Inventory of Lake Homes Nearly Dried Up

Shortage of available lake homes changes market trends

If Lake Martin was like available inventory, it would look like it had dried up! The inventory of available lake homes has reached historically low levels. As of December 31, 2018, there were barely 100 available lake homes on the market. That means there is only, on average, one lake home for sale for each eight-mile stretch of Lake Martin shoreline.

At the current sales pace, we have only a 5.56-month supply of listed homes. That means without any new listings, we will be out of available homes before Memorial Day!

Values on the increase

As one might expect, smaller supply is increasing prices. The average price for a Lake Martin home at the end of December 2018 was 11% higher than the same period the previous year. It is really good news that real estate on the lake is outperforming most other investments. A lake home has an additional benefit—it is definitely an investment the whole family can enjoy! (You can’t swim in that Apple stock, can you?)

Lower inventory leads to lower sales levels

While average prices are on the rise, the gross dollar volume for the sale of single-family waterfront homes is decreasing. Because of lower inventory, gross sales volume for the 12-months ending on December 31, 2018, dropped 9.9%. We looked at the current number of available homes, and, even if every home sold (which will not happen), sales volume will be 7.2% lower than last year. Clearly, more properties will have to come on the market to increase sales volume.

Why the shortage of homes? Several reasons—the first is that very few homes were built during the recession. The second reason is that an improved economy increased the supply of buyers who, in turn, purchased the then-abundant supply of lake homes. The third, and possibly the biggest reason, is that people love Lake Martin and will not easily part with their lake places!

Building becomes an option

When people want a lake home, they look for options. When inventory levels reduce options—or when prices increase to a certain level—people shift from purchase to construction. Sales for waterfront homesites in 2018 increased 30.2%. Instead of waiting for a home to come on the market, 69 families decided to buy a lot and build their dream lake home.

While inventory of single-family homes dropped to historically low levels, available homesite inventory actually increased in 2018 with the addition of newly developed lots. Given the increased demand for waterfront homesites and the long lead time for development, that inventory will likely evaporate by mid-summer as well.

What to expect

We expect that buyers will be pressured to shop early, act quickly and prepare for multiple-offer situations. We recommend that you work with a knowledgeable real estate professional, so you have someone actively looking for property on your behalf. The best properties—that is, those with the best location, in the best condition and attractively priced—will go quickly.

Our sales executives, Rhonda Watson and Emily McDaniel, stay on top of the market. Please don’t hesitate to reach out to them for anything related to real estate. As the exclusive agents for Russell Lands On Lake Martin, they have access to the finest properties on Lake Martin. Contact them at 256.215.7011.