Lake Martin Voice Realty
I have a new waterfront Lake Martin home for sale on the east side of the lake, 108 Leisure Lane, and every time I think about it, I want to head there with my paddle board and spend a few hours exploring.
This Manoy Creek home has 3 beds and 2 baths on a great, flat lot. Best of all, its neighbor to the east is a 68 acre parcel of Alabama Power Project Land. That means the area will not be developed, and that makes for privacy, super paddle boarding, fishing and skiing. I imagine loading my fishing gear on my board, paddling along the woodsy shoreline, maybe making my way across the slough to visit a neighbor. . .
By the way, I’ve had several clients buy in this area of Lake Martin specifically for the great skiing and wake boarding spots.
If you’re interested in this home, or any property in the Lake Martin MLS, give me a call at 334 221 5862, email me at john (at) lakemartinvoice (dot) com, or click here to contact me. I sell real estate exclusively on Lake Martin full time, and I’d love to help you with your search!
It’s a YouTube channel devoted to Lake Martin and Lake Martin waterfront real estate. And I promise it’s not about me!
I know you are bombarded by cheesy ads asking you to “Like” this on Facebook or “Follow Me” on Twitter. I see them too, and I always think, “Why? Why would I do that?” A lot of times there isn’t a good reason or incentive. You can already view my Lake Martin YouTube Channel without subscribing, but if you do subscribe, you’ll be notified as soon as I upload new videos. That means you won’t miss a thing going on at the lake.
Also, if you have the YouTube app, it will make it easy for you to keep up that way. That’s how I watch most videos on YouTube. I go to the app and scroll down my subscriptions, and anything with a red number on it means it has videos that I have not seen. It’s pretty convenient.
My goal is to be your #1 resource for all things Lake Martin real estate. I want to have the savviest clients and readers around, so my YouTube channel is another way to get great information on homes, neighborhoods, and community events at Lake Martin. As of today, I have uploaded 344 videos to the Lake Martin Voice channel, and 281 of them are viewable by the public. (See private tour video info at the end of this post to learn why all videos are not public.) These videos are organized into Playlists: How to Search the MLS, Client Testimonials, Community Info Videos, Lake Martin Neighborhood Tours, and Waterfront Home Tours.
YouTube lets you make a plug for your channel that pops up at the top of the page, and here’s mine below. Am I convincing? Are you signing up?
YouTube is also where I upload Private Tours for clients who want more info on a particular home for sale, but it’s another company’s listing. I go to the property, film a walk through tour of the home and lot, and then give the client a private YouTube link to view the video. It’s a service a lot of my customers use to help narrow down properties to see and therefore make their trips to the lake more efficient and productive.
If you’re interested in Lake Martin real estate, I’d love to be your Realtor. Call me at 334 221 5862, email me at john at lakemartinvoice dot com, or click here to contact me, and let’s talk Lake Martin.
I often talk about Lake Martin being a second home real estate market, and it is, but there are also plenty of families who live here year round.
I had a lot of fun last year helping Jackson and Nicki find their full time Lake Martin home. Because they were looking for their primary residence, and because they also make their living on the lake (TowBoatUS), their list of essentials looked a little different: school zoning, year round deep water at their dock, access to in-town amenities, a house that didn’t need a lot of renovation, and a firm price range.
The challenge of meeting their needs was exciting for me, and the good news is that after spending several months in their new home, they are really happy. I caught up with them last week and here’s what they had to say about their experience:
If you’re looking for a primary residence or a second home on Lake Martin, I’d love to talk with you about your search. I help buyers and sellers at Lake Martin as a full time business, and I work hard to have the most educated Lake Martin real estate client base around. If you have questions about Lake Martin real estate, and you can’t find the answers on this website, call me at 334 221 5862 or contact me here or email me at john at lakemartinvoice dot com, and I’ll get you the answers. If you have suggestions for future blog posts, let me know that, too. Thanks!
How do we know the value of a Lake Martin waterfront lot? Have you ever seen two that are exactly alike? Do appraisers base their finding based on a feeling, or is there a formula?
Yes, there are several formulas, but only one that works at Lake Martin: Comparable Sales.
Every now and then, out-of-town appraisers come to Lake Martin and are paid to make decisions about property value on our lake. And they often bring their city-style pricing methods with them. I’ve seen it enough, and have had to have this conversation with buyers often enough that I felt a real study of lot pricing methods was due. I wanted to combine our MLS sales data with the anecdotal evidence I’ve been collecting for years.
