6 Crucial Changes Coming To Lake Martin Real Estate
As the Lake Martin real estate market shifts to a buyers’ market, away from sellers, what does this mean? If you are about to sell or buy waterfront property, how can you use this to your advantage? What changes can we expect? We can guess a few possibilities from studying other markets around the nation that have been experiencing this phenomenon for a longer period of time. I’m not saying that all of these will happen, but they are strong possibilities:
1. More pizazz from sellers - there are 5 times as many waterfront properties for sale now as there were in 2005. More competition means Lake Martin sellers need to do more to get noticed and get paid. Some examples:
a. more pictures - too easy not to do it
b. home staging- a must
c. talking homes - look for a sign on the home that says “tune in to FM XX.X for more info” where a commercial is played over and over
d. text message info for homes - like the talking homes above, they have a “for more info text #12345″ rider on the sign
2. Builder incentives to buyers - Builders who have extra spec homes sitting unsold are always among 
the first to slash prices. Some Lake Martin builders have already started doing some of the below:
a. free TVs
b. free boat storage
c. pay for first 3 months’ mortgage payments - haven’t seen this one yet, but just wait
d. extra commissions (above the 6%) to the realtor that brings the buyer. As a buyer, you need to ask your realtor if such an incentive exists. Not that that would affect your agent’s impartiality, of course……..
3. Less downward pressure on realtor commissions - A buyers’ market exposes the pretenders from the listing agents that really know how to market. If the sellers feel that they can pay the popular 6% in commission and have their waterfront home sell, instead of languish unsold for a year, they are less likely to go for the cheapest “low bidder.” In the Lake Martin sellers’ market up to 2005, sellers had so much influence they could almost name their commission. Not so now.
4. Proliferation of buyers’ agents? Since buyers hold the cards on Lake Martin now, many agents may shift their marketing focus to buyers. Some agents may even pitch themselves as exclusive buyers’ agents, refusing to list homes for sellers. In extreme buyers’ markets in other locations, they even go so far as to advertising that they will give part of their commission as a rebate back to the buyer. Could this happen at Lake Martin? It’s possible, but doubtful, I think.
5. Reduction in effective FSBOs - FSBO or For Sale By Owner - (pronounced FIZZ-bo) - again, in a sellers’ market, it was a lot easier for Lake Martin waterfront sellers to go it alone. Stick a sign in the yard, and get twelve offers tomorrow, right? Now that there is more supply out there for sale, it’s a lot harder to get it done, even for agents. See #1 and #3 above.
6. No change in BUDDY-BOs - I define “buddy bo” as sales by owners directly to that buddy or relative 
that told them “hey - if you ever sell that house on Lake Martin, let me know.” OK, so it’s not a change. But maybe the lack of change is crucial. These type sales are not as dependent on market conditions so I really don’t see a huge change here.
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2007 Is Russell Lands’ 2nd Best Year On Lake Martin
This year has been good to Lake Martin developer Russell Lands.
Broker Steve Arnberg was interviewed by the Opelika – Auburn News recently about the sales trends on Lake Martin. Arnberg said that, while low water levels on Lake Martin had affected sales, this year was still strong enough to qualify as their second best.
Arnberg is quoted as saying “It’s not as good as last year and we can’t necessarily say why, but (sales) are as good as the year before.”
I assume that means that Russell Lands has sold about the same amount of Lake Martin waterfront property this year as they did in 2005, but not as much as they did in 2006.
My questions on this:
1. What do you mean by Lake Martin “sales?” Does he mean the dollar value of total sales? Or the number of waterfront lots or homes sold?
2. Why can’t he “say why?” I have already written in earlier posts about the number of Lake Martin waterfront sales declining in 2007, and that I think it is mostly related to over pricing by sellers. Does he disagree, or has he not figured that out?
3. Why doesn’t Russell Lands publish its sales figures for Lake Martin? The entire Lake Martin 
market is down 35% from last year, yet Russell Lands is having its second best year. How? I realize that they sell plenty of waterfront lots that they don’t publish in the MLS. For instance, when they opened Phase III in The Ridge, they sold lots to buyers themselves, so the data doesn’t come through our MLS. I affirm their right to do that. It’s very possible that they sold so many of their new Ridge lots that they are having their second best year ever. So why not publish, or at least mention in this interview, what they mean by “second best year?”
Russell Lands is far and away the biggest developer on Lake Martin. Naturally, as they own one half of the 700+ miles of shoreline. I’m not so nosy to think that they should tell us every penny that they spend and make. They are a private company. But, I do think it would be helpful if they gave general sales totals in number of properties sold and dollar value thereof. For instance, they could say that they have sold 40 of 100 lots in the new phase of The Ridge at an average price of $600,000. It would shed more light on the reality of the Lake Martin real estate market, and therefore benefit them, as they are this market’s biggest landowner.
