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| Name: |
Bob
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| Subject: |
comment on John G's Blog
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Date:
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8/8/2007 8:22:18 AM
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John, I enjoyed reading your analysis on the real estate market at LM. I agree with you that the ultimate problem is supply and demand and I do not not see that improving much for a while. You mention that we now have 600+ properties for sale on LM compared to 126 in 2005. While true, the explosion of Condos probably represent more than 50% of this growth and they have a market that, while similar, is certainly more "overbuilt" than the housing market at present.
Now I will argue that the low water levels are having much more impact than you would like to admit. The ONLY thing that will fuel LM property values to new heights will be increased demand from out of state. Yes, this means people from Atlanta. The metro ATL area has nearly 6mm people, more than Alabama and Mississippi combined (Est.). People from the ATL metro area fueled the boom in the last few years (one need only look at car tags to confirm this anecdotal observance). These same people have not grown up their whole lives visiting LM and if their first exposure to LM has been recent the low water levels will have destroyed their opinion of the lake. I am not talking to the lucky few with deep water but I would gues that 85% of the properties currently listed have current water levels that seriously impair their ability to use and are far less aesthetically appealing.
Keep in mind that new demand from ATL is at risk to competition that include lakes in Georgia with the same problems as LM but also include lakes with steady water levels as well. New buyers do not want to buy a second home that may be "impaired" by water levels. Now, if this proves to be a 50 year "anomaly" the buyers will return with a vengeance. The new Karis Park Development near Chimney rock is proposing 51 new homes starting at 1.1mm and that is just one of several such developments in the making. Without the ATL market (and other out of state markets) to fuel demand these developments have no chance.
The current credit market crisis is also having a much greater impact on this than people know as well. "Easy Loans" no longer exist and second home mortgages have always been harder to get. The days of interest only, no money down, second home mortgages are nearly over and will be available only to those with the highest credit ratings.
So, a much lower supply due to credit markets, dependendence on out of state money to fuel the boom, and low water levels that influence the buying decisions of the already shrunken pool of out of state buyers have led us to where we are today. I still predict 10% growth in 2009 but it will be rocky between now and then...
Bob
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| Name: |
LifeTime Laker
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| Subject: |
comment on John G's Blog
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Date:
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8/8/2007 8:33:58 AM
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112 out of 600+ are condos boob. Have one of your afforementioned children help you with the math. And his moniker is John C., as in Coley. Try to keep up. He has been selling real estate on and off the lake since before you knew it existed, so I think I will put more faith in his opinion than yours.
Now a serious question. When do you predict the water to back to 'normal' level?
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| Name: |
Bob
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| Subject: |
comment on John G's Blog
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Date:
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8/8/2007 9:18:58 AM
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My apologies to John C for the typo and thanks to my favorite adolescent for pointing out my mistake. LTL, I was on this water level issue and the real estate downturn long before you or anyone alse on this board...check the facts...don't make me go back and prove that you argued that the water levels would not go to where they are and that real estate woulod not be hurt.
I have confidence that the sane members of this board will understand my analysis and if you really knew who I was you would laugh at yourself for the "lack of experience" comment you directed my way...
Bob
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| Name: |
John C
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| Subject: |
back atcha, Bob
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Date:
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8/8/2007 12:04:13 PM
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1. Great post! Very good ideas. Why not leave this comment also on my blog? I have a lot of people that read it but do not read this forum and they would benefit from your point of view.
2. Lake level effect on demand - There is nothing to "admit" here. If I thought the level was THE major effect on demand I would say that. I call em like I see em, I think everyone here will testify to that. I do think it has an effect, but in a minority role. I agree that people that are totally new to the lake, or new to the idea of buying, might take a look at the levels and think, well, it's August, let's just wait until next year. They are removed from the pipeline and quantity demanded shrinks. Since these are people that have not talked to realtors yet, I can't guess exactly. But from talking to my buyers, and talking to other realtors, I have not heard of many, if any, that are waiting due to the lake level. Price is there sitcking point. So if 2007 is about 150 waterfront sales behind 2006, I would guess and say that 50 are due to the level (33%) and the other 100 are due to prices. Obviously, that's a guess, because I am judging the motivations of people that I haven't spoken with.
3. Condo development - if you want to build a condo development, and crank the numbers, the easiest way is to find a stretch of land with lots (1,000 ft?) of waterfront that is not owned by Russell Lands or Alabama Power, and try to buy it. That's a tall order, there just aren't that many left. That's not to say that no more condos will be built: just the opposite. I can think of 2 or 3 that I have heard of right now. But when you compare these few sites to a lake that's 44,000 acres, it just isn't that much.
