Housing market improvingPublished 7:35pm Tuesday, November 30, 2010
In the real estate business, success is often relative.
At least, that’s what Steve Arnberg, Russell Lands On Lake Martin broker, thinks.
Fall home sales on Lake Martin haven’t been spectacular, but they’ve been stable while other markets across the state continue to struggle.
Home prices and sales-to-inventory ratio – a number that represents the amount of inventory on the market – held steady in October compared to the previous year, according to recent reports.
Meanwhile, larger markets, including Birmingham and Montgomery, and even the state saw home prices drop and inventory creep up this fall.
So, while Lake Martin has seen better days and bigger sales, Arnberg said the market looks fairly healthy by comparison.
“We’re encouraged,” he said. “We’re happy where we are. We can see that by looking at other markets, it’s not as bad as it could be.”
Toni Adcock, president of the Lake Martin Area Association of Realtors (LMAAR), said she was happy with the progress the Lake Martin area market made in 2010.
“I think we’re doing OK,” she said. “We’re not booming, but steady is really good news.”
Two sets of monthly real estate statistics are kept for the Lake Martin area. The Alabama Center for Real Estate releases monthly reports on Lake Martin, which represents home sales in Tallapoosa, Coosa and Elmore counties and 750 miles of shoreline around Lake Martin. Russell Lands also maintains statistics of waterfront property sales each month using data from LMAAR Median price
Two indicators of a market’s health are median selling price and sales-to-inventory ratio, Arnberg said.
Russell Lands’ numbers show median price at $375,500 in October 2010 and $350,250 in October 2009.
The sales-to-inventory ratio represents how many months it would take to sell all inventory on the market. While larger markets should range between 6 and 12 months, Lake Martin, which is primarily a market for secondary home buyers, should range from 12 to 16 months depending on the season. October 2010’s ratio was still high – 24.88 – but it was below the 30.8 reported in October 2009.
“We’re actually looking at fairly healthy numbers now,” Arnberg said.
ACRE’s statistics for the Lake Martin area are similar to Russell Lands’ with October’s median price of $280,000 well above the previous year’s $180,000. The sales-to-inventory ratio was 24.4.
While Lake Martin has seen slight improvement, other areas have not fared as well.
In Birmingham, the number of home sales dropped sharply from 933 sales in October 2009 to 563 in October 2010. The median price remained steady, rising from $142,500 to $149,900. The sales-to-inventory ratio rose 30 percent from 11 to 18.5.
In Montgomery, October sales also dropped from 352 in 2009 to 200 in 2010. Sales-to-inventory ratio more than doubled from 8.8 percent to 15.9.
Statewide, sales dropped from 3,454 in October 2009 to 2467 in October 2010, while sales-to-inventory ratio rose from 11.3 percent to 16.2 percent.
Arnberg said the expiration of the federal home buyer tax credit this fall could be part of the reason metropolitan areas have seen a decrease in home sales.
The tax credit did not apply to secondary homes, which ruled out many buyers interested in waterfront property on the lake.
“Since we didn’t have that artificial inflation, we didn’t have that deflation,” he said.