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Archive for the 'Seller Tips' Category

Are Lake Martin Real Estate Sales Seasonal?

lake martin alabama reflection leaf color

Are Lake Martin waterfront real estate sales seasonal? That’s a question I hear a lot this time of year.

It’s a pretty natural question, I think. If you own waterfront property on Lake Martin, you might be wondering whether or not to put it on the market now, or wait until the spring when the weather and the sales heat back up.

Or, if you are considering buying a home or a lot on Lake Martin, you could possibly be thinking that everything goes on sale after Labor Day.

To start with the buying side question, the answer is no. There is not huge price drop that happens after Labor Day. It just doesn’t happen. A studied the numbers on this a few years ago and found that the sale to list price ratio does not change when the temp goes down.  See this link. This myth persists, though. But it is bunk.

What about on the selling side? Are there so few sales on Lake Martin in the cold months that you’re better off to wait until the Spring?

I don’t think so.

Some sellers might worry that they will have a higher Days On Market statistic in the Spring if they don’t sell. I polled a few of my fellow agents and they agree with me:

It’s better to have it on the market and have a few higher days on market. Nobody pays much attention to that piece of data. In our market it doesn’t mean a seller is desperate, it usually means they are stubborn on price.

Think about it – if it’s not on the market, agents (like me) can’t advertise it. They can’t put it in the MLS. No one knows about it. It definitely won’t sell in that scenario.

Do you need help with Lake Martin real estate this fall? I would love to help out. I am a full time agent here at Lake Martin. Please call me at the number at the top of the screen or contact me here.

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Spring 2015 Market Report for Lake Martin

March 2015 was another great month for Lake Martin waterfront home sales.

The graph below was provided by the Alabama Center for Real Estate (ACRE). On it you can see the number of homes sold monthly and the amount of inventory in the Lake Martin area during those months. ACRE’s chart shows the months of March for 2007 through 2015.

March has been consistently been a good month for Lake Martin waterfront home sales.(*) In 2015, 36 homes were sold in the month of March. This number includes sales from all brokerages and real estate agencies that participate in the Lake Martin MLS. In 2014, there were 28 homes sold in the month of March, so there was an 8 home increase in sales from 2014 to 2015. This is impressive, because 2014 was a record year for sales. The previous record year for sales was in 2005, when 30 waterfront homes were sold in March.

Lake Martin Home Price Changes?

A question I hear a lot is, “if Lake Martin home sales are up, what about prices?”

It’s a great question. When I looked back at the entire year of 2014, I did not see evidence of a huge price increase for waterfront property. What I saw, maybe, was a slight increase. Perhaps a couple of percent, but it’s hard to parse the numbers that tightly. Looking forward, I think you have to consider the amount of waterfront homes for sale right now on Lake Martin.

There are currently 358 homes for sale right now in the Lake Martin MLS. In comparison, there were 324 homes for sale at this time in 2014. Back in 2005, there were 180 homes for sale and prices went up from 2005 to 2006.  To emphasize this point, I cut the ACRE chart down to only the years of 2005, 2014, and the current year.  For example, in 2005, when we had 180 homes for sale and selling 30 homes a month, it was only 6 months of inventory being sold.

I think that 2015 will be the first year in a while that we will be able to go up in price. I don’t think we will see huge (30%) price jumps like we saw in 2005 because of the ratio of sales to inventory. But I do think we have a pretty good chance for a home price increase here at Lake Martin.

Only time will tell, so check back for more market reports as the year goes on.

Do You Need Help At Lake Martin?

I’m a full time real estate agent here at Lake Martin. I write these market reports help my clients. Do you need help with buying or selling at Lake Martin, please contact me, John Coley, by using this contact form, calling me at 334 221 5862 or emailing directly at john (at) lakemartinvoice (dot) com.

Copyright notice – the above, and every other post on this blog, is the property of John Coley, Broker, Lake Martin Voice Realty. Appraisers may use my information in their appraisals without charge or asking, but please give me credit by citing me, my company name and title, and website address of http://lakemartinvoice.com.  If anyone else would like to use this information, please contact me here and ask. I probably will let you do it, just please ask!

(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of Realtors Multiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by   FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all waterfront sales on Lake Martin, Alabama.