Lake Martin Real Estate Spotlight: The Ridge Update
The Ridge – Russell Lands’ newest Lake Martin development – is near to completing its Ridge Clubhouse and Pool Area, while Phase III construction is ramping up.
I popped by The Ridge last week to look at some lots in Phase III. Phase III – which stretches south towards the Dixie Sailing Club, which is Lake Martin’s largest sailing organization. Phase III already has a few spec homes on the MLS, and builders are already started a few custom builds.
Originally, Russell Lands had planned to move Dixie Sailing Club out of The Ridge to their new digs by Labor Day 2007. But this letter from Russell Lands General Counsel Steve Forehand has forestalled that trail of tears until Labor Day 2008. Maybe they made this decision because sales in 2007 have not been as brisk as 2006. Who knows. The fact is, the old salts at DSC have one more year.
While I was checking out the view of Lake Martin from some new lots at The Ridge, I stopped by the Ridge Club to see how construction was going. As I stated in this earlier post, I really must say that The Ridge Club will be very nice when they are done. The pool area is comparable to many area country clubs, with a resort style, multi leveled, no sharp angle feel.
Inside The Ridge Clubhouse will be nice, too. I am a sucker for big stone and big wood, and the architecture in here looks like something out of Rohan. I’m loving it.
Check the numbers here; now is a great time to be a buyer in The Ridge. Need help?
Related Posts:
Free Boats at The Ridge Boat Show & Spring Home Tour
Lake Martin Real Estate Spotlight: The Ridge
This Man’s To Blame For Slow Lake Martin Market
The Lake Martin real estate market has slowed way down - it’s no longer a sellers’ market. Who is responsible?
One man - Adam Smith.
In 1776 Smith established himself as one of the most influential economic philosophers when he penned Wealth Of Nations. He described the natural economic forces that have existed since the caveman wanted to trade his neighbor one rock for two bones. OK, so maybe he’s not responsible for the slowdown, but he was the man who so eloquently described what is - Supply and Demand.
That’s right - the Lake Martin real estate market has slowed down because of simple supply and demand. Not because of the drought. Not because of the Army Corps of Engineers, not Alabama Power, not Russell Lands. Mr. Smith’s omnipresent Invisible Hand has suppressed the number of waterfront closings. In the 12 months before August 1, 2005, there were 386 waterfront closings. In the 12 months before August 1, 2006, there were 346. In the last 12 months, that number is down to 226. Looking back, the summer of ‘05 was the peak. Face it. There are fewer waterfront closings this summer. But why? In a free market, the more accurate question to ask is always ..
What has affected supply and demand?
SUPPLY:
Easy explanation here. Waterfront property has been on an unprecedented run since 1999. Prices have skyrocketed. Whether we’re talking waterfront property or widgets, more people are willing to sell at higher prices. While supply will always be fixed (Lake Martin ain’t gettin no bigger), the quantity supplied this summer is higher than in 2005. At the peak of the sellers’ market in 2005, there were only 126 waterfront properties for sale. Right now we have 603. Per se, that might not contribute to a slowdown, but when taken in conjunction with…..
DEMAND:
As inseparable as yin and yang, you must consider both supply and demand in any free market evaluation. 
So where are all the Lake Martin buyers? Anyone could tell you that they must be scared away by the increase in prices since 1999, but is it a true downward demand shift? Are fewer buyers interested in Lake martin waterfront property now? Or is it simply a decrease in quantity demanded?
Has the drought, low lake levels, and high prices removed buyers from the market? Is that why there is a surplus? I think not. Anecdotally, I am talking to more buyers now than I was in 2005. Buyers that I talk to are not phased by the low lake level. They understand that it is a 50 year anomaly. Sure, I think that the drought has affected it some, by removing potential buyers out of the pipeline before they ever talk to realtors. But I don’t think it has affected demand that much. So I don’t think we’re experiencing a demand shift.
I think the Lake Martin buyers are still out there. There are still plenty of folks who want waterfront real estate, but they want it at lower prices. Case in point: the condo auction at Harbor Pointe. 20 waterfront condos were sold in three hours, when in the previous 12 months, only 34 had sold on all of Lake Martin. Why? Price. The exact same condos that were listed on the mls at $420,000 sold at the auction for about $250,000. This jives with my anecdotal evidence - from talking with buyers. Plenty of people want to own Lake Martin real estate, but not at a crazy price. This extends across all market segments - lots, condos, deeded lot homes, and leased lot homes.
SO WHAT?
So what does this mean? It means that buyers can exert their influence more strongly, by seeking out better values with research. Don’t expect prices to return to the 1990s. But buyers can find decent buys if they know how to research and if they let a good realtor help them. Click here if you need help.
Lake Martin waterfront sellers need to get realistic. Don’t price things based on what you wish you could get - check the numbers on sold comparables. Hire a good realtor (read: me) that will aggressively market your property - and it will still sell, trust me.
Related Posts:
Proof Of End Of Selllers’ Market On Lake Martin
