What is the real estate market like on Lake Martin right now? I own waterfront property, should I sell? I want to buy Lake Martin waterfront property, but is it still a crazy market?
These are questions I hear constantly. Both potential buyers and sellers of Lake Martin real estate want to know if changing conditions will benefit them. To be sure, the water is way down, and so are the numbers of real estate transactions. I will cover cause and effect in a later post. But for now, let’s just focus on one question:
Is Lake Martin still a sellers’ market?
If you talk to 10 people, you get 10 different answers, ranging from Pollyanna agents who still think it’s a sellers’ market to Chicken Little bubble barkers who act like property owners are literally throwing money into Lake Martin each time the water drops an inch. What’s the truth? When I approach the question, I treat it like every other issue about Lake Martin real estate:
1. Break it down by market segments. What are you talking about, here? Waterfront or non-waterfront? Condos? Lots? Leased lot homes or deeded homes? Homes above a million? What? (Below I will only talk about waterfront property.)
2. Look at the numbers. As I have said before, you have to be careful when interpreting statistics in our market. It is relatively small in transaction number (when comparing to large cities like Atlanta). But, to make a market opinion, you must look at market statistics, so I try to consider a year of data at a time. The goal is to take emotion – and agenda – out of the equation. Just the facts, ma’am.
3. Apply Common Sense. Just as you don’t want to be ruled by emotion or anecdotal evidence, you also don’t want to let the misapplication of statistics throw you off course. There is no magic statistic or rule of thumb to proclaim a market a buyers’ or sellers’ market. You have to use your common sense to test the statistics versus your everyday observations.
MY TAKE ON THE DIFFERENT TYPES OF LAKE MARTIN WATERFRONT PROPERTY:
1. LOTS – Right now on Lake Martin there are 113 waterfront lots for sale. 13 have sold in the past 12 months. That means we have about 113 months of inventory, or it would take almost 10 years to sell at this pace. On its face, that figure suggests an extreme buyer’s market. I do think this is a buyer’s market, but, like condos, I think that if sellers were more realistic on price, most of these would get snapped up pretty quickly. Everyone wants a lot. But, I think many sellers have incorrectly priced assuming the market rose by 35% over 2006. My call – Buyers’ Market.
2. CONDOS – There are 112 waterfront condos for sale and only 34 have sold in the past twelve months. That’s 38 months’ worth of inventory – i.e. at this current buying rate, it would take over three years to sell all of the condos currently for sale. That doesn’t count any that are under construction or might come on the market in the future. The recent condo auction at Harbor Pointe taught us – there are buyers out there, but they are at lower prices. This segment was by far the easiest to judge. My call – Buyers’ Market.
3. DEEDED LOT HOMES UNDER $1 Million – In rural Alabama, it’s hard to call a $400,000 home a “starter home” with a straight face. But that is about the price point of the lower end of the deeded lot single family home on Lake Martin right now. In the deeded lot homes priced under $1 million, in the last 12 months, 120 have sold, or 10 a month. 249 are for sale now. So we have about 25 months’ inventory. But looking at this inventory, if a few sellers got realistic and dropped their prices, I think they would sell pretty well. If homes in this segment are priced right, and are “good ones,” they sell in 45 days. But because there are many that are overpriced and have been sitting on the market, I really can’t say that it is still a sellers’ market. My call – Balanced.
4. DEEDED LOT HOMES OVER $1 Million – This segment is harder to compare with prior years, because the rate of increase on investment has meant that many homes are now worth $1 million whereas in prior years they would be at $750k. To be fair, you really would need to compare homes over $1 mill today with homes over $750k in 2005. Right now, there are 66 for sale. 17 have closed in the past year, or about 1.5 a month. So we have about 44 months, or almost 4 years’ worth of inventory. Most of these are new construction spec houses being sold by builders. They are getting aggressive – dropping prices and adding incentives. My call – Buyers’ Market
5. LEASED LOT HOMES – 15 have sold in the past year, and right now there are 15 for sale. So there are 12 months’ inventory. I had one listed, we priced it aggressively, and it sold in 81 days, which is about the average time in a balanced market. Looking at the inventory, I think some are better values than others, so if they adjusted prices they might sell more rapidly. My call – Balanced.
Are you considering buying Lake Martin waterfront property right now? Why don’t you let me help you find what you need? I can help you sort through the above 5 segments FOR FREE. Sellers pay the real estate commission. I can help you with any Lake Martin waterfront property, regardless of who has it listed. An average real estate agent won’t help you much. A good realtor will save you money and time.