What is your New Year’s Resolution this year?
Whatever it is, there’s a 92% chance you will fail at keeping it, according to author Jon Acuff.
Wow. That’s really motivating, isn’t it?
The website Statista.com found that the top three resolutions in America from January, 2022, were: exercise more, eat healthier, and lose weight. I get it. These are the same three resolutions I have when I read Lake Magazine every January, but I don’t seem to do well on mine, either.
I am trying to get better at making positive changes in my life, so I have been reading a lot about habits lately. James Clear wrote a bestselling book called Atomic Habits. I highly recommend it. His basic premise is that most people that are trying to get better at something should not focus on huge goals. Instead, Clear argues that a better strategy is to change your habits in little ways, day by day, and eventually reap compounding positive effects.
I am so convinced by Clear’s research that I have resolved to not make any resolutions for 2023. Instead, I will look at my daily habits and adjust them to each my desired outcome, however eventual that outcome may be.
Except – I think we should all resolve to forget 2020.
I don’t mean totally forget the entire year. I just mean that when it comes to the real estate market at Lake Martin, we need to all agree that 2020’s other-worldly sales results and gains in value were not normal. Not normal at all. Sales were 30% greater than the previous best year. Prices jumped as buyers, in a Covid-fueled frenzy, bought up everything in sight.
The sales rush is over now. That much is clear from the real estate sales. At the time I write this, we have the sales results through the end of November, 2022.
There have been 269 waterfront residences sold through the Lake Martin Multiple Listing Service, as of November 30. This includes all agents and all brokerages at the lake. It does not include For Sale By Owner transactions or private developer sales, but I do think it is useful as a tool for trend analysis.
If we compare that total of 269 sales to prior years’ November totals, we find that it does not look good. We have to go all the way back to 2014 to find a total that low. In each of the seven years after 2014, the market has sold more than 269 homes through the end of November. Another way to say this is that Lake Martin has had the lowest number of homes sold since 2014.
Lake Martin is a second home market. Several years ago, Alabama Power estimated that only about twenty percent of waterfront home owners are full time residents. That means that the remaining 80% are second home or vacation home owners. Our real estate market sales calendar is therefore very seasonal. Traditionally. the bulk of our homes sell March through October, with the months of November through February being pretty scant.
I think December 2022 will follow its normal seasonal trend. I calculated the trend by looking at the past nine Decembers except 2020. Again, it would be inaccurate to take that year in to account. I think it is reasonable to estimate that twenty waterfront residences will be sold in the month, bringing the likely total of 2022 sales to 289. That would place 2022 as the lowest home sale year since 2014.
How will this affect 2023? I am only guessing, obviously. But my guess is that 2023 might be the first year in many years when we see decreases in prices here at the lake. I don’t think it will be a crash, by any means. Our inventory, while increasing, is still below five year averages. I think the lower inventory will serve to soften any temptation to call this a huge price cut. Anecdotally, I am seeing price decreases for homes that are on the market right now. I think these are a sign that some sellers got too aggressive with what they thought the market would bear.
One bright spot in the Lake Martin market this year are lot sales. The year of 2022 will prove to be the third best year ever for numbers of waterfront lots sold.
Third place is not bad, but when you consider that second place is 2021 and first is (you guessed it) 2020, it is easy to see that lot sales are trending downward, also.
In short, the Lake Martin market is “normalizing” itself in a post-Covid world. Yes, it was eye-popping to watch it all happen. But I think we would all be smart to keep 2020 in the rear view mirror and pay closer attention to what the numbers are telling us right now.
Note: I originally published this article in my 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.