I’ve been saying for a few weeks now (Part 1 and Part 2 of this series) that Lake Martin waterfront lots are best valued by the Comparable Sales method. I’ve walked you through two other methods that don’t cut it in our Lake Martin market: Price Per Waterfront Foot and Price Per Square Foot/Acre. The time has come address the most accurate valuation tool, the Comparable Sales Method aka the Sales Comparison Approach.
The Comparable Sales Method at Work on Lake Martin
“The Comparable Sales Method uses data from the sales of similar properties to estimate the market value of a piece of real estate. This is a common method of assessing the value of real estate . . . In most cases, several similar properties are used in the analysis.” (About.com) So what I do when helping a potential seller determine a list price for their lake property is look at other similar sales. A perfect comparable sale would be one that is geographically close, with a similar view, privacy, water depth, and waterfront footage, etc. Properties that have already sold are called “comparables,” and the lot you are trying to value is called the “subject.”
When the Sales Comparison Approach is used, choosing the most comparable sales is a critical part of the equation. To make things simple, let’s think about deed restricted developments on Lake Martin first. The old real estate cliché of “location, location, location” does apply at Lake Martin. Over the years, buyers have shown a preference to select lots that are inside deed restricted neighborhoods with covenants and homeowners associations.
One takeaway from this study is that the Comparable Sales method is labor intensive. It requires a working knowledge of the area – otherwise how to know which sales are most comparable? It also supposes an understanding of what buyers value in a Lake Martin lot. Like most real estate pricing, it is not an exact science, but I think you can get pretty close. There is no getting around it, no shortcuts, no magic formula. One simply has to buckle down and find the most comparable sales and then adjust to match the subject. For instance, if a comparable lot sells for $185,000, and I think that its view contributes 10% more value than the subject’s, then I would subtract 10% or $18,500 from the sales price to arrive at an estimation of the subject of $166,500. I try to get two of three more comparables, and average their adjusted sales prices, and presto, I have my estimation of value.
Obviously it gets a little more tricky to find comparable sales for properties that are not in formal neighborhoods at the lake, and there are some that are not. But it can be done, and done well with the proper research. The same goes for properties with homes.
The Sales Comparison Approach is also the preferred method by residential appraisers, so we shouldn’t be surprised that is the most accurate here at Lake Martin.
That is not to say that waterfront footage should be ignored – not at all. When using the sales comparison approach, if two lots are ceteris paribus except for waterfront footage, consideration should be given to the lot with more feet at lakeside. There is a place for adjustment for waterfront footage, but only as a secondary, fine tuning after first selecting good comparable sales. Much like a set of scales at the doctor’s office has two weights - a large one to get you close, and a small to get you exact:
Hopefully this study dispels the impulse of using waterfront footage as a starting point, or as the primary driver of estimated sales price. The numbers just don’t work. I also hope that using a price per acreage or per square foot will not be used at all.
And now, having read all three parts of this math heavy series on lot pricing, I declare you to be a graduate of the Lake Martin Voice School of Graphs and Charts! Congratulations!
Caveat: If you call me to list your waterfront home or lot, and you tell me you have a “feeling” your Lake Martin lot should sell for X because Lake Martin lots generally sell for X per square foot, I’m going to make you go back to Part 1 and retake the course.
Links to Related Material:
The Lake Martin community extends beyond the shoreline of Lake Martin, and I love all the history that is a part of our location in central Alabama. My kids and my wife think I am goofy about this, but I am among the many hundreds if not thousands of people that are excited about the 200th anniversary of the Battle of Horseshoe Bend.
Alabama artist,Tommy Moorehead thinks it’s worthy subject matter as well:
Now through April 5th, Henry Foy’s Gallery 128 at Emporium Wine, is displaying Mr. Moorehead’s art to commemorate The Bicentennial of The Battle of Horseshoe Bend. Check it out on Facebook. Even my wife, an artist herself, was interested.
Suddenly I am not so nerdy, eh?
The official anniversary proceedings are happening on March 27, 28, and 29th, 2014 at Horseshoe Bend National Military Park (on Highway 49, a couple of miles north of Highway 280 in Dadeville, AL). For more information, see the Park’s website here. If you are unfamiliar with the Battle of Horseshoe Bend, it’s only (arguably) the most important early American vs. Native American battle east of the Mississippi. It was the launching pad of many famous Americans like Andrew Jackson, Davy Crockett, Menewa, and Sam Houston, and it’s right in our backyard at Lake Martin.
