Real Estate Symposium highlights record-setting market at the lake
Those adjectives were used frequently last week during the annual Re/MAX Real Estate Symposium to describe what real estate agents have experienced this year as various segments of the market have reached all-time highs.
This was the 13th year Re/MAX has sponsored a detailed look at the real estate market at the lake, and moderators Jeff Krantz and Jason Whittle were almost giddy in their examination of real estate through the first three quarters of the year.
“It’s an exciting time to be in real estate,” Krantz said.
The number of transactions has skyrocketed.
The total volume of sales has set a record.
The average price of residential homes has set a record.
The impressive milestones are scattered throughout the multi-segmented market, they pointed out, and not just one or two areas.
For the same three quarters of 2020 from 2019, the total number of transactions of all types of properties has increase 26 percent. That was after three years of virtually flat transactions.
But from a low of 1,340 transactions in 2009 to 3,137 in 2020, there has been a 134 percent increase.
“That’s a crazy amount of transactions,” Whittle said.
The all-time high was in 2007 – just before the market collapse -- when there were 3,630 transactions.
It’s similar but more drastic, according to Krantz and Whittle.
In 2010, the total volume sold was $252 million. Through the first quarter of 2020, the volume leaped to $788 million, up 213 percent. From 2019-2020 alone the increase in sales volume was 48 percent.
They anticipate the volume of sales will top $1 billion by the end of the fourth quarter in December.
“Those are some fantastic numbers,” they agreed.
The average price of all residential homes – waterfront and off-water – topped $300,000 for the first time, hitting $308,000. That is a 22 percent increase from last year through three quarters.
From a low of $193,000 in 2012, the average price of residential homes has increased 60 percent.
The price per square foot has jumped as well, increasing 42 percent from $96 /square foot in 2012 to $131/square foot in 2020.
•Again, through three quarters of 2020, 28 percent of transactions have been waterfront residential; 27 percent was off-water residential and 27 percent condominiums.
•Waterfront residential sales comprised 47 percent of the sales volume in 2020, while 21 percent was condominiums and 20 percent off-water residential
The remainder of transactions and volume were in lots and land, villas, commercial and farms.
•The bulk of residential sales were in the $100,000-$199,000 price range (28 percent). Twenty-two percent of sales were in the $200,000-$299,000 price range; 23 percent were in the $300,000 to $499,000 range; and 11 percent were under $100,000.
Only 3 percent of sales were $1 million and above.
“Everybody thinks we sell a lot of million-dollar homes,” Whittle said. “Actually, only 3 percent are $1 million or more.”
However, that trend is increasing.
In recent years, there have been between 23 and 30 million-dollar homes. So far in 2020, there have been 47 million-dollar-plus closings.
When the housing bubble burst in the mid-2000s, many real estate agents in the lake area thought the local market wouldn’t be affected so deeply. They felt because of the uniqueness of our market – largely driven by second homeowners – we were different from the national scene.
As many know, the lake was hit hard as well. Real estate sales, price points and transactions plummeted. Now that the market is on a record-setting binge, some in the real estate and lending fields wonder if it can happen again.
“Are we in another bubble?” Krantz wondered aloud.
“In reality, when comparing the national market today to 2005-2006, it’s much different now. Then, we had subprime lending issues when virtually anyone could get a loan. It’s much harder to quality for a loan today.”
Another huge difference is the low inventory of properties, he noted, without the potential for so many properties to go into foreclosure.
“Today, the lack of sitting inventory is crazy. In July 2007, there were four million homes on the market nationwide. In January 2020, there was only one million,” he noted.
In visiting with real estate agents from Missouri, to Iowa to as far away as Manhattan, N.Y., Krantz said their number of transactions, price points and inventory mirrors the local market.
“The national perspective is very interesting and very related to us,” Krantz said.
Inventory as of end of third quarter
501 residential homes and villas
1,023 residential homes and villas
1,132 residential homes and villas
Through three quarters of 2020, compared to the same time in 2019, here are some numbers:
•Residential waterfront market
2020 – 883 properties sold, for a volume of $372 million and average sale price of $422,000.
2019 – 656 units sold, for a volume of $238 million and an average sale price of $362,000.
That reflects a 17 percent increase in average price sold from 2019 and 41 percent increase from 2014.
•Residential off-water market
2020—857 properties sold for a sales volume of $158 million and an average sales price of $184,000.
2019 – 814 units sold for a volume of $137 million and an average sales price of $168,000.
That reflects a 9.5 percent increase in average price sold from 2019 and a 43 percent increase from 2014.
2020 – 838 units sold for a volume of $169 million and an average sales price of $202,000 – the first time ever the average sales price has topped $200,000.
2019 – 678 units sold for a total volume of $119,000 and an average sales price of $176,000.
That reflects an increase in average sold price of 14.7 percent.
(Note: in 2019, there were fewer than 300 condo units available for sale. As of Sept. 30, there were only 70 units available – down from more than 1,500 units in the mid 2000s -- and no signs of major inventory changes in the near future.
•Villas and townhomes
2020 – 79 units sold for a sales volume of $30 million and an average sold price of $386,968.
2019 – 72 units sold for a sales volume of $21.7 million and average price sold of $301,569.
That’s an increase from 2019 to 2020 of 28.3 percent in average price sold.
Note: Villas and townhomes sales have come on strong, with one new development (Villas at Broken Arrow) selling for $950,000 or more.
•Waterfront lot sales
2020 – there were 121 sales with a volume of $19 million and an average sales price of $159,000.
2019 – 57 lots sold for a total volume of $8 million and an average sold price of $138,000.
That is an increase of 15 percent in average price sold from 2019.
Note: Krantz and Whittle said there isn’t even one months of inventory on the market now.
•Market absorption rate (how listings relate to actual sales)
2020 – 4,767 new listings; 3,137 total sales; one sale out of every 1.5 listings
2019 – 5,212 new listings; 2,492 total sales; 1 out of every 2.1 listings.
2015 – 6,150 new listings; 2059 total sales; 1 out of every 3 listings.
A lack of affordable housing for the workforce in the lake area is an issue, but the cost to buy land and build in infrastructure and then a home is costly. It falls on lake-are developers to help solve that issue, Krantz and Whittle agreed.