I have never reached the status of E.F. Hutton.
Many years ago, in the analog 1980s, there lived a company called E.F. Hutton. They were “investment advisors” or stock brokers or Wall Street wizards or something. I don’t know.
Back then, there also lived a young boy in a small town who watched a TV with an aerial antenna that could reliably get about three channels. The boy’s favorite shows, pro rasslin events and Kung Fu movies, were sometimes interrupted by E.F. Hutton commercials. Their promotion tagline was. “When E.F. Hutton talks, people listen.” The ads were usually set in a crowded, fancy restaurant. The entire restaurant falls silent when one of the characters says, “My broker is E.F. Hutton, and E.F. Hutton says….” Every person in the commercial is looking at the speaker, hanging on every word, totally focused on E.F.’s advice.
The young boy wanted to command that level of attention one day.
Alas, I became a realtor in the internet age. Advice is free, and everyone is an expert. It is really hard to break through the noise to get your voice heard.
The only time I come even close to that level of attention is when I offer my opinion on how Lake Martin property is valued. I have said it probably hundreds of times to thousands of people, but I still get asked this almost weekly. Since this is the Builders and Buyers Issue, I thought it might be a good time to offer this advice one more time.
This may sound too elementary to some folks. But – sports coaches always tell us to master the fundamentals, right? I think the fundamentals of Lake Martin real estate revolve around understanding the core concepts of how property is valued. My observation is that the Lake Martin market, over many decades, has shown us that it prioritizes view, privacy, location, and improvements, in that order.
The View: Everybody is here for a good view. I’ve never had anybody that comes to me and tells me that they want the absolute worst view of the lake that I could possibly find. Everybody wants the best view that their budget will allow. That would obviously apply to waterfront homes. An interesting thing has popped up in the last three years at Lake Martin. Water view and water access homes have a been a hot trend in the last lately. With the value of waterfront homes rising, many buyers have opted to go for a water view or water accessible home. The cool part of it is, the better the view, the more valuable it is. It doesn’t have to be necessarily sitting on the water to have the view add value. Water view homes that can see the lake will cost more. Those who don’t, don’t. I know it sounds basic, but it is played out in neighborhoods like The Village or The Hideaway that have homes that are off water, but with varying views. The less obstructed the view is, the more the market values it.
Privacy: Everybody’s definition of privacy is a little bit different, but nobody wants zero privacy. As a builder or a buyer, you have to remember to think about multiple sides of the home’s privacy. Always look at the lake side first. The lake side is the most important on Lake Martin. It is why we are here, right? One also has to consider the privacy afforded by the home’s position by car. What is your expectation there? Do you want to be down the end of a country road where all you see is woods? Or are you an Enneagram Seven that needs to have a lot of people around? You need to know thyself and be able to answer this question before you buy.
Location: Yes, I know that the rest of the world applies the real estate cliché of location, location, location, to any situation. I guess it sort of applies here. What I mean by location is neighborhood. The market has shown tendencies over the years to price up for certain neighborhoods. if you’re not in these neighborhoods, you shouldn’t have to pay at their levels. But, I’ve got to admit, in the last five years, especially, this neighborhood premium has been less influential. For instance, five years ago, it was pretty rare to see a home sell for over $1 million if it was outside five or six particular neighborhoods. In 2022, the Lake Martin Area Association of Realtors reported that about 100 homes sold for over that amount. These homes were located all around the lake.
Improvements: By improvements, I mean the house, the dock, or anything else that you build on a lot. The trap that a lot of buyers fall into is taking the price and dividing it by home’s area, yielding the price per square foot. That is the number one most misleading statistic in the history of Lake Martin real estate. Many a homebuilder was bitten by this in 2007 when they discovered that their spec homes were overpriced. Similarly, I have seen more buyers make mistakes using that statistic than any others in our area. Because the first three factors in this list carry so much weight, it can easily make the price per square foot into a meaningless statistic. My advice is to ignore price per square foot. Instead, consider what the appraisers and realtors use – the sales comparison method. That’s a fancy way to say “just look at other comparable homes and adjust for the differences.” The trick here is finding good “comps” or comparable sales.
Bonus Tip: What about pools? There was a very interesting conversation recently on the Lake Martin Boaters page on Facebook. One of the group members put out the opinion that a having pool at a waterfront home greatly adds to that home’s value. I disagree. My advice on pools is that they do not add value to a Lake Martin waterfront house. History has shown us, looking through the last sales of the last 20 years, that the market does not price up for the existence of a pool. However, I usually add that if you do not plan on moving in the next three or four years, and you really want one, go for it. Just don’t expect it to add any value to your home. One of the dissenting opinions was that renters really like pools. Since the rental market is a growing influence at Lake Martin, pools could be a positive influence on value in the future.
Honestly, I don’t know. Maybe it will. Only time and sales will tell.
I know I don’t sound as confident as E.F. Hutton when I say that. Maybe that’s my problem!