Tell Your Realtor To Shut Up And Listen To You
I grew up on Lake Martin, in the real estate business. I know what I like. I know which parts of Lake Martin I prefer. I have been all over this lake, and have friends in every corner. But guess what…
No one cares about that.
Especially my clients… nor should they.
One of the first things my dad taught me about Lake Martin real estate was “don’t show them what you like, show them what THEY like.” Simple but true.
The key to helping people be happy with their waterfront property is to focus on what they think, not you.
A realtor’s local knowledge and experience does matter, but only to the extent that they use that to help their clients get what they want. There are all kinds of buyers out there.
Some Lake Martin buyers prefer Kowaliga Creek to Blue Creek. Some prefer the Preserve at Stoney Ridge to the Ledges at The Ridge. It doesn’t matter what I prefer.
On the selling end, in order to be the best listing agent, I must look at a seller’s lake home with the eyes of an unbiased buyer, not filtered by my own preferences. I have to market each home based on its own unique properties. You don’t market a condo in Stillwaters the same way that you do a cabin in Little Kowaliga.
So how do you find out what people want? You shut up. You ask a good question, then you shut up and listen to their answer.
Not that I am perfect at this. I constantly have to remind myself to be quiet and listen. I make it a habit to ask specific, dialog inducing questions - not “did you like that waterfront lot?” - rather “what about that lot did you like?” The latter helps me understand their reasons instead of just logging a result.
The more I learn about the client, the better I can help, and the happier they will be.
I believe it was jazz great Dizzy Gillespie that said, “It’s taken me much of my life to learn what notes not to play.”
Amen, Dizzy.
Lake Martin Is High, But So Is Real Estate Inventory
Spring rains have filled Lake Martin faster than almost anyone expected – in the first 3 months of 2008 we went from bone dry to runnething over. Will the waterfront real estate market bounce back in three months, too?
Not likely. There is still a lot of inventory to sell which I think will continue to make 2008 a great time to be a buyer. To wit:
A comparison of the first quarter sales in 2008 shows that in the entire Lake Martin residential waterfront market on the MLS(*), there were fewer sales this year than in 2007.
If you look back to the post where I reviewed Lake Martin waterfront sales in 2007, you will remember that January – March 2007 saw 43 waterfront properties sold:
The same statistics in the first three months of 2008 in the Lake Martin MLS shows sales of only 17:
Is it time for sellers to to give up? Will 2008 see only 58 waterfront homes (17 * 4) sold? Of course not. History shows us that the four months February – May of every year counts for almost 50% of residential waterfront sales on Lake Martin. We still have half of that critical period to go before we get a better prediction on 2008.
Also remember – January and February 2008 sales were also affected by the drought. Just look at news reports from that period – they were dire. Some people openly wondered if the lake would EVER come back. The water level really didn’t start shooting up until the last week in February – when it rose a whopping 4 feet in 7 days. Since then, spirits have been buoyed and more buyers are crawling the coves.
So can sellers relax? Will Lake Martin’s water level comeback springboard the real estate market back into the raging sellers’ market of 2005?
Not likely.
There is still a lot of inventory. There is a lot of competition for the buyers’ attention. It is still very possible to sell in this market (the fact that my lights are on testify to that fact). I am telling all of my sellers that we must continue with intense focus on the golden trinity of real estate: pricing, marketing, and staging. As a seller, you must do all 3 exceptionally well in order to sell on Lake Martin right now. The sellers who get overconfident now will be the last to sell this year, guaranteed.
Are you considering selling your waterfront property now that Lake Martin’s water is up? Or maybe you just wonder how the last 24 months have affected its possible value? Call or email John for a no guilt, no hassle, pain free Comparable Market Analysis. See the contact info at the top of this page. If you don’t want to sell after we talk, no hard feelings – I promise.
(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of Realtors’ Multiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all sales on Lake Martin.
Lake Martin Property Taxes - It Pays To Do Your Homework
Lake Martin waterfront property owners are in one of three counties – Tallapoosa County, Elmore County, or Coosa County. If you’re considering buying on Lake Martin, and are curious about property taxes, you would need to research all three counties to cover of your bases.
