Market Report: Real estate market climb continues

The Lake Martin real estate market was very good in 2015. In fact, when looking back at real estate history at Russell Lands, we could find only one year where the market was better. That was in 2006. The good news is that sales for 2015 were not driven by speculation fueled by easy credit, as in 2005 and 2006. Buyers last year were the end users and financially qualified at a higher standard.

The waterfront sales volume reported to the Multiple Listing Service for 2015 was $199,250,273—a 36% increase over 2014. There were 434 total transactions in 2015—a 22% increase over 2014! That is a pretty good year by any measurement, and we have been hopeful for a great 2016. In January, the question was, “Will the trend continue?”

Early tallies are excellent
One might say the impressive increases were due to a lackluster 2014, and comparisons to a near record year might be less than stellar. Not to worry. Sales volume for the first quarter ending in March showed an increase of 27.2% year over year, and the number of transactions increased 15.8%. Should this trend continue, 2016 could end up being a record year for real estate on Lake Martin.

Values on the rise
If volume is up 27.2% and units are up only 15.8% (don’t you wish your 401k was up 15.8%?), that means that prices must be higher. They are in fact higher across the board. The average residential property has increased $46,538 over the same period last year. That is exactly a 10% higher average price increase.

This same period last year, the average sales price was 7.8% over 2014. The total increase over the last two years (March 2016 over March 2014) was 19%. It seems like ownership of lake property is a great investment that the whole family can use. It is certainly more fun to own than some tech stock!

Inventory is contracting
One headwind to overall market volume is the number of available properties for sale. At the current sales pace, available inventory is 21% lower than this same time last year. Certain property types are very scarce. Agents report more multiple offers and smaller spreads between list price and sales price. In March, sellers were receiving 96.5% of list price on average, compared to 92.5% last year. Fewer available properties may tamp down overall volume.

Market Predictions
We think that, with the lower inventory levels, many buyers will find that they will have to adjust their budget or their timeframe for a Lake Martin purchase. Prices are definitely affected by inventory levels, so look for average prices to increase. We expect buyers will have stay abreast of newly listed properties.

New lake home construction has been fairly brisk over the last year. Look for the next 12 months to be even busier. The best contractors are reporting backlogs and shortage of quality work force. We recommend that if you want to be in your new lake home May 1, 2017 that you need to be underway by August 1, 2016.

Interest rates are still very attractive. Never have we seen an opportunity to use low-priced leverage to upgrade to a better property. Lender guidelines are still stringent, but a well-qualified buyer can lock in historically low rates for 15, 20 or 30 years.

We make it a priority to monitor the market sales data. We publish a variety of reports, usually in our monthly Explorer e-newsletter. You can subscribe to that newsletter at RussellLandsOnLakeMartin.com/newsletter.