I sent a letter to my kids’ school last month to make sure they knew about this event, and to offer my services as possible guide. The principal sent my letter out school wide, and then informed me that (lucky us!) it is happening during our Spring Break week. So now, as part of our Spring Break 2014 celebration, we are bringing another fortunate family (or two) to hear the canon, see the encampments, and soak up the history. My kids are not yet convinced that this will be as fun as the beach, but I’m betting I can change their minds a little, or at least have a seed planted of love for our local history. See you there!
One of my favorite classes in college was Economics 102. Microeconomics. It’s the study of transactions and human behavior.
I love economics because it’s the study of how people actually act – not how they SAY they are going to act. One of the key takeaways I had from that class was when my professor, Gary Dale, would say “When two people are free to act in a transaction, there are no winners and losers. Each person has decided to act for his or her own benefit.”
So I can’t really say that I lost a sale, but I can say that I sort of lost a buyer. I got a call from a buyer, let’s call him “Craig,” who let me know that he’d found a house to buy at Lake Martin. The only catch was that it was off of the Lake Martin MLS , so I could not be involved with helping him with the transaction. It was a bit of sad news for me because I had been working with him for two years. But, I can honestly say that I was happy that he and his family had found the right lake home.
Before we hung up the phone, he let me know that he had given me a thank you gift. He sent this gift certificate to SpringHouse restaurant for me and my wife to go on a date night. I was blown away by his generosity. What a kind gesture from him and his wife – I won’t forget it.
Once again, “Craig,” I thank you and am so excited for you and your family to be part of the Lake Martin community!
What do you know about Lake Martin waterfront lot pricing? In the city, it can be feasible to value a lot using multiple pricing methods, but at Lake Martin, it’s a whole different ball game. I’ve been telling buyers this for years based on anecdotal evidence, but now I have studied the Lake Martin MLS sales numbers and can back up my claim that the Comparable Sales method is the Lake Martin way to go.
Clichés are so… well ….. cliché. Part of the reason I started my real estate blog way back in 2007 was to examine, and publicize, what is really going on with Lake Martin real estate. I don’t claim to be the only voice for Lake Martin real estate, but I do hope to be a clear voice of the truth, looking past clichés, assumptions, agent puffery, and hocus pocus. Pretty is as pretty does around here. One of the biggest clichés or assumptions I constantly address with my buyers and sellers is how to accurately value a Lake Martin lot. Hence the need for this in-depth study.
In the first post I introduced three possible methods for valuing a lot: Comparable Sales, Price Per Waterfront Foot, and Price Per Foot/Acre. Hopefully I’ve already persuaded you that the Price Per Waterfront Foot method does not work as a primary method in the Lake Martin market. If not, click here to read Part I. Now I move to the Price Per Foot or Acre method . . .
Method 2: Price Per Square Foot / Acre
Most consumers do not start their price valuation method with the size of a lot, but I do hear it as a way to justify one lot over another. Curious, I used the same tests of the scatter plot and correlation coefficient to test the relationship of the size of lots to eventual sales price. The result was pretty telling:
Once again, the scatter plot reveals how unrelated the two variables are. If they were dependent, we would expect to see results tightly formulated in a line pattern. Instead, it is loose. Similarly, the correlation coefficient is telling. For square footage or acreage to sales price, it is -0.02. That’s right, it is almost zero. That tells us that the overall area of a lot is even less of a primary driver in sales price as is waterfront footage. In fact, to return to another cliché, we can say that the size of a lot on Lake Martin has about as much to do with its sales price as the price of tea in China.
Price per acre or square foot is so unrelated, I can’t even recommend it as a secondary adjustment.
In the third (and final) post in this series, I’m going to walk you through the more accurate Comparable Sales method of valuing a waterfront lot. It, too, will be heavy on the nerd factor, but somebody’s got to crunch the numbers in order to speak real estate truth. Thanks for hanging in with me – I hope this is time well spent.
If you want to talk Lake Martin real estate – any topic, not just lot values – I’d love for you to give me a call 334 221 5862, or click here to contact me.
Links to Related Material:
2013 was a remarkable year for lot sales at Lake Martin.