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Lake Martin Agent on HGTV’s Lakefront Bargain Hunt

Lake martin agent on HGTV lakefront bargain huntLocal Lake Martin agent Amy Clark is featured on an upcoming episode of HGTV’s Lakefront Bargain Hunt!

Amy is the broker and owner of Amy Clark Real Estate. Amy’s contact info is:

Amy Clark Real Estate, Inc.
1994 Cherokee Road
Alexander City, AL 35010
http://sellinglakemartin.com

Amy is a great real estate agent and friend. She has been a very loyal member of the Lake Martin Area Association of Realtors for years, and has served in just about every office there is. Amy is also a hard working, good person, and I am so happy for her that she and her husband and fellow agent Todd were featured on HGTV. Please tune in to watch!

Show times:

    • Sunday May 3 at 7:30 pm CST
    • Monday May 4 at 2:30 am CST
    • Friday May 8 at 1:30 pm CST

Here’s the link on HGTV’s site: Lakefront Bargain Hunt

February 2015 Lake Martin Market Report

Often, I’m asked, “How is the market doing in 2015 compared to 2014?” In short, I think its doing great! If you look at the graph below provided by the Alabama Center for Real Estate, you can see that February 2015 sales doubled from February 2014. In February 2015, sales were at 14, compared to sales at 7 in February 2014.

Feb 2015 market report graph

The yellow line, represents the inventory levels. The levels are the same, and certainly a lot better than they were in the dark days of 2007. Overall, when you look at the big picture, you can see that supply on the inventory side is similar and demand on the sale side is similar. We are poised for another great year here at Lake Martin.

Hear more about this in the video below.

 

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2014 Is Lake Martin’s Best Year Ever

Lake Martin had its best year ever for waterfront real estate sales in 2014. This year’s real estate market report reflects record numbers of waterfront homes sold and waterfront lots sold.

Close readers of my prior market reports for Lake Martin will note that the previous record year for home sales was 2005. In that year, 285 waterfront homes, townhomes, and condos were sold in the Lake Martin MLS(*). It remained the high water mark as sales started to slide the very next year, bottoming with a miserable 137 waterfront homes  sold in 2008.

Do you remember 2008? I do. In 2007 we had no rain. In 2008 we saw few home sales.

Thankfully, the Lord God provided rain and lack of supply combined for the Lake Martin market to bounce back in 2009. As you can see on the above chart, the lake had 194 sales in 2009, a full 42% spike in one year.

Why do I go over these old numbers when I am supposed to be talking about 2014?

Because I think it is worthy to remember how everyone – ( well – almost everyone, see my point #3 to buyers in this report from 2008) – back then said “things will NEVER get back to the old days. We will NEVER see Lake Martin sell like 2005 again.” Wrongo. Incorrect. I heard the naysayers back then and I still hear someone say that at least once a month now.

Here is proof positive that you should never say never.  Seriously. Go back to my Lake Martin market reports in 2008 here and look at it.

Lake Martin Waterfront Lot Sales

You also might remember that 2013 was a huge year for waterfront lot sales here on Lake Martin. Did we repeat that feat in 2014? Yes.

Unbelievably, waterfront lot sales were higher in 2014 on Lake Martin than 2013. One might be tempted to conclude that this is only because Alabama Power Company, a private utility and major waterfront landowner, decided to sell a bunch of lots in both years. However, even if you remove the 23 lots Alabama Power sold in 2014 through the MLS, it would still leave 51 lots sold, which is way better than 2012. Similarly, in 2013 only 17 of these waterfront lots sold were from Alabama Power. Remove those, and the record still stands.

FAQ About My 2014 Lake Martin Real Estate Market Report

1.) What prices do in 2014 on waterfront homes? I will cover Lake Martin’s pricing trends in a later post. But my quick answer is that I did not see a huge price jump. I will detail this in the future.  Please stay tuned.

2.) If we beat 2005 for the best year ever, I guess that means now we will start sliding again? Not necessarily. I calls them as I sees them. When sales start slumping and losing to the prior year, I will be the first to say it. But not before then. Mark my words, in a free market, everything has a cycle. Yes, Lake Martin will experience another contraction some time in the future, just not now. Right now we are booming. Also, since I strongly believe that price follows sales, I don’t think we can call a peak until we see upward price movement.

