We are two months into the COVID-19 era, and I have been watching the market closely to gauge the effect of the pandemic on Lake Martin waterfront sales. Since the first of March, I have morphed from pessimistic to amazed – with periods of skepticism and surprise – by the sales record for waterfront propertues.
I am a veteran of multiple recessions, so what I expected after the stock market cratered in March was fewer sales, potentially many fewer, and an increase in listed properties. I also expected that people would do as instructed by the president and the governor and they would shelter at home. But as in all previous recession events, I was wrong about what was going to happen.
I write monthly articles about the market for Russell Lands On Lake Martin and Lake Martin Realty’s newsletters. Each month, my normal report compares activity using a 12-month rolling average. Looking at the last 12 months ending in April, for instance, shows a 22.3 percent increase in gross volume, year-over-year.
That is a great number, but I realized that most of that volume was either closed or pending closing before the onset of the pandemic. To aid our clients and our company in decision-making, I needed a metric that would give an indication of how COVID-19 was actually affecting the market in real time.
We began tracking new contracts written on a monthly basis versus the same period last year. So far, the results have been amazing.
A look at the numbers
For March of 2019, the local MLS reported 25 properties as going under contract (new sales). Total list price for those properties was $13,539,050, with an average list price of $541,562. In March of 2020, the local MLS reported 24 properties as going under contract, with a total list price of $15,652,524 and an average list price of $652,188. *
For April of 2019, the local MLS reported 35 properties as going under contract. The total list price for those properties was $22,777,300, with an average list price of $650,780. In April of 2020, the local MLS reported 35 properties as going under contract, with a total list price of $22,624,285 and an average list price of $646,408. *
Over the first two months of the COVID-19 era (March and April), the total new sales are 60 for 2019 and 59 for 2020. Total list price volume for 2019 was $36,316,350, and for 2020, the list price volume was $38,276,809.
We will not know what the total sales volume looks like on a year-over-year comparison for several months since sales prices are confidential until closed. We believe, based on our involvement in contract negotiations, that sellers are getting near-list prices on new contracts. That is an important indicator of a healthy market.
Other positive observations
I noted above that I expected people to obey the president’s and the governor’s orders to stay at home, but it did not occur to me that could mean people would stay at their lake homes. We have seen more people than ever at Lake Martin for March and April. In fact, there were a couple of weekends when I expected 4th of July fireworks.
I also have been listening with interest to reports from other area businesses. Marinas are working at mid-summer business levels; contractors are wide open; building suppliers are surprisingly busy; and local grocery stores can barely keep the shelves stocked.
Back on the real estate front, I have noticed that, because people are using their lake homes more, they are less willing to part with them. This has caused a shortage of available homes that could be purchased. At the end of April last year, there were 286 waterfront residential properties for sale. This year, the supply has dropped to 173 properties for sale.
I hope you have found this report encouraging and helpful. In the weeks and months ahead, please stay safe as you socially distance at Lake Martin, and stay tuned as we track the market.
* A detailed list of the properties reported as new contracts for the months of March and April of 2020 to the Lake Martin Area Association of Realtors MLS by its member firms may be found online at https://www.russelllandsonlakemartin.com/blog/. You will find the reports under Monthly Sales Details.
Steve Arnberg is Vice President Real Estate Sales for Russell Lands On Lake Martin. For more infoamtion, contact him at 256-329-0835.