The patient is doing just fine, thank you! Just a few years ago, the health of the Lake Martin real estate market (like the rest of the country) was anemic. Depending on your point of view, the real estate market was either weak or on life support. From 2008 to 2013, the market was in recovery mode. To borrow another term from the healthcare industry, the market was moving from life support to rehab. Now, the market is VERY HEALTHY INDEED!
Impressive Vital Signs
In the 12-month period ending July 31, 2014, the MLS reports that 356 Lake Martin waterfront properties were sold. That is an increase of 72 properties from the prior 12-month period. Last year, most Realtors® thought the sales rate showed a very healthy market, so an increase that large is remarkable. This trend certainly has momentum as the 2008-2014 rolling sales averages chart shows. (See chart below.)
But a little deeper dig into the numbers reveals a broad improvement in Lake Martin Real Estate. We carefully watch three key sales categories: Gross Dollar Sales Volume, Number of Transactions, and the Months of Supply of “For-Sale Properties.”
Gross Volume has Increased
Total residential sales up – 14.2%
Single family detached up – 18.1%
Lot sales up 19.1%
Number of Transactions has Increased
All residential – 25.1%
Single family up – 33.3%
Lot sales up – 26.4%
Months of Supply is Improved
All residential – down 25% (this is a 5.13 months lower supply)
Single Family – down 29% (this is a 6.79 months lower supply)
Lots – down 20% (this is a 7.83 months lower supply)
Future Prognosis
So the market lived – the market recovered. The question is, will the market continue to thrive or will there be a relapse? Most likely, you will see the gross dollar volume improve slightly. Inventories will continue to shrink as unit sales increase slightly as well. Most importantly, tighter supply eventually will lead to higher prices as buyers have to compete for fewer properties.
Waterfront home sites will sell at an even faster rate. Construction activity is evident all over the lake – especially in The Ridge. This pace is aided by the re-emergence of available credit. Just over a year ago, financing for building lots was virtually non-existent. Now, there are multiple area banks providing attractive loan packages. One time construction-perm packages are also available. This type of financing provides attractive construction lending that offer long-term financing at today’s low rates.
So, the final prediction is for more modest improvement in gross sales volume and unit sales with lower available inventories of finished lake homes this time next year. More home sites will sell with new custom construction following closely behind.
One thing to think about, at some point lot inventory will decrease and the cost of borrowed funds will increase. So the prognosis is clear – act now before inventory reduces, prices increase and interest rates creep up from the current historic lows.
09.2014