3.) What do you do in real life? I am not a blogger or writer by trade. I am a humble real estate agent here at Lake Martin. I write these market reports and other items to try and be helpful. If I may help you buy or sell something here at Lake Martin, please contact me by clicking here. I would love to be of assistance.

 

Related Posts About Lake Martin Real Estate Market Reports:

Lake Martin 2012 Waterfront Market Report
Lake Martin 2013 Waterfront Market Report

All Lake Martin Waterfront Market Reports

Copyright notice – the above, and every other post on this blog, is the property of John Coley, Broker, Lake Martin Voice Realty. Appraisers may use my information in their appraisals without charge or asking, but please give me credit by citing me, my company name and title, and website address of http://lakemartinvoice.com.  If anyone else would like to use this information, please contact me here and ask. I probably will let you do it, just please ask!

(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of Realtors Multiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by   FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all waterfront sales on Lake Martin, Alabama.

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Another Lake Martin Video You Can’t Watch

At Lake Martin Voice Realty, we are big believers in real estate video. At this point, that almost goes without saying. We’ve been posting (hopefully) helpful videos about Lake Martin real estate and area info since about 2008. Some of these videos, though, are not for the public.
lake martin home seller video
I just posted a video to my YouTube channel that is not public. In fact, it is only aimed at four people.

Don’t feel sad, you can get one made for you, too. This Lake Martin video was made for two couples that went in together and allowed me to help them find their lake home. Due to work and kiddo restraints, they were all not able to make it to the “walkthrough” before closing. You are probably familiar with walkthroughs in your hometown – it’s where the buyer walks through the home, making sure everything is ok before closing, and perhaps – if they’re nice – the seller is there to let them know about the quirks, tips, and tricks of the home. Here at Lake Martin that also includes things like: How to winterize the landscape irrigation? How to treat the boat lift when the water goes down? Who’s the best neighbor to call if you need a tool?

So, no, you can’t watch my latest video. I made it by following around the seller and asking him questions. I uploaded it to YouTube and sent the Unlisted link to the buyers. It’s about fifteen minutes long, and hopefully will be of use to them for years to come. There is no extra charge for this, it is just how we roll up in here.

If you would like to watch all of the rest of the videos on Lake Martin that we’ve made since 2008, please CLICK HERE for my YouTube channel or here for a summary page and player on my blog.

If there are any questions you may have, please contact me and let me know. Thanks!

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Help Us Improve Our Site: Mobile Mode

Lake Martin Voice seeks to be the number one resource for all things about Lake Martin real estate.
lake martin mobile real estate search
We realize that a huge whallop of our readers do so from their mobile devices, be they iPhones, iPads, Androids, whatevers. We want Lake Martin Voice to be the number one resource for real estate on Lake Martin. Period. Therefore we want your mobile experience to be the best, too. Recently we installed a new tool to help with that. For the nerdy interested, it’s WP Touch, a WordPress plugin.

Anyway, we have some flexibility on how our menus and pages are displayed, so if you have any feedback we would love to hear it.

Specifically:

Do you like using the home search tool?
Is the home search easy to get to?
Once you’re on the home search, do you like it? What can improve?
What is hard to do?
What is easy to do?
Anything you would like added to the menus or pages?

If you have any feedback you can fill out this contact form or email me at john at lakemartinvoice dot com.

Thanks!

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Sold in 10 Days on Lake Martin

What does it take to sell a waterfront Lake Martin home in ten days?  That’s what happened with this Little Kowaliga property.  Since this home was a Lake Martin Voice Realty listing, I wanted to share this success story with you.  I also brought the buyers to the home, so I’m familiar with both parties.  While it is certainly not the norm to have a contract within ten days on Lake Martin, it’s a worthy goal.  So let’s unpack how this sale worked and see what lessons it offers.

457 First Street on Lake Martin

1.) The sellers had their lake home in great selling condition.

It looked good.  It was uncluttered, it was depersonalized, it was clean – all the tips you see on HGTV.  This is huge, and it does not always happen.  You’d be surprised. Let’s face it, people buy waterfront homes on Lake Martin to have fun – and a lot of times having fun gets in the way of keeping a tidy home.

2.) I had buyers who were ready to buy a Lake Martin home.

