Photo credit: Ed Willcoxon
Expect Alabama's lake home market to heat up, as inventory declines in some areas
Topics: Residential Real Estate
As the winter weather in Alabama continues shifting between sunny and stormy, the much appreciated warmer weather is causing many to begin anticipating the joys of summer.
Cooking on the grill, playing games with friends, wake boarding and water skiing are activities that some Alabama families are gearing up for as spring will soon be calling some to their family lake home.
“Right now, the market for lake homes in Alabama is wide open,” said Justin Dyar of Lake Homes Realty, LLC. “After the holidays, people start getting lake fever again and numerous boat shows start popping up across the state. When people see boats, they start wanting a lake house. There’s new buyers, new listings and the weather has been awesome for our business."
Click here for Lake Martin's area Market Snapshot from the Alabama Center for Real Estate
Realtor John Coley of Lake Martin Voice Realty says 2016 was a great year in the area that he covers in and around Lake Martin.
“2015 had the highest number of home sales ever recorded in our MLS at 354, with 2016 down about 15 percent at 301, but still remaining the second best record of number of homes sold,” Coley said.
However, with the decline in sales, Coley said it is important to remember the decline in lake home inventory throughout 2016.
“If we take a snapshot of the number of homes for sale at the end of each year, it turns out that December 2015 had 270 versus 247 in December 2016. That’s an almost nine percent decrease, and once we consider this fact, maybe the loss in sales to 2015 doesn’t seem as dramatic,” Coley said.
With inventory declining as more families seek to purchase homes and properties on Lake Martin, it is crucial for Realtors to understand the type of home buyers are seeking in the 2017 market.
“It really depends on how knowledgable a buyer is on owning a lake property,” said Steve Arnberg, vice president of real estate sales for Russell Lands on Lake Martin. “If you have someone who has spent a lot of time on lakes, their main focus is going to be on how good the land is itself. If you have someone buying their first lake home, they will probably be more interested in the features of the house. A lot of times when buyers begin looking, they think they will be able to do more with their budget, so it becomes a really educational process of learning what a lake home will provide them."
With the average lake home selling for $380,000 at 2,000 square feet and with three bedrooms, according to Dyar, the functionality of lake homes has become a key selling point for prospective buyers, along with the ease in which homeowners can access their property.
“A lot of people have sold beach properties and are buying at the lake due to lower insurance rates than beach properties, and also because they have found their second homes in other areas are too far away,” Dyar said. “The typical buyer is within a two hour radius of the lake, such as Huntsville or Birmingham, but we’re also seeing a lot of buyers come from Nashville, Memphis and Atlanta.”
Buyers who are considering purchasing a lake home will need to act quickly in 2017, experts say.
“We have the lowest inventory for single family detached homes on Lake Martin since 2003,” Arnberg said. “People who are looking at lake homes are going to have fewer things to choose from and will have to compete more for properties. We’ll be seeing many cases of multiple bids for homes. Buyers will need to move sooner during February through April if they want to see the most properties available."
Rather than purchasing homes, many are seeking to build at places like Smith Lake in north Alabama, as well as purchase land in these areas, Dyar said.
“New construction on the lake has quadrupled in the last four years,” Dyar said. “We’re even seeing a couple of new developments where you have community style living, which doesn’t work for everyone but also creates an experience that is low maintenance. You can come to the lake and enjoy yourself without worrying about cutting the grass while you’re away."
As for 2017 projections, Coley says he’ll be keeping a close eye on the first quarter sales at Lake Martin. Coley is a firm believer in comparing the current month’s number of homes sold versus the same month in the prior year.
Month-to-month comparrisons often do not give a completely accurate view of the market due to seasonal and other factors.
“If you see a market that is consistently losing on a monthly basis to the prior year, look out," Coley said. "On the flip side, if the current year’s months are steadily victorious, that’s per se an increasing market. That’s how we pegged the exact month that the Lake Martin market turned around in July 2008. Even though prices continued to decrease, that was the month that the current year started outselling the prior year."
Overall, the 2017 market for Lake Martin is expected to be a seller’s market, Coley said. With 800 miles of shoreline and two new restaurants on the lake, Lake Martin offers the amenities most buyers are looking for when searching for that place on the lake.