices, sales of waterfront homesites picks up momentum. The total number of sales has increased 25.6% to 70 properties sold. With fewer properties to choose from and prices testing historic levels, it is not surprising that prospective buyers consider a build-to-order option.

What will the market do next?

We still have a strong economy; interest rates have retreated from their recent highs last fall; new properties are coming on the market; and newly developed lakefront neighborhoods like The Willows are emerging. Due to those factors, we think that this year will end up being better than 2018, but we think that the appreciation rate will stay in the 4-6% rangeyear-over-year. Short of a significant influx of newly listed properties, prices and the number of sales will stay near current levels.

The sales season is just beginning, but early indications are that inventory of key property types is still short of demand. For that reason, we recommend that you stay abreast of newly listed properties. Our Sales Executives work hard at staying up-to-date with available inventory. Call them at 256.215.7011 or click here to ask them what is new to the market.

 


* There were 294 residential transactions totaling $176,921,982 for the 12-month period ending March 31, 2019. April 2017 through March 2018 there were 344 units sold totaling $198,738,982 in sales (highest post-recession level).

** The average price for residential waterfront properties was $601,775 for the 12-month period ending March 31, 2019, verses $467,066 in the same period in 2017 and $577,729 in the same period in 2018.

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