I want my readers to be the savviest Lake Martin real estate audience around. That’s why I don’t hesitate to throw numbers and charts and graphs at you, and I’m about to get really geeky on you in this three part series about waterfront lot pricing. I also am a firm believer in NOT HORDING my information. Some agents think I am crazy for publicizing my analysis of the Lake Martin market, saying that I should use it to “force” people to call me directly. But, I think, gone are the days when real estate agents hold all of the cards when it comes to information. Say nothing, and the public flocks to irresponsibly incorrect sites like Zillow and Trulia. Much better to put the real, hyper local Lake Martin real estate information out there and try and earn the trust of people that way. Sure, I risk people using my analysis without ever calling me, but that’s the breaks, kiddo.
The following is the result of three months of research that I did for a seller client. I feel it’s so useful, I can’t help but share it here on my blog.
So I ask, “How much do you know about pricing Lake Martin waterfront lots?” You are about to know more.
Sixty-five waterfront lots sold from January 1, 2013 to December 2, 2013.1 This is a remarkable number, considering that in all of 2012, only thirty-eight lots were sold. Similarly, in 2011, all of the agents in the Lake Martin MLS combined to sell thirty-nine waterfront lots.
In 2013, this brokerage, Lake Martin Voice Realty, was blessed to be listing agency for many of these lots. I had hours of conversation with potential buyers about Lake Martin waterfront lots in general, and heard many theories about how lots should be priced. The method I’ve always promoted is the comparable sales method because lots at the lake can vary wildly, by many different factors – view, water depth, feet of shoreline, steeply sloping, flat, in a neighborhood, outside a development, etc.
There are two other valuation methods that I often hear referenced in conversations with buyers – Price Per Waterfront Foot and Price Per Square Foot or Acre. While these methods might prove helpful in other markets, for other reasons, I don’t think they’re reliable here.
So am I right, or am I just blowing hot air? The best way I know to find out is to crunch the numbers, and with a very large pool of comparable sales from which to draw in 2013, it was a great time to dig deep into our MLS sales data and find out.
Where Did I Get My Data?
I took a look at the waterfront lots in the Lake Martin Multiple Listing Service that had sold from January 1, 2013 to December 2, 2013. Sixty-five lots had sold. I deemed this to be a large enough sample pool as it is about double the lots sold in each of 2012 and 2011. I looked up each lot’s sales price, waterfront footage, and overall acreage. In the cases where the listing agent did not disclose the waterfront footage, I looked it up on the respective County Tax Assessors’ databases online. I disclose my sources not to claim that the measurements of waterfront footage will be perfect, but to let you know I think they will be close enough for this calculation. Then I charted this information on scatter plots to see if I could find any clear associations.
Three Ways to Price Lake Martin Waterfront Lots
I’m breaking the findings of this study into three blog posts. I want to walk you through all three methods in order to debunk the Price Per Waterfront Foot and Price Per Square Foot or Acre as useful on Lake Martin. Understanding what doesn’t work can help us understand the market as a whole. The first method we’re going to look at is the Price Per Waterfront Foot.
Price Per Waterfront Foot – Price Per Waterfront Foot is a statistic that is frequently thrown around as rule of thumb. When talking to people about lot valuations, quite often it is quoted as a lead in to another point, such as, “I know that lake lots sell for about $1,000 a waterfront foot, but…” What’s curious is that people almost always say $1,000 a foot. Sometimes you hear $2,000 a foot, but not often. It is also curious that this number hasn’t changed in about ten years. One would think that if it had any merit, the baseline would fluctuate with the different market phases that we have experienced since then.
A glance at this plot shows no clear association with any price per waterfront foot:
OK. That was pretty easy. Now I’m going to get more nerdy.
In addition to the eyeball test above, I also looked at the correlation coefficient. A correlation coefficient is “a statistical measure of the degree to which changes to the value of one variable predict change to the value of another.” In our case, it is a measure of the degree of how much a change in the amount of feet at the waterfront will affect the change in a lot’s sales price. In other words, this will put a number on how reliable a predictor a lot’s waterfront footage is for its sales price. A perfect correlation coefficient in a direct relationship is +1. Conversely, a perfect correlation coefficient in an inverse relationship is -1. No relationship would result in zero. Therefore, the closer the number is to zero, the more useless it will be to help us price lots, in this case.
Since we are measuring waterfront footage to sales price, we would expect a +1 since the hypothesis is that as a lot’s waterfront footage increases, so does its sales price. The result was as ambiguous as the scatter plot. The correlation coefficient of waterfront footage to sales price is 0.47 which is judged to be only a moderate correlation, not worthy of the first step in a valuation method.