There are some similarities, however, in that they all are governed by the state of Alabama’s property tax laws. The property tax fiscal year in Alabama runs October 1 - September 30 every year. So the property taxes you would pay by December 31, 2007, were generated based on a snapshot of value taken on October 1, 2006. Here is some info for further research:
Tallapoosa County – Click here for a link to the Tallapoosa County Tax Assessor. The office number is 256–825–1046. Click here for an online calculator for Tallapoosa County taxes. It is a really good tutorial of how to translate assessment and millage rates to the actual taxes you might pay. They use an example of a $100,000 single family home, not in city limits, which yields a tax of $300.00 per year.
Elmore County – Click here for a link to the Elmore County Tax Assessor. The office number is 334–567–1184. Click here for a link to their explanation of rates and here for the millage rates.
Coosa County – At this writing, Coosa County does not have its own website. Click here for info. The Revenue Commissioner is Charlie Luker, and is a heckofa nice guy. His number is 256–377–4916. Their rates may be a tad different from Tallapoosa and Elmore, but for planning purposes, they are about equal.
Online Research
All three counties employ third party websites to publish their property tax map and owner information. The online sites are very useful, but take caution. The best way to determine current ownership is to do a deed search at the courthouse. Also, most of the time the lot lines are generally correct. But the best way to know your lot lines is to get a professional survey.
Many times the info online will only give you who was the owner on the previous October 1. That said, sometimes the counties update a sale as the year goes along. Consider if John Doe owned a property at 10-1-07 and sold on 1–10–08 to Bob Smith. Many times I have seen where the will leave John Doe as the owner but have Bob Smith’s name and mailing address in the mailing address slot. Then when the next year rolls around, they bump John Doe off and Bob Smith is property owner. But this is only a case by case observation.
Need Help?
If you are thinking about buying waterfront property on Lake Martin, and need some help in sifting through all of the Counties, school districts, and tax zones, I would be glad to help you estimate what your annual property taxes might be. As compared to other states, property taxes in Alabama are pretty low, so hopefully it will be a nice surprise. Email me, come by my Kowaliga office, or call my number at the top of this page. I would be glad to help you out.
Lake Martin Real Estate MLS Statistics - 2007 In Review
The Lake Martin real estate market suffered a major slowdown in 2007 for a variety of reasons. I dug through the sales results in the Lake Martin MLS to attempt to cut through the gossip and analyze the numbers.
In 2007, the number of Lake Martin waterfront homes sold was about 35% less than in 2006. 2006 was about 17% less than the peak of the sellers’ market in 2005:
Witness the Transformation From Sellers’ to Buyers’ Market:
In 2006 and 2007, the number of Lake Martin waterfront homes that were added as new listings to the market out paced those that were actually sold every month. Therefore sales inventories ballooned, and this 24 month period proved crucial:
More Analysis Of Waterfront Homes Sold in 2007:
153 Lake Martin homes sold in 2007. Of those, 114 were homes and 39 were condos. Of the 153, 142 were deeded lot homes and 11 were leased lot homes.
Prices of Homes Sold in 2007:
Of the 153, 13 homes were listed as having sold at $0. This happens sometimes. Most of the time it is at the request of the seller. A minority of people don’t want “their business” on the MLS. Sometimes it is a builder that doesn’t want to publish how far he dropped the price. So the below statistics will only deal with the 140 that sold and published prices:
The most expensive home sold was for $3.88 million in The Ridge. The lowest was a manufactured home on a leased lot in Pleasure Point for $25,000.
LOTS:
Sales of waterfront lots on Lake Martin were also affected in 2007. In total, 37 lots were sold in 2007, as compared to 55 in 2006. The monthly sales numbers are:
As the numbers point, out, now is a great time to buy Lake Martin waterfront real estate. Do you need help finding the best deal? Let me show you around..
Or do you own Lake Martin property, and are wondering how all of this news affects your particular situation? Call me, I will be glad to give you an idea of how the changing real estate market will translate to your bottom line. No cost, no pressure, no kidding.
Still curious about Lake Martin real estate statistics? Leave a reply below and suggest how you would like me to slice and dice the numbers.
Disclaimers: All of the above info was taken from the Lake Martin Area Association of Realtors’ Multiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all sales on Lake Martin.
Local Lending Would Have Helped Mortgage Mess
The Lake Martin real estate market has not really felt a direct effect of the mortgage meltdown yet. Sure, the subprime fiasco has caused conventional and jumbo rates to rise, but I consider that indirect. By direct effect I mean huge waves of foreclosures from high risk loans, and we haven’t really seen that on Lake Martin up to this point. I don’t think we will see as much of that here as was seen in other markets, because I don’t think that many of the 2004 and 2005 sales were fueled by speculators. A quick trip to the Tallapoosa County Courthouse last week confirmed the low foreclosure rate.
