Community & Real Estate
Real estate finds a "new normal"

Summer is here and the lake is full of people having a good time.  Even in the midst of all this fun, some people have at least one eye on the economy.  At Russell Lands, that means the real estate market, and one of the most frequently asked questions we hear is, “How is the market?”  That question of course depends on your perspective.

As a seller, the market is tough when compared to the hectic days of 2005-2006.  Those were the high-dollar days when the prices seemed to increase daily.  Lots of people wondered how long the market would last.  There are lots of people that think the real estate “bull market” ended the day they purchased their property, especially if that was in late 2007.

If you are a prospective buyer, the economic conditions of the past two years have created a very attractive market.  The early part of this decade was marked by a low supply of quality properties, increasing prices and a large number of people competing for limited opportunities.  Now the situation has reversed itself.  The supply, pricing and demand have all moved in healthier directions.  Compared to 2006, it looks like everything is on sale.

What has been surprising this year has been the sales pace, which has been robust.  A comparison of the last six months of activity for waterfront property (lots, condos and houses) on Lake Martin to the same periods for the last three years indicates some impressive sales activity. 

That is a 40% increase over last year and roughly 12% below the final year of the best real estate market ever. These numbers come as a result of several things but the most obvious is a decrease in property pricing.

Reduced property pricing is not, however, universal for properties on the market.  There are people that hope that the reduction in pricing is temporary, and that things will snap back.  But after two years of significant price pressure, this adjustment should be considered permanent. And given the above data, it has stabilized. Over the last six months, the average sales price has maintained a relatively consistent and steady increase without the volatility of previous periods. 

Not every property owner has come to grips with the new pricing realities.  At Russell Lands we have consulted with our Preferred Builders to recommend appropriate pricing reductions, which they have accepted.  In many cases this has resulted in very significant reductions, some over 30% (see an example here).  We have taken our advice as it relates to property that we own as well.  We have made reductions in our lot pricing that has created some very attractive purchasing opportunities, especially when you consider our very attractive 4.25% lot financing package.

The new pricing realities are coupled with smarter and more efficient designs.  This June, Classic Homes (120 Stone Ridge) and RLH Construction (225 Cypress Ridge) finished the first new homes in The Ridge that are designed and priced with the new market realities. This new design and pricing is also culminating in a selection of very attractive and exciting new designs for The Ridge and Willow Glynn. 

We hope that, while you are boating around the lake and admiring the beautiful homes in our neighborhoods, you realize the opportunities to own a Lake Martin property have never made more sense. When you look at price, quality, design, selection and value, you will be thankful that you choose this summer as the time to get a place at Russell Lands On Lake Martin.  We think you should explore the possibilities and will be glad you did. 

Welcome to the “new normal” and enjoy the lake.