I think it’s safe to say – based on the actual MLS sales numbers – that the Price Per Waterfront Footage method is not a reliable primary method for valuing a Lake Martin waterfront lot. So what about Price Per Square Foot/Acre? Could that method work reliably at the lake? Stay tuned for Part 2 of this study and I’ll discuss just that.
And if you’re interested in seeing the actual MLS data – the appendices, if you will – for my study, contact me here or give me a call and I’ll send you a copy. 334 221 5862.
Links to More Lake Martin Market Reports:
Over my years of selling waterfront Lake Martin real estate, I have acquired some fairly specialized skills. Some skills are more business oriented (generating leads via my website), and some are more experiential (like how to smoothly unlock a door and turn off a home’s alarm when the MLS instructions are not exactly accurate). This was a new one for me, though, and it came about in the name of delivering good customer service.
I was the listing agent for a great lot in Emerald Shores. Another realtor brought the buyer, and a contract was signed. As the closing date neared, the buyer began to worry that the water at the end of his future dock would not be deep enough. That’s a big deal. A big lot with an awesome view is not so great if can’t park your boat at the end of the dock. Unfortunately, a local contractor told the buyer there would only be about 4 feet of water depth at the end of his dock at full summer pool, and this did not sit well. This was only one guy’s guess – and a sheer guess at that - but it was enough to rattle the buyer and kill the sale. The deal was over.
I’d walked the lot many times and had a gut feeling that this 4 foot, full pool depth estimation was incorrect. If there is a dock already in place, then it’s not hard to estimate summer water depth in the middle of winter (see one of my eariliest LMV videos, Lake Martin Water Depth). But if there is no dock? A little trickier.
One of the jobs of any salesman is to overcome a buyer’s objections – that’s Zig Zigler 101. That usually means getting them more information. Once I understood this particular buyer’s objection (risk of buying a high end lake lot with little water at the dock), I knew I had to figure out a way to get a better measure.
I started looking up surveyors equipment on eBay, knowing full well that I was no surveyor. I happened to mention my online search to a good buddy, Doug Fuhrman, owner of Southern Traditions Construction. Doug said all I really needed was a Laser Level. And guess what? His partner, Donnie Richards, had one in his truck. That was in my driveway.
This Rotating Self Leveling Laser Level is like a light house that shoots a laser all the way around it. I could set it up on shore, and then walk out into the lake bed and adjust a receiver rod up and down. The system automatically finds its own level and then slings the laser around to show changes in depth to exact tenths of a foot. Since the average length of a Lake Martin dock is about 50-60 feet long, I would take measurements at 50 and 60 feet from the shore.
It was a bone chilling, windy February Friday when I set out with Doug’s equipment to get the accurate depth measurement. (I brag a lot about the warm weather at Lake Martin on this blog, but there are a few chilly days, too.) After taking my readings, sure enough, I found the water depth would be closer to 8 feet at the end of the dock – much more in line with the buyer’s expectations. The buyer was pleased – and he now had hard data to back up his choice of lots. The sale was completed.
Is this part of my normal routine? No. Could we have all shrugged our shoulders and said, “Oh well,” when the buyer decided the water was too shallow? Certainly. But my sellers would have lost a sale, and the buyers would have lost their dream lot.
I know you hear claims everyday that businesses “go the extra mile” and “go above and beyond” in the customer service department, and it sounds cliche. So I thought I’d give you a recent, concrete example and let you be the judge. I write this post not to be boastful, but to sincerely say that if I have the opportunity to work for you – either on the buying or the selling end of a deal – I will do what it takes to give you great service.
Lake Martin Voice Realty is a small, boutique real estate company on Lake Martin. We don’t set out to make every sale because that is not realistic – there are over 100 agents in the Lake Martin MLS. We do, however, set out to give exceptional service to those clients who choose us. We’d love to help you with your real estate needs, too.
If I could get real estate continuing ed. hours for adventures like this, that would be cool.
For more info on shoreline permitting and dock building, go to Alabama Power’s Shoreline Management website.
If you are unfamiliar with the winter / summer water level schedule on Lake Martin, check this site for the prior years and this year’s plan.
No need to get nerdy about the water level if you are unfamiliar. Just know that this is a great time of the year. Help celebrate as Lake Martin makes its annual journey up to full pool of 490! There’s even a Facebook page these days: Plug Day