A large part of a realtor’s commission should be access to that agent’s “inventory” of current buyers who want to buy a Lake Martin home RIGHT NOW.  Not maybe, not hypothetically, but right now.  I had a buyer who was ready. This couple was familiar with Lake Martin already, and had been looking both online and in person. They were well researched on the Lake Martin market, and knew what they wanted.

Realistically, realtors do not always have that perfect buyer already queued in the wings, but another resource a realtor should bring to the table is his or her ability to go out and find other buyers.  That takes a strong marketing presence. That’s why I blog about Lake Martin – ninety percent of buyers look on web, and for the vast majority that is the first move they make, so I think our internet presence should be a big priority.

A strong web presence (website, youtube channel, pictures) is an absolute must. But you can have the prettiest pictures in the world and it doesn’t mean squat if it doesn’t get found. Your agent MUST have a site that can stand out of the noise of the web and get found by Google. That’s why I blog about Lake Martin in general, and real estate specifically. The search engines recognize this site as a strong resource, and visitors to my site (thank you very much) are the proof in the pudding. We have been blessed with about a million hits from literally hundreds of thousands of unique visitors since I have been blogging (2007).

3.) Maybe most importantly, the sellers had an honest assessment of pricing.

What is a home worth?  Really?  In spite of all of the real estate info available to buyers and sellers online these days, buying or selling a home is still a pretty personal transaction.  Objectivity can be difficult.  The sellers of this Little Kowaliga home had tested the market for 252 days at a higher price with another listing company.  They were willing to try again at a price more closely aligned with what our market was telling them.  The result was a sale.  In ten days.

4.) The media.

And specifically, a huge amount of pictures.  Most buyers are coming from out of town and can’t swing by the home during lunch to check it out.  For obvious reasons, I want Lake Martin to be known for its awesome real estate marketing. I want people to be blown away by the care we take to sell Lake Martin.  I want the info on all of our MLS properties to be readily available, completely thorough, and of the highest quality.  So we select the best forms of marketing and then get out of the way (No sassy glamor shots of me with my arms folded. No talk about my “team.” People want a lake home, not an agent).  In this case, we chose seventy two quality pictures of the Little Kowaliga home and put them on the MLS.  And on our website.  And on Flickr.

I am still surprised, however, that in this age of no cost digital pics, I still see agents in the MLS that mail in their media efforts.  I see homes with five pictures of a property, two of them are out of focus, and one contains their thumb.  I don’t get it. Let me say a word to people who are thinking about selling their Lake Martin property – check out the past listings of the agents you are considering. First of all – can you even find their listings? If you can’t, how do you expect a buyer to find them? And if you do find them, do you see vague directions? Lackluster verbal descriptions? Poorly lit and out of focus pictures? And I will say it – A TOTAL LACK OF VIDEO?

Why do you think this agent will do anything different for your property?

It shouldn’t matter what kind of property you are selling, I believe it is up to us agents to put in 100% effort to sell your waterfront properties.  I’ll never be confused with Ansel Adams or Steven Spielberg, but I can say that I will do my best to give not 5, but 45 clear pics of any property I have the honor of listing.

5.) Video video video.

We put out a great full motion video tour of the home.  Not a slideshow of the same MLS pics set to muzak.  We’re currently working on incorporating aerial shots of the properties into the video home tours, and that looks really cool. The video below is the one we made for the Little Kowaliga home; we try to squeeze  every possible bit of info about the property into these videos in under 3 minutes.  We want buyers to know exactly what the seller is offering, with no surprises once they arrive at the home in person.

We also did a quick aerial video of the outside of the Little Kowaliga home. It’s amazing how much additional info you can gain from this vantage:

10 days on the market was all it took in this case.  Like I said, this is not the norm for Days On Market, but the transaction is more likely to move quickly if all of these factors are considered.  And of all of these, an honest assessment of pricing is probably going to be the biggest factor.  I love Blizzards from Dairy Queen a whole lot, but I will not buy one for $10, even if it is the best looking Blizzard I have ever seen, and it is 105 degrees outside.  Its value has been set in the open market and I know I can get a comparable Blizzard for less on down the road.

