I think that 2008 was “the bottom” of the Lake Martin real estate market. I was convinced by studying these Market Reports waterfront sales in 2009. This post will look deeper into 2009, attempting to find exactly what month it all turned around.
Hopefully this exercise will help us learn more about our current cycle, as well as more accurately predict future market swings.
Here is a chart of total waterfront homes sold in the Lake Martin real estate market, by year, since 2005:
I am convinced that to predict the direction of average home prices, one must look for clues in the number of homes sold this month to the same month last year. When any market sees a trend that shows the current month is beating the same month’s number of waterfront homes sold from last year, that signals a shift in the market.
If we go on the assumption that 2008 was the bottom of the buyer’s market, and that things are swinging back toward the seller’s favor, the natural question, when looking at the above graph, is:
What month did the Lake Martin market turn around?
The above chart shows the number of waterfront homes sold versus the same month of the prior year. For example, in July of 2007 11 homes were sold, and 28 were sold in July of 2006. 11 minus 28 is negative 17, so that is why July 2007 dips to -17 on the chart. In contrast, in June of 2009, 26 were sold, versus 7 in June 2008. So we have a positive 19.
Based on these findings, I think the Lake Martin real estate market hit the bottom around July of 2008.
That was the last month (other than a hiccup in April 09) that consistently lost to the same month of the prior year. Almost every month after that, we stayed above the zero line, meaning the entire Lake Martin real estate market was beating the prior year and heading in a positive sales direction.
The real question now is: since sales turned for the better in July of 2008, when will prices follow?
Based on these trends, I think 2010 will be a year of stagnant pricing. There is still too much inventory on the market to bid prices up. But I do think that the number of homes sold will help stave off the two year trend of falling prices.
This is good news to sellers, who may count their blessings that prices didn’t drop yet again. Buyers may need to go ahead and make their selections, because I see 2011 as a return to rising prices. Will we see the blistering 30% per year gains of 2000 – 2006? I doubt it. But 12% per year gain on any investment is pretty darn skippy.
Another way to look at it is this: the number of homes sold peaked in 2005 and started dropping in 2006. Yet it took until 2008 to catch up to prices – that was the first year that we had price drops. There was about a 24 or 30 month lag.
Therefore, if home sales picked up in mid 2008, the same 24 or 30 month lag would have prices rising late 2010 or early 2011.
Please remember that these statistics I cover are taken from the entire Lake Martin MLS – all agents, all brokerages, on all reported sales. Also please remember that any forward looking statements of mine are purely a guess, market conditions may change at any time. But people ask me all of the time what I think about prices and I try to give them an opinion backed up by statistics, instead of just sticking a wet finger in the air to judge wind direction.
Do you own Lake Martin waterfront home, lot, or condo, and you are wondering what it is worth?
Contact us today for a free, no hassle, no nag Comparable Market Analysis. Let us tell you how your home fits into this critical shift in the market, and how we would propose to creatively and effectively market your property.
Buyers – why wait until next year when prices will be on the rise again? The market may still be in the tank in your hometown but Lake Martin has been on the mend since mid 2008. Make your move now. Let us help you sift through the overpriced and picked over and help you find your spot to relax.
Lake Martin Real Estate Sales 2009 – Waterfront Lots
Lake Martin Real Estate Sales 2009 – Year In Review
Lake Martin Real Estate Sales 2008 – Year In Review
Lake Martin Real Estate Sales 2007 – Year In Review
(*)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.