This is not true of other markets around the nation. Headlines like this abound: “Fraud Seen As Major Driver In Wave Of Foreclosures.” In a subject this big, there is a lot of blame to go around: borrowers who falsify their income to buy a home they know they cannot afford, unscrupulous realtors selling for commissions instead of trying to educate clients on wise home buying, dial-a-dollar appraisers who will sell their integrity for $400 a pop, and downright dirty mortgage brokers who churn up new paper and burn families in their wake.
Basically, in many of the cases I think much of this could have been avoided if buyers had stuck with local lenders.
I know this sounds naive of me. Sure, the mortgage industry has changed in the past 10 years.
I know, I know, huge national companies can loan you money no matter where you buy, from Alaska to Port Orange. Sure, because of the internets they can offer low low rates with no no documentation.
So why go with your local yokel lender?
And how would local lending would have helped this mess?
First of all, it’s true, huge national companies can make mortgage loans anywhere with great rates. But the opposite is also true - local banks can tap national rate markets, and almost always match the best rate you can find on the internet. Plus their closing costs are usually lower, at Lake Martin, or anywhere else.
Secondly, more local lending would have helped because it’s human nature to care more about the person you know than you do about some number that’s three states away. If you’re a buyer, would you try to convince your local banker that you can afford a caviar home when she knows you can barely make the payments on your Gremlin? And if you’re a mortgage lender, how willing would you be to give a buyer a loan that you know you will have to foreclose in three months, if your wives are in the same bunko group? If you’re an appraiser who’s on the edge, wouldn’t it be easier to lie to an out of state lender versus one that you sit by at every Friday night football game?
I am not suggesting that we all turn the clock back 40 years and only deal with the bank on the corner and that we all have a credit account at the Feed n Seed. Shareholders pressure banks to make lots of loans, and to do that, they must venture out of state. I get that. But maybe this latest mortgage scare will cause lenders to return to common sense lending.
All Real Estate Is Local (This Means You, Lake Martin)
Life as a Lake Martin area realtor means I hear (and try to answer) lots of questions. One I get regularly is:
“I saw on CNN where home prices in (fill in here with name of huge city 3,000 miles away) are down 75%. All the sellers are being foreclosed on their sub prime mortgages. It’s spreading across the nation like locusts. When will Lake Martin be on sale like that?”
My answer – probably never.
It’s because All Real Estate Is Local. Including (and especially) Lake Martin.
A couple of days ago I read a great post on the WSJ Developments Blog entitled “There Is No National Housing Market.” Also another good one with the same title on the Matrix Blog. Basically they point out that while all markets are influenced by things like the mortgage market, most pricing and activity in the real estate industry is due to local factors. What might be true for rent on the west side of Manhattan won’t set the price in the middle of a Edward Scissorhands-esque subdivision in Tampa.
The “locality truth” is especially evident on Lake Martin. We have about 770 miles of shoreline, but only about 30% of it is developed. Of the undeveloped waterfront property, 99% of it is owned by only two companies: Alabama Power and Russell Lands. They are very good at not flooding the market with too much supply, which helps hold prices up. Think the De Beers diamond cartel.
Another truth about Lake Martin real estate is that you don’t have huge developers selling 
hundreds of spec homes in one subdivision at a time. Sure, there are some builders with $5 million in unsold homes – but that amount is concentrated in 3 homes. Sure, some builders are hurting, but not enough to affect the market (yet). And they’re not hurting because of some national phenomenon, but because they themselves have raised their prices too high too quickly. Simple supply and demand. Moreover, most waterfront property for sale right now is by private citizens, not builders, whom are not under too much pressure to sell.
I agree, the sub prime mess did not help Lake Martin waterfront sales in 2007. But it wasn’t a majority player. The majority of the slowdown was due to unrealistic sellers, with a minority influence of the drought thrown in for good measure. Odds are pretty good that it will straighten out in 2008, and 2009 will be the start of the next seller’s market.
So why aren’t the talking heads reporting this? I guess media reports that are numbers based and rational don’t pull those huge national ratings.
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Lake Martin Real Estate Spotlight: Eagle’s Point
One of Lake Martin’s newest developments – Eagle’s Point – has a model home that is ready to see plus several other spaces for lots.