So – Lake Martin homeowners, are you considering listing your home with a Lake Martin realtor?  If you are, and you like what you’ve seen here, I’d love the opportunity to talk with you about your property.  And if you are a buyer, I’d love to help you thoroughly scour the lake inventory and gather as much info as possible on homes that may meet your needs.  If you’re interested in a listing that is not mine, and you feel like you need more info, I make private video tours of other agent’s listings and provide you with a private YouTube link.  Call me.  John Coley  334  221 5862 or john (at) lakemartinvoice (dot)com.

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Why Zillow and Trulia are a Waste of Time at Lake Martin

This post is directed to Lake Martin waterfront property buyers – don’t waste your time with Zillow, Trulia, Homes.com, Realtor.com and their ilk (ZTR). They are terribly inaccurate.

This post is also to potential sellers of Lake Martin waterfront property. Don’t insist on having your home “featured” there. They stink, it’s a false hope, and they don’t generate good leads. It’s like wanting to be advertised on a billboard inside a smelly, run down indoor mall. Why would you bother?

If you want the most reliable, most accurate, most timely Lake Martin waterfront real estate information, search our local Lake Martin Area MLS.  Period.

3rd party syndicator sites like Zillow, Trulia, Homes.com and even Realtor.com rank high on some internet real estate searches for Lake Martin. But does that make them truly helpful for buyers and sellers?  If you’re not familiar with how these websites work, they try to be the MLS for the entire nation by getting content (listings of homes for sale) for free from agents, and then turning around and charging the same agents to advertise on their site in a circular, almost extortive calculation.  I don’t want to supply the rope and then pay the hangman, so I don’t advertise on any of these syndicators.

Plus, at Lake Martin, these sites just don’t work.  They merely cause confusion. They pull most of their info from County tax records, and since we are in a rural area, the info is not that pure, and our counties don’t report sales data.

Let me show you a quick example.  I did a Google search for one of Lake Martin Voice Realty’s new listings, 44 Fairwinds Circle in Windermere.   (This home is an awesome 6 bedroom, 4 bath, 4,457 sq foot home with custom hardwood floors and mill work throughout.  It was built in 2007 and is listed for $649k.) Google’s search results had Trulia, Zillow, Realtor.com and Homes.com all making the coveted first page of search results.  They must have it going on, right?

But you tell me if any of this information is helpful . . .

Here’s what I found on Trulia: According to Trulia, 44 Fairwinds Circle is a  ZERO BEDROOM2 bathroom, 1,665 sq ft home with wood siding. Hey home buyer  – can I interest you in this ZERO BEDROOM home? Awesome ! Yes! Sign me up!!!!

Trulia search Here’s Zillow:  if you trust Zillow, you would be led to believe that 44 Fairwinds Circle is a 1,665 sq ft home with unknown floor coverings, and a “Zestimate” of $595, 130. Here, Zillow carries along the ZERO BEDROOM concept that apparently is sweeping the nation. Wow! How cool! How Techy! How totally cutting edge that they are able to sit up in Oregon or wherever they are and tell us all how much a ZERO BEDROOM home costs in Windermere.

Zillow SearchAnd here’s Homes.com:  The same 2 bath, 1,665 sq ft home for around $711,500.  ZERO BEDROOMS, of course.  And why not pay $116,370 more? If you would like to pay $711k, I won’t hold you back. A zero bedroom home is priceless. You should know that by now.

Homes.com search

And even Realtor.com can’t get it straight:  44 Fairwinds Circle is listed as 4A Fairwinds Circle (the lot number) with 4,728 sq ft built in 2008.  If you look at all of these pages, notice how little space is devoted to actual data on the home versus ads for internet service, moo.com (??) and Blu dot. The thing that especially galls me about Realtor.com is that it is owned by the National Association of Realtors. Yes. You would think that this site would try and do a good job to be accurate, and then not turn around and extort advertising dollars by playing one agent off of another in a cruel, Leone-esque Mexican Standoff, – > (“What, Agent A, don’t you want to be listed as The Awesome Agent for this zip code? Well you ‘d better pony your money up because Agent B is bidding against you. Agent B – you’d better pay us because Agents A and C are vying for your coveted spot. “) Does that add value to the process? Also, Realtor.com only allows a few precious photos to be displayed unless you pay them to advertise. Check it out:

Realtor . com listing info

Are you finding these sites helpful, or are they adding confusion to the search?  I know the small detail on these screenshots may be hard to read, but what you’ll find is virtually the same incorrect information about the home on all of these websites.  A home with zero bedrooms and two bathrooms for $711,500k?  Does that make any sense?

