The Alexander City Outlook

Stable market

Editor’s note: This is the first in a series of articles examining the local real estate market.

The Lake Martin real estate market has taken some heavy hits in recent years – a historic drought, the worst economic crisis in 70 years – but 2010 reports suggest that the market has stabilized.

The good news is sales have increased, but selling prices remain depressed and inventory is still high

Sales are certainly not at the same level as the mid-2000s, when the market was booming, but some real estate professionals say that recovery is underway – and this year’s numbers appear to confirm that belief.

In fact, the number of waterfront property sales is closer to the height of the market in 2006 than the dismal real estate performance of 2008.

Russell Lands maintains statistics of waterfront property sales each month using data compiled by the Lake Martin Area Association of Realtors (LMAAR).

Looking back in six-month increments, 84 units have been sold from December 2009 through May 2010. That’s comparable to the 92 units sold during the same time period in 2006 to 2007 and better than the 60 units sold in 2008-2009.

“We’re not drastically off of that as far as number of units,” Russell Lands broker Steve Arnberg said.

LMAAR president Toni Adcock reported similar findings.

“So far this year, we’ve sold twice as many properties as we sold (this time) last year … that’s good news to me,” she said. “We can number ourselves to death, but there is some logic to some of these numbers.”

While sales are looking healthier, home prices are down and inventory is high.

“I would have to say it’s probably still a slow market and it probably favors the buyers because of the sheer number of sales,” Pinecrest Brokers owner Cal Johnson said.

In the six month period from December 2009 to May 2010, the median selling price for waterfront property ranged between $285,500 and $430,000 for an average of $372,366. That’s well below previous years.

The median selling price was higher during the same period in 2009, even with half the number of sales. Prices ranged from $322,500 to $677,500 with an average of $437,583. In the same period in 2006, median selling price ranged from $410,000 to $579,000 with an average $492,279.

Arnberg said the average selling price and the median selling price has remained close this year, which is unusual and a good sign.

“That’s a very healthy sign to me that you don’t have any wild fluctuation in month-to-month pricing,” he said.

Estimates put Lake Martin’s waterfront property supply between 26 and 28 months, a sound buyer’s market. Opinions vary about the ideal amount of inventory for a healthy market, but Lake Martin’s supply is much higher than the state and peer markets, according to Grayson Glaze of the Alabama Center for Real Estate.

“As of May 2010, the Lake Martin area has 27.9 months of supply,” Glaze said in an e-mail interview. “Compare this to peer market (rural) of 14.9 months and statewide of 10.3 months, and there is room for improvement.”

However, Arnberg said inventory is usually higher for vacation markets like Lake Martin.

“I have found 12 months supply is really more normal,” he said. “The reason I say that is we are used to seeing a lake house take twice as long to sell because we’re seasonal. That’s also true of rural property.”