Located at the easternmost end of Coosa County Road 20, Eagle’s Point has big water views looking southeast at the junction of Parker Creek and Kowaliga towards Willow Point and Sand Island.
Density: Phase I of Eagle’s Point has a total of 11 homes planned. Each home will have and its own pier. They have already cleared out the home sites, so if you drive by boat or car, you’ll see the phase I area. The planned Phase II extends east, across the causeway towards Veazy’s Marina. There are 20 planned homes in Phase II. A Phase III of interior lots is also planned.
House Plans: Eagle’s Point offers three different house plans. There are 2 plans with 3 
bedrooms and 2.5 baths. One plan has 4 beds and 4.5 baths. All are three stories and have at least 2,500 square feet.
Builder: All the homes will be built by Lake Martin builder Sammy Ransome. You cannot bring your own builder.
Pricing: The smallest home on lots 4 and 5 go for $980,000. The 2,762 square foot 4/4.5 is priced at $1,175,000. Right now there are 2 on the MLS – lot one (a 3/3.5 and 2,762 sf) priced at $1,115,000 and lot two (4/4 at 2,762) priced at $1,150,000. Prices like these put it in a similar to other Lake Martin developments like The Ridge and Willow Point.
Amenities: Eagle’s Point will have a gated entrance, private beach, common area fire pits, community dock for guests, golf cart parking by boat launch.
Directions: Eagle’s Point is in the Coosa County side of Lake Martin, at the end of Coosa County Road 20. Google Map to Eagle’s Point
Lake Mag Interview: The Uncensored Director’s Cut
Lake Martin Magazine interviewed me a couple of weeks ago about the effect of the drought on the Lake Martin real estate market, and general trends affecting buyers, sellers, and realtors. They included it in an article called “Special Report: The Water Issue” in the November 2007 issue. I thought Nikki Reeves and Kenneth Boone did a good job of covering a huge topic.
While they didn’t publish the entire interview, they did use a couple of nuggets, and managed to add in a compliment to me. Here’s the entire interview, with the parts that Lake Magazine used highlighted in yellow:
Lake Magazine: Has the lake level affected your individual/company’s business this year in comparison to previous years? Has it done so in a positive/negative way?
John Coley: While I personally have been fortunate to have a better year in 2007 than 2006, I can’t say that for the real estate market as a whole. Through August, the number of waterfront closings per year was down 35%, from 346 to 226. I can’t help but think that a portion of that is due to the low lake level. I don’t think that it’s a majority of the culprit, though. I think the major blame for a slower market still lies at the feet of sellers who have overpriced their offerings. From 2000 to 2006 sellers became accustomed to 30% gains in value per year, and priced in 07 accordingly. The facts have shown that there was little or no value gain in 07 from 06, and some sellers have not figured that out yet. Case in point is the auction in July 07 at Harbor Pointe. They sold 25 condos in one day even though the water was extremely low, so you can’t blame it on the level. They sold them because the prices were low enough for buyers to accept.
LM: Do you think the drought will be a positive thing for the lake market - in terms of rebalancing a surplus of property and real estate agents?
JC: This is kind of a philosophical question. I think it is part of the natural free market cycle of business, so I don’t think it’s “positive” or “negative.” It’s just natural, so deal with it. Is a forest fire a “positive” experience for wild turkeys? Well, if you’re the turkey that gets burned up, no. But if you survive it and the forest in general grows more healthy because of the fire, then maybe it’s “positive” for you.
On the practical side, I do think that the lake will follow the national trend of less people joining the real estate profession over the next two years or so. The same thing happened in the tech stock boom of the late 1990s. Lots of people quit their jobs to be “day traders” or they did it on the side. The stock market crashed, and they went back to their old jobs.
There will always be room in the market for good, honest, hardworking real estate agents. In a slower market, there is less incentive for those who are half hearted or not dedicated to join up. The same rule applies in any profession. In the minds of the average American, real estate agents have a pretty low image, so I doubt we’ll see any “Farm Aid” style benefit concerts for starving Realtors.
LM: What benefits are there for buyers in the coming months? Sellers?
JC: Buyers - I think it’s a buyers’ market in every category (condos, lots, homes), so they have the benefit of buying at good prices. The only way they can benefit, though, is to actually buy. If they sit around and try to perfectly time the “bottom” - then they may miss out. Study after study shows that most “experts,” much less the average joe cannot accurately predict the perfect bottom of any market. In fact, once the public realizes that a market is on an upswing, sellers have started to gain momentum again.