Contrast that with the information found inside the Lake Martin MLS. 

Most local Multiple Listing Services are closed services, meaning they are not searchable by Internet search engines.  Our Lake Martin MLS is no exception, and contains only firsthand data on properties entered by the listing agents themselves. (And if we want to continue working, we’d better get it right.)  Local agents know the homes and have spoken extensively with the owners.  There is no “noise” from 3rd party syndicators to sift through, and you know exactly whom to call if you want to know more.

Here’s the screen shot for 44 Fairwinds as it appears in the MLS search.  The text is going to be hard to read here because there is so much information on the page, and it may look a little basic because it’s missing the huge ads for mortgage providers and the ginormous google map. But, I agree with Forrest Gump’s mama, pretty is as pretty does. If the so-called information that currently resides on ZTR sites is shiny and glitzy, does it matter that it’s so inaccurate as to be useless? You bet. I will take basic and correct any day. Granted, the MLS info is only as correct as the agent that enters it. But at least in the Lake Martin MLS you are getting the info from the direct source, and with its full complement of ALL the pictures, video, and related media:

Lake Martin MLS Screen ShotOur Lake Martin MLS entry for 44 Fairwinds Circle contains the data above, plus access to 93 photos of the property, our VIDEO TOUR of the property, and a map.  It’s thorough, it’s complete, and it is the most current information available.

So save yourself time and confusionsearch for Lake Martin real estate on the Lake Martin MLS Realtors have great incentive to display quality information for their listings.  And if you need more info, call a local realtor.  And if you’re calling a local, realtor, I’d love for you to call me.  John Coley  334  221 5862  or john (at) lake martin voice (dot) com.

Will I Ever Eat My Words And Pay ZTR?

Quite possibly. I can envision I day where I will be forced to pay Zillow, Trulia, and / or Realtor.com for the privilege of participating in a Mexican Standoff with other agents at Lake Martin. I know plenty of agents that I respect highly that are in other markets around the nation that do. Sadly, they must pay the hangmen and supply the rope, and they grit their teeth when they pay them each month because they know it’s not worth it and it benefits neither buyers nor sellers. So, I will never say never. But I can say, right now, while I am still beating or competing well with the third party syndicators, I will not.

Want more info on this subject, and proof that big brokerages in big markets are sick of ZTR as well? See this video: Abbott Realty  They are in San Diego, and figured this out in 2012. Since then, there have been more brokerages and MLSs to opt out of ZTR than opt in.

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Lake Martin Market Reports Yield Great Feedback

The Lake Martin waterfront real estate market is a unique animal. I try hard to provide meaningful market reports, built on math and not assumptions. I recently sent out my 2013 Year End Review via email. In it, I asked for suggestions on how to improve my report.

Letter from readersI received two very interesting emails, and thought I would publish them here. I would like to once again thank these readers for their input, and continue to ask for suggestions, and challenges, to my published numbers and analysis. With such a small number of homes sold each year, it’s critical to have good information. You won’t ever hurt my feelings if you think I am wrong or looking at something the wrong way. On the contrary, I would love to hear from you.

Here is the first email:

On Feb, 2014,  “Paul” wrote:

Just read though your email – great to see sales and construction activity continue to climb. You mentioned that you do not necessarily see price appreciation…..yet. Presumably you have the aggregate of sales dollars per annum. Does that not evidence any increase in avg sale/property?
Just curious because I was wondering how much the rate environment (which is still very favorable) could have an impact on discretionary/second home real estate purchases.

And my response:

Begin forwarded message:

From: John Coley
Subject: Re: sales data
Date: March, 2014
To: “Paul”

Hey “Paul,” thanks for your email. I don’t really look at aggregate sales dollar figures because I am not sure it is representative. For instance, the aggregate sales data in 2013 is going to be about double of 2008. But – 263 homes were sold in 2013 compared to 137 homes in 2008. If you looked at aggregate sales data you would be tempted to conclude that values have doubled since 2008, which certainly does not meet the smell test. I don’t know of any market anywhere that has doubled since 2008. In fact, I think values dropped slightly in 09 and have been steady since then. My bell curve chart and real world examples (homes bought in 08 that are for sale now) confirm that. But it is certainly interesting to consider.