Now, you can also build a condo by buying up stretches of homes and getting the deeds changed, but that is a lot more expensive and a lot harder to do legally. Maybe in another 10 years the land values will go up enough to justify that amount of investment. Maybe then you will see homes being knocked down and condos going up like you do at the beach. Or, maybe you will not see that. Maybe the market won't turn and you will see a high percentage of homes like in Highlands, NC or Folly Beach, SC. It pays to look at other (more mature) second home markets to judge what might happen at the lake.
3. Atlanta - obviously, a big part of demand for the last 10 years. Trust me, it won't stop. The drought in 87 didn't stop people from Birmingham that flooded in in the 1980s, nor did the Montgomery influence stop in the 1970s. The next big market influence will be people from anywhere else. Looking at my notes, in the past 10 days I have talked to people from Texas, California, Virginia, Tennessee, Indiana, and Illinois.
I used to go eat at Kowaliga and we'd know everyone in the place. Now it's called Sinclairs and I am lucky if I know 2 tables' worth. There's good and bad parts of that, I guess.
Whatever happens on the lake in the future, I will continue to try and provide open, honest, fact based commentary. If you disagree, call me out! Discussions like this are good for everyone. Thanks, Bob, I appreciate it. I think I will go make the above into a post on my blog now..........
URL: This Man's To Blame For Slow Lake Martin Market
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| Name: |
MartiniMan
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| Subject: |
comment on John G's Blog
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Date:
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8/8/2007 12:48:01 PM
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Bob:
I have mixed feelings about the impact of low water levels. I think it has probably had an impact but I think it is very difficult to quantify. John's guesstimate is probably as good as anyone's since he has a broad, long-term experience in the market. I do think if you look at lake prices in Georgia (those that are run of the river and those that are down due to the drought) Lake Martin is still a great buy. I wonder as well what impact the subprime meltdown is having on available financing on second homes. Having said all that I would agree that the main impact is supply and demand.
There appears to be a double whammy of an increase in supply from condos and reduced demand (probably from multiple causes). Such is life in the real estate market. We bought our lakehouse 5 years ago and have seen significant appreciation in value. What motivated us to buy when we did was the comment from a real estate agent that people from Atlanta had discovered Lake Martin. What that told me was that prices would be driven up simply because Lake Martin was cheap when compared to Georgia which would drive up demand and prices. Thats what appears to have happened. However, if we put our house on the market today my guess is that if wanted to hold the price at its appreciated value it would take a lot of time to sell. As a real estate agent in Atlanta once told me when I asked what was wrong with a house in our neighborhodd that took forever to sell, "its always the price." A house is worth what someone is willing to pay for it. Want to sell quickly, lower the price until it sells. Want to garner a high price, prepare to be patient.
As for me, I tell my friends in Atlanta that now is a great time to buy on Lake Martin. Lots of supply, possible motivated sellers, low interest rates, etc. Five years from now they will look like a genius like we look smart with our purchase. Better lucky than good. Sorry for the tome.
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| Name: |
boataholic
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| Subject: |
back atcha, Bob
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Date:
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8/8/2007 2:16:02 PM
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To restate the price issue another way, the supply of people able to afford a starter home on the lake at 400,000 is significantly smaller than early 2005 when they could still be had for 250,000. Same goes for the high end where a million went a lot farther two years ago. As the price goes up, the net must be cast wider for those 600 properties to find buyers.
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| Name: |
boataholic
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| Subject: |
back atcha, Bob
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Date:
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8/8/2007 2:25:27 PM
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John your comment on the Highlands brings to mind this question for those of you who ponder the future of the lake: Have lake prices gone about as high as they can go until some other lifestyle factors enter into attracting the wealthy? I mean, Lake Martin is in the middle-of-nowhere rural Alabama (I like it that way). Even along the Hwy 63 area where some of the highest concentration of high dollar neighborhoods are (Trillium, the Ridge, Windemere), there is almost nothing in the way of shops and restaurants. There has always been good places to eat around county rd 34 but nothing that would impress the rich.
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| Name: |
Maverick
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| Subject: |
Haven't See Russells Plan
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Date:
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8/8/2007 5:36:37 PM
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From what I hear they have a long term plan to basically build a town of stores, shops, restaurants, golf cart path, horse trails, etc all the way from Willow Point to the Ridge and Windermere.
Hear they plan to tunnel under Hwy 63 for the paths.
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| Name: |
boataholic
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| Subject: |
Haven't See Russells Plan
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Date:
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8/8/2007 5:46:10 PM
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Hmmm, I wonder if Russell has determined that there are enough full timers to support the shops, or are they making a big gamble that the "town" they build will be the magnet to attract enough people to make the off-water property valuable?
Maybe they can incorporate "Our Town" (just kidding).
