After several consecutive months of meeting or beating prior year’s sales, waterfront homes sold on Lake Martin dropped in April 2009 to 9 total, 7 fewer than were sold in April 2008.
When I wrote about the number of Lake Martin homes sold in the first quarter of 2009 in this post, I commented that there were many homes with the status of pending, meaning that they were under contract to sell. I thought that if all those closed, we would easily beat April of 2008. But apparently many of those are still under contract. Maybe this means that May 2009 will trounce May 2008, because at this writing there are 28 pending and in May 2008 there were only 14 homes that closed. Granted, I am sure that some may be homes under construction, or condos with long due diligence phases. I do think that Lake Martin (like almost all other markets) is experiencing longer times between contract agreement and closing. Lenders (more specifically their underwriters) are requiring more and more red tape and documents during the process, so it is taking longer to close.
Here is the chart showing monthly waterfront sales on Lake Martin. You can see the drop in April 2009:
Once you add them up cumulatively, you can see that 2009 is already behind 2008.
We will have to wait and see if Lake Martin has a surge of sales in May to make up for the stall in April. Please keep in mind, these statistics are for the entire Lake Martin MLS, all realtors, all brokerages. Here is a look at the numbers only:
Obviously a big part of the equation is the amount of waterfront homes and condos for sale, aka Active Listings. Take a look at this graph of the total waterfront listings in the Lake Martin MLS, starting in 2007:
You can see that in December 2007 and January 2008, the listings bottomed out at about 341, and then rose from there. It looks like we also found a bottom in December 2008 and January 2009, but at 421, which was a 23% increase from prior year. Will we continue to see more homes come on the market in 2009? Personally I do not think we will see as many homes come on the market in 2009 because as I stated in this post covering first quarter 2009 sales, there are virtually no new spec homes being built right now. Sure, there are a few here and there, but I don’t think they will be a big effect. Look at the huge leap from January to May 2008. We didn’t see that this year, but we ended up in the same place. My biggest question with supply is if we will have fewer new spec homes on the market, will they be replaced by Lake Martin foreclosures, short sales, and lender REO?
Since the late spring is such a crucial time in the Lake Martin real estate market, let’s take a deeper look at the numbers and answer some general questions like:
1. Of all the homes for sale right now on Lake Martin, how many are homes, how many are condos, and what is the price breakdown?
2. What is the price breakdown of homes and condos that have sold in 2009 so far?
3. What about Lake Martin waterfront lots for sale?
If you check the Lake Martin MLS, there are 851 residences for sale right now. 559 of those are waterfront. 557 are on Lake Martin. Of that 557, 158 are listed as condos or town homes. 7 are mobile homes. So that leaves 392 single family homes that are on the water. I think that is overstated, as I have seen many condos that are incorrectly designated as homes, but for now I will work with these.
Of the 392, only 23 are on leased lots.
The price breakdown of the 392 homes for sale on Lake Martin is:
Here is how that same chart looks if we apply it to the 31 homes that have sold through April 30, 2009:
At this writing, if you run a search in the Lake Martin MLS, and you select “Waterfront” = Y, you find that there are 162 lots for sale. If you look more closely, you find that four of those are on Yates Lake, seven on Lake Tallassee, one on Lake Jordan, and seven are on private lakes or “other.” If we are focusing only on Lake Martin, that leaves 143 lots for sale on Lake Martin. Here is the price breakdown:
In short, we have an big oversupply of lots for sale. To put it into perspective, look at it beside the sales and inventory statistics, as of April 2009:
You read that right, yes, only 3 lots have sold through the MLS on the entire lake so far this year. 2008 was the same story. It is interesting to note that in May 2008 7 sold, the equivalent of 20 months of inventory, which is approaching a balanced market condition. It tells me that the market has the potential, in spurts, to act normal. So what’s holding it back? Price, I think. Sellers, especially lot sellers, need to take a long hard look at price because they have 3 times the relative amount of competition than do home or condo sellers.
If you made it this far, you have to be wondering, what does this all mean to me?
Buyers– If you are interested in buying property on Lake Martin right now, the biggest problem you will have will be sorting through all of the noise. Yes, there are good deals out there, and yes there are still some overpriced dogs. When your perfect spot comes available, will you be ready? Call me, I can help you find your dream home or lot!
Sellers: Do not despair, you CAN still sell in this environment, but it requires extraordinary effort from you and your agent. Call me, I can help you address these 3 crucial aspects of selling: 1.) pricing, 2.) staging, and 3.) marketing.
Or for every post I have done on the subject:
(*)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 sales on Lake Martin.