Disappearing Lake Lots

Accountants don’t like surprises.

In a former life, I worked as an accountant for a couple of different businesses. I enjoyed both companies, and I learned a whole lot. One thing I learned is that rare is the joyful surprise in the world of accounting.

Even if you have a profit you didn’t expect, you chide yourself for not accruing revenue properly or overestimating your expenses. 

Now that I have been selling real estate for more than a decade, I find that the debit-and-credit side of my brain has atrophied. ‘Sales’ is a totally different world, and I find myself surprised at least twice a day. In fact, I received two surprises this month when I cracked open the Lake Martin Area Multiple Listing Service (MLS) to see how Lake Martin’s sales were going. 

The first surprise was that 2017 home sales are farther ahead than not only the prior year but also the banner year of 2015. Through the first five months of 2017, 150 waterfront homes have been sold. That counts every agent in the MLS, all over the lake, at all price ranges.

The big news here is that the total of 150 represents a bruising 26 percent increase over 2015. Wow! I regard 2015 as the best year ever for the Lake Martin real estate market. So for this year to be trouncing the best year ever is quite notable, especially considering that five months is a pretty healthy sample size. 

The second, and larger, surprise was that waterfront lot sales inventory is down a significant amount when we look at historical trends. 

It is always a little dangerous to look at one-month snapshots, especially of inventory. But I use a monthly inventory amount because it is one of the most commonly tracked statistics by the real estate industry. 

I must admit even I was shocked to see just how much waterfront lot inventory is down on Lake Martin. If we take a look at May 2015, we see that about 161 lots were for sale here. That number has steadily decreased over two years to about 114 lots for sale this year.

That is a decrease of almost 30 percent. Huge!

The lack of available waterfront lots for sale has definitely impacted the sales. Over the same five-month time period of May 2015 to May 2017, lot sales have decreased as well. The number of lots sold by all the agents in the Lake Martin MLS dropped from 34 to 26, or a decrease of about 24 percent. 

We can say that sales did not drop in lockstep with the reduction in inventory, which, again, should spell upward pressure on prices. 

What other results might we see if there is a continued decrease of waterfront lot sales?

One possible result I can think of would be a continued blossoming of fixer-uppers around Lake Martin. Sometimes when buyers can’t find a vacant lot, they decide to buy an older home and either fix it up or tear it down and start from scratch. 

Either way, if you are involved in the construction industry, you have to like that news.

Note: I originally published this article in my monthly column in Lake Magazine. I am proud to write about Lake Martin Real Estate for Lake Magazine and ACRE – the Alabama Center for Real Estate.

 

Tags: , , ,