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| Name: |
PC Al
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| Subject: |
Haven't See Russells Plan
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Date:
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8/8/2007 6:04:15 PM
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Could be one day, but I can’t imagine any of us being alive that long. I know they are planning another golf course off 63, north of the bridge, but not on the water. Also, in the short term, the lots up Pitchford Hollow are going on the market this fall. Pitchford Hollow is the area past Veazey’s Marina after you come out of the narrow area. Russell moved the small cabins from that area two winters ago. Great lots with deep water. The worse lot in there would be better than the best one in The Ridge, in my opinion. They are planning on having a park area up in the upper end with canoe rentals, tennis courts, etc. There was talk that they may build a tunnel under the road coming by Ben’s airport and going to Veazey’s where they could keep it all gated and part of Willow Point. We will see………
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| Name: |
FanofLakeMartin
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| Subject: |
Another influence
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Date:
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8/8/2007 6:45:17 PM
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John, in talking to your prospective buyers does the unknown outcome of the boat ban lawsuit have any effect on purchasing decision?
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| Name: |
John C
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| Subject: |
None whatsoever
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Date:
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8/9/2007 10:09:21 AM
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Honestly, the only place (on the web or in real life) I ever see or hear of discussions on the boat ban is in this forum.
URL: Lake Martin Voice
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| Name: |
8hcap
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| Subject: |
Haven't See Russells Plan
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Date:
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8/9/2007 10:10:45 AM
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If you look to the left, going north on 63 just past the entrance to The Ridge, you will see a very large earth moving project. This is where the offices of Russel Lands will move and will be the Village site. I have not heard anything about a golf course but that would be great. The trail system tunnel will be in this location.
All of the above comes from Russell agents, i have not seen any site plans.
8
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| Name: |
LifeTime Laker
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| Subject: |
Legend in your own mind
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Date:
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8/9/2007 11:35:36 AM
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From tour post:
"check the facts...don't make me go back and prove that you argued that the water levels would not go to where they are and that real estate would not be hurt."
Here I am taking you up on your challenge!!! Find where I said that the water levels wouldn't get this low. Cut and paste including the header showing where I said it. I am sure you will use some lame excuse for NOT doing so, because it can't be done. I have said NUMEROUS times, that It would most likely go BELOWE winter level. Come on Bob, you made the challenge, now live up to your end of the deal. SHOW me boob. I am all a quiver with anticipation.
As for real estate. It seems to me that what John has been saying is that the run up irrational exuberance of the '05 season, with the corresponding increase in asking prices is the biggest factor for any 'downturn' in the market. He said he is talking to just as many folks as always, if not more. They just aren't in as big hurry to make a decision due to water levels. The water level has affected the number of closings, NOT THE VALUE of those closings.
But I am not going to debate real estate with you, and more importantly don't give d@mn who you are. IF you are so proud, why not just post it. Then those that are impressed by such things could bow down at the alter of boob.
NOW GO FIND WHERE I SAID THE WATER WOULDN'T GET THIS LOW!!! WOULDN'T IT BE AWSOME TO HUMILIATE ME OUT IN PUBLIC. COME ON BOOB. I AM WAITING.
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| Name: |
MythBuster
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| Subject: |
Challenge for YOU, LTL
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Date:
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8/9/2007 3:00:10 PM
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Find out how many times Bob has said something blatantly false, has been called out for it, and never responded. :-)
I'd do it myself, but we all know that my math skills are deficient, so I would soon be at a number that is higher than I can count.
Once you get through with that challenge, count up how many times Bob has insulted someone by using the phrase "redwood deck."
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| Name: |
LifeTime Laker
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| Subject: |
Points well taken, thanks
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Date:
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8/9/2007 7:06:28 PM
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But I am not going to do it either. He isnt worth that much of my time. And besides, we all know I couldn't count that high either. Boob just likes to throw cr@p against the wall and see what sticks. If I spent as much time blabbering about how big and important I am, I would turn around and tell everyone who I am. That way everybody could be in awe of me, not just myself.
If he turned out to be Bob Riley, I wouldn't be impressed. I don't judge folks by their station in life, but on their character.
And BTW-- I think boob must have grown up in a trailer with a redwood deck!!
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Well I guess you've never visited Seaside Florida. I grew up in Seagrove before Darrell and Robert Davis aquired the land that is now "Seaside Florida" They had a "vision" or a "plan" . It was a matter of 7 years and you couldn't move is our sweet beautiful beach town. It's hard to go back. Lots went for $7,000 to Millions over night. Hang on because God quit making land with a beautiful waterfront along time ago!
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| Name: |
Toni
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| Subject: |
comment on John G's Blog
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Date:
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8/10/2007 9:29:51 AM
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I think you've summed things up as well as any of the REALTORS® in this area could! John Coley has provided some great insights too. There are so many factors involving sales here at the lake - and based on discussions with other real estate agents, buyers didn't come when we expected them - last spring. They're coming now!
URL: http://www.selllakemartin.com/
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