While Winter Months Are Slow For Buying Lake Real Estate, Sales Are Still Hot
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“The lake real estate market in the U.S. is much larger than most people realize,” says Glenn Phillips, CFO at Lake Homes Realty, in a recent report. The brokerage, based out of Hoover, Alabama, just put out their Winter 2023-24 market report that provides data about thousands of lake real estate markets across the country.
The brokerage‘s website, LakeHomes.com, has millions of visitors that give a unique insight into consumer and market trends and how buyers and sellers think and act.
“Along with the data, I frequently talk to our local licensed real estate agents on lakes nationwide,” Phillips said. He provided a list of things he learned and what he expects in the winter months and into 2024 in his recent report, which is available here.
1. I expect the number of lake properties sold in 2024 to exceed 2023 by 10 to 15 percent.
This was based on the continued (albeit slow) increase in inventories of lake property for sale across the country. To state the obvious, inventory is a critical fuel for more sales. However, there is nothing that will create an explosion of lake properties for sale, and without that, there will be no crash in this market in the foreseeable future. Yes, the peak of the real estate market, and at many lakes, has been reached (or passed). However, none of the 2008 real estate, supply, labor, and mortgage conditions exist.
2. The number of lake homes listed for sale will modestly increase in 2024 after reaching historic lows in 2021 and 2022 across virtually every lake market.
While improving, the selection of “appropriately priced” lake homes will remain limited. (By “appropriately priced,” I mean homes priced such that they will get realistic and viable offers). Sellers and buyers should not be faked out by headlines that tout significant increases in home inventory (for lake homes or any home). These are statistical tricks to create click-bait headlines. “Home Listing Inventory Doubles!” does not mean much when the number you are doubling is tiny. A market recovering from historic lows can improve and still be very limited.
3. While softened compared to the last three years, we remain in a “soft” seller’s market for lake real estate.
Unfortunately, many sellers falsely believe they are in a “hard” seller’s market. These sellers are overpricing themselves right out of the market. Their homes sit and sit in the MLS and boost inventory numbers (since these homes don’t sell very often). These sellers often become frustrated, clinging to outdated sales data for their area (or their self-created value beliefs that buyers don’t share). They have no one to blame but themselves when their homes don’t sell. “Marketing cannot overcome overpricing.” Buyers are more up-to-date on the market. At many lakes across the country, there is a growing trend of offers from buyers coming in below list price. Sellers who “get real” on pricing can sell reasonably quickly without fire selling.
4. Lake real estate is highly insulated from higher mortgage interest rates.
A lake home is a discretionary home. Lake home buyers often pay cash (particularly for second homes). Mortgage availability and rates have little to no impact, and those who can afford these properties can often get the best rates if desired. Lake home buyers, even during unclear economic times, have purchasing power. They are also patient and selective. This is a dream home; they can (and will) wait for the price and selection reality to match their dream. Lake Real Estate Market Report: Chapter 1 – Winter 2023-2024 www.LakeHomes.com Copyright © 2023 Lake Homes Realty, LLC 5
5. Homeowners at the lake are rarely in a “must sell” situation.
They can be overly patient with not only price but also timing. Some may delay selling for years beyond their use of the property.
6. Unlike traditional primary residence real estate, I strongly recommend lake home and land sellers think geographically broader than their local real estate and local market comps.
From the buyers across the country visiting LakeHomes.com, we know many buyers are looking for a lake home on MULTIPLE LAKES, often in different states. Sellers are not just competing with the houses for sale on their local lake. They are competing for the same buyer with similar properties on different lakes. It is wise to price a lake property with a solid understanding of multiple markets (such as the information in this report) and with guidance on home prices on lakes in other areas of the country (something our licensed agents can uniquely assist lake homes and land sellers with).
7. To sell a lake home for maximum financial return requires appropriate initial pricing.
Even with strong demand for lake homes, tens of thousands of lake homes and lots have been listed for sale for months and even years. The reason is simple. Lake home buyers, as well as home buyers in general, are more informed than ever in human history. Buyers use LakeHomes.com and other websites to educate themselves. They know the market, trends, and recent transactions. These buyers have ABSOLUTELY NO INTEREST in wasting time asking about overpriced properties, much less touring them. Buyers who don’t inquire don’t make offers. Lake home buyers can be eager, but they are wise. Smart sellers know that lake home buyers can (and will) wait for pricing to improve, as these are discretionary purchases not required for work or school. Marketing cannot overcome overpricing.
Here are the states with more than $1 billion in lake home and lot listings:
- Texas – $8.59 billion (up from $8.27)
- Florida – $4.96 billion (up from $4.74)
- Washington – $3.56 billion (down from $3.63)
- North Carolina – $2.51 billion (up from $2.46)
- Tennessee – $2.5 billion (up from $2.32)
- Minnesota – $2.36 billion (up from $2.29)
- Michigan – $2.18 billion (up from $2.19)
- Georgia – $2.21 billion (up from $2.13)
- Illinois – $1.43 billion (down from $1.54)
- Alabama – $1.55 billion (up from $1.46 million)
- South Carolina – $1.4 billion (No Change)
- Idaho – $1.2 billion (Down from$1.4)
- Missouri – $1.29 billion (up from $997 MM)
Top 10 States for Lake Property Listings
- Texas – 16,028
- Florida – 9,028
- Tennessee – 6,208
- North Carolina – 4,553
- Georgia – 4,184
- Minnesota – 4,338
- Alabama – 3,959
- Michigan – 3,445
- Washington – 3,308
- Missouri – 4,018
Top 5 Most Expensive Lakes for Home Listings(Average Price)
- Walloon Lake, MI – Avg. $7,755,000
- Lake Sheen, FL – Avg. $6,522800
- Lake Chase-Orange, FL – Avg. $5,673,750
- Lake Pointe Verde – Avg. $5,092,500
- Heron Lagoon, FL – Avg. $5,073,890
Top 5 Lakes for Number of Home Listings
- Lake Michigan, IL – 1,091
- Lewisville Lake, TX – 955
- Puget Sound, WA – 830
- Lake of the Ozarks, MO – 772
- Lake Norman, NC – 744