As to interest rates – I don’t think rates mean a hill of beans to the average buyer. I think their interest rate sensitivity is zero. I have never run the numbers, but now that I know how to do so (I plan to do it like I did for WF footage and lot size) – I might try it. Stay tuned to my blog in the next few weeks, I am publishing the math behind my studies of price per WF foot.

Great to hear from you!

And the second email:

Dear John:
You asked for input on your charts, so being a CPA I couldn’t resist giving some! The chart you are using to determine whether prices are increasing I don’t think is accurate for that purpose. For example, let’s say in 2014 a lot of people in the $700,000 price range bought a lot of houses, let’s say 25% of all 2014 sales – the chart would of course spike at the $700,000 level indicating only that more people are buying houses at that level than they did in previous years. If the $700,000 buyers were buying houses that were previously sold for significantly less (i.e. a big price increase had occurred), the chart would not indicate that.

I don’t know if you have the data, but I believe a very meaningful chart re: price fluctuations would be to calculate the dollar sales per square foot, by subdivision, by year. That would certainly capture any price fluctuations. Since the subdivisions are all in different categories (i.e. comparing the Ridge to Trillium, or Blount’s Point area to Willow Point) cannot be meaningfully done.
I would love to see a chart that lists sales dollars per square foot, by subdivision, by year. Can you get your hands on that kind of data?

Many thanks for your very valuable research.

– “C.E.”

My response:

From: John Coley

Subject: Re: Lake Martin – February 2014
Date: March, 2014
To: “C.E.”

Hey “C.E.”, thanks for your email. I appreciate a fellow numbers guy giving me input. I am always on the lookout to build a better mousetrap and to similarly test assumptions of my own.

Re: per square foot – I think this stat is extremely misleading at the lake. The reason is that so much of a home’s value is tied up in the lot. PSF analysis works well in things like condos where everything is the same, but lake property is way too diverse and has too high a percentage of overall value tied up in the lot. See a post I did on my blog, way back in 2007:

5 Mistakes When Buying Real Estate on Lake Martin

There is zero correlation between sales price and square footage of home.

In that post I also mention the price per waterfront foot of a lot and its deceptive nature. Coincidentally, I just ran the numbers on that using 2013 sales. I will be posting the results on my blog. I did a scatter plot, and a correlation coefficient calculation. Where +1 is a perfectly direct relationship, 0 is no relationship, and -1 is a perfect indirect relationship, I found that waterfront footage only has about a 0.47 correlation, or classified as a secondary correlation by statisticians. Interestingly, the size of the lot (overall acreage) has a zero correlation. This math confirmed for me that when I am valuing lots, and therefore valuing homes, the most accurate method is to start with a comparable sales method, looking at similar location, view, privacy, and water quality. I secondarily adjust for WF footage, and do not adjust at all for acreage.
I will take a look at your suggestion of analysis by neighborhood. I am doing that already for a neighborhood report, but looking at PSF data on homes in a neighborhood will vary even more greatly because of our small sample pool. That’s why I only do price analysis once a year – in Willow Point there were only 8 homes sold in the last 12 months, from 600k to 2.2 million. When your sample pool is that small, it won’t normalize easily, and one home sale can thrown the whole thing in a wreck and make year to year comparisons inaccurate at worst. But all this does make for interesting discussion!!!

Regarding your example of the 700,000 category – if you look at the most recent example, in 2011 there was a spike in the over 1 million range. You can see the hump up there. Spikes like this are the prime reason I broke it all down to price strata, and also to look a year’s worth of sales. I am trying to normalize out the outliers. But again, great food for thought! Thanks!

Thanks for your email!!

It is so humbling that people read my market reports, much less take the time to comment on them and get me to really think about the conclusions I draw.  It helps more than you know.  A huge thanks for your feedback, and please keep it coming!

C.E., in a later email, suggested that I look at the percentage of and direction of change in per square foot pricing on Lake Martin waterfront home sales. His point was that while the raw number might not be useful, the direction thereof might be, kind of like the DJI in the stock market. I think this is a cool idea and worth some further study!

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