Sellers - I have talked to several people that are now considering upgrading their homes to take advantage of the buyers’ market. I think another benefit is that if they price their property correctly, and either the water comes up next spring or interest rates tick down a half point, they could have some pressure relieved. The last buyers’ market in 1999 and 2000 lasted for a couple of years, if that, then it took off and ran for 7. Sellers can be confident that, if they price it right, stage it properly, and market it hard, their home will still sell. It might take longer, but a good agent can get it done.
LM: Is there a silver lining to the drought for the area’s real estate market?
JC: If Alabama Power is successful in their efforts to raise the winter level water pool to 483 or 485 as opposed to 480, that would be great. If this drought gives them the evidence they need to make the case, it will be worth it.
And if there are fewer real estate agents around, maybe there will be fewer agents’ mugshots grinning at you from signs, magazines, and mail outs. Ha!!
LM: What are your predictions/plans for 2008?
JC: If this severe drought continues, I think it will become a major, rather than minor negative effect on waterfront sales. The question in the minds of the buyer that’s new to the market, is “will it ever come back?” Veteran buyers realize we’re in an 80 year anomaly and it hasn’t bothered them that much. But 2 or 3 years straight of less than full pool conditions will start to take a heavy toll. Personally I think that is highly unlikely if you look at the rain patterns over the last 50 years. But it’s a remote possibility.
I think that most sellers will not be very negotiable in Jan 08 - Mar 08, gambling that the water will come up. They will figure, “hey, I’ve waited this long, why not wait a little longer.” I think more buyers will start to wake up and realize that the time to buy is now. For so long I heard from buyers that said “call me when that market is not so crazy.” I’m calling them now.
LM: Anything else you think needs to be included.
JC: Feel free to quote from these related posts:
Nobel Winners in Economics Say Buy Now on Lake Martin
This Man’s to Blame For the Slow Lake Martin Market
6 Crucial Changes Coming to Lake Martin Real Estate
To Predict Lake Martin Real Estate, Look West
Thanks again for the mention, Lake Mag!! (all photos in this post were taken by Kenneth Boone / Lake Magazine – Lake Martin Issue, November, 2007)
Click here for the entire Lake Magazine Article.
Nobel Winners In Economics Say Buy Now On Lake Martin
The winners of the 2007 Nobel Prize in Economics, are advising buyers to act now on Lake Martin.
OK, OK, maybe Leonid Hurwicz, Eric Maskin, and Roger Myerson haven’t come right out and literally said that, but a quick review of their work should tell you that they would advise it. Their work laid the foundation for mechanism design theory, which attempts to explain how sellers and buyers allocate resources in the real world.
Our old friend Adam Smith describes the theoretical world of free market capitalism, where buyers and sellers have perfect information. If a seller has 100 widgets, he sells exactly 100 for his lowest price and has no one asking for more. Exactly 100 buyers show up and buy them at their highest price, and no one walks away empty handed.
In the real world, however, information is not perfect. Sellers don’t know buyers’ top number. Buyers
don’t know how bad a seller needs the money. Let’s say a butcher has 20 people show up for his 15 steaks, and 5 people go home mad because of the shortage. The butcher should have raised his price to the point that he had 15 and only 15 buyers. Classic shortage strategy. Or, what if it’s the opposite? Say the butcher has so many unsold steaks that he may be forced to throw out meat. That’s called a surplus. So the butcher should lower his price and sell the steaks rather than trashing them. If steak loving buyers realized that he was dropping prices, they should get off their duffs and get down to the grocery. Simple, right? Easily applied to Lake Martin real estate, right?
FACT:
There is a surplus of Lake Martin waterfront property right now. At current buying rates, it will take 25 months to sell it all. That, my friends, is a surplus.
SURPLUS STRATEGY:
If you’re trying to sell your Lake Martin real estate, you should get realistic about prices. I am beginning to see this happen. There are very few sellers still out there that think that it’s still a booming sellers’ market. But have they learned the lesson enough to look in the mirror and lower prices on their own waterfront homes or lots? They all say “I know the market has cooled off, but…”
Buyers
Lake Martin buyers need to come to the table. All through 2006, the only thing I heard from reticent buyers was “call me when this crazy market slows down, I’ll buy then.” Well, I’m calling. It’s slow. Sellers are hurting. Are you going to wait until it takes off again to buy? Don’t say I didn’t warn you.
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