Lake Martin Voice Realty
All Real Estate Is Local (This Means You, Lake Martin)
Life as a Lake Martin area realtor means I hear (and try to answer) lots of questions. One I get regularly is:
“I saw on CNN where home prices in (fill in here with name of huge city 3,000 miles away) are down 75%. All the sellers are being foreclosed on their sub prime mortgages. It’s spreading across the nation like locusts. When will Lake Martin be on sale like that?”
My answer – probably never.
It’s because All Real Estate Is Local. Including (and especially) Lake Martin.
A couple of days ago I read a great post on the WSJ Developments Blog entitled “There Is No National Housing Market.” Also another good one with the same title on the Matrix Blog. Basically they point out that while all markets are influenced by things like the mortgage market, most pricing and activity in the real estate industry is due to local factors. What might be true for rent on the west side of Manhattan won’t set the price in the middle of a Edward Scissorhands-esque subdivision in Tampa.
The “locality truth” is especially evident on Lake Martin. We have about 770 miles of shoreline, but only about 30% of it is developed. Of the undeveloped waterfront property, 99% of it is owned by only two companies: Alabama Power and Russell Lands. They are very good at not flooding the market with too much supply, which helps hold prices up. Think the De Beers diamond cartel.
Another truth about Lake Martin real estate is that you don’t have huge developers selling 
hundreds of spec homes in one subdivision at a time. Sure, there are some builders with $5 million in unsold homes – but that amount is concentrated in 3 homes. Sure, some builders are hurting, but not enough to affect the market (yet). And they’re not hurting because of some national phenomenon, but because they themselves have raised their prices too high too quickly. Simple supply and demand. Moreover, most waterfront property for sale right now is by private citizens, not builders, whom are not under too much pressure to sell.
I agree, the sub prime mess did not help Lake Martin waterfront sales in 2007. But it wasn’t a majority player. The majority of the slowdown was due to unrealistic sellers, with a minority influence of the drought thrown in for good measure. Odds are pretty good that it will straighten out in 2008, and 2009 will be the start of the next seller’s market.
So why aren’t the talking heads reporting this? I guess media reports that are numbers based and rational don’t pull those huge national ratings.
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I totally agree. There is no national housing market, every market has it’s own supply and demand factors. Sure, the mortgage rates are affected by the “national” market for bonds, but frankly they are at extremely low levels, which will in any healthy real estate market create more demand.
Good post, we in Charlotte have missed most of the bad news… but you know I heard the first national news stories in early ’05, long before even Florida went bad which was about 4th quarter 2005.Bottom line: you can aggregate, or tally all of the sales numbers nationwide and get a SALES number– but that is all is is, the sum and average,which will say little or nothing about the individual markets. Terry McDonald
[...] All real estate is local, a topic I have harped on several times on this site. John Coley from just up the road in the Lake Martin area says, “Basically they point out that while all markets are influenced by things like the mortgage market, most pricing and activity in the real estate industry is due to local factors. I couldn’t have said it better myself. [...]
Indeed, there is no national market. Here in Auburn, I neither saw these high appreciations during the boom neither a high drop in current home prices. However, markets who had high appreciations during the boom are likely to see sizable depreciations.
Now, John should acknowledge that demand on Lake Martin during the boom was driven more by people seeking high appreciations (quick buck) than faculty at Auburn seeking a cabin on the lake to enjoy with family.
Definitely, we will not see 75% depreciation on Lake Martin or anywhere(I wonder where this could be. Even Cleveland did not see this crash). But, we will see higher depreciation at Lake Martin than say Auburn…
All real estate is LOCAL– hopefully the buyers and sellers in Lake Martin heed these words and rely on a Lake Martin Real Estate professional to assist them!
You are right on target. I read the national stats and hope that we will never feel their pain. Living so close to NYC, with easy access and wonderful homes, we are not feeling the pinch…I must say, Lake Martin has just entered my list of “must see” places. The community is lucky to have an agent like you to represent them!
[...] more local lending would have helped because it€™s human nature to care more about the person you know than [...]