Historically the Alabama lakefront housing market has been a consistent, if not unique, animal. Agents see their phones begin to light up in mid-March, and become too hot to touch in June/July as the Alabama summer swelters, then as predictably as the temps taper off in the fall, so do the phone calls. Buyers think about lake life when they’re warm enough to dip toes in our lakes, then think about the realities of life when school starts back up. Us agents store up commission checks like squirrels storing nuts for the winter! Houses get listed in March – August, then quickly dwindle to a trickle in our off-season. While I’ll always advocate for searching in the off-season, this has always been the norm on Alabama’s lakes.
Except this year seems a little different. We’re seeing more lake homes coming to market later than usual this year, and the prices are certainly more reasonable. Logic would say higher interest rates are driving down prices a bit, and uncertainty in this economy is fueling the desire to part ways with the lake house, but I caution buyers looking this late in the year to keep your expectations, and hopes, in check when deciding to pull the trigger on your dream lake getaway. Here’s why.
Lake homes are a sheltered island in the real estate sea. Where hot markets a year ago in other places are now cooling off like an arctic blast due to the economy and national politics – lake homes exist in a sort of perpetual real estate bubble. I realize talking about real estate and bubbles conjures to mind crashes like we saw in 2008, but this is a different type of bubble. Think that weird movie with the kid who lived in a plastic bubble keeping him safe from the outside world. Bubble Boy? I don’t remember the name. The movie was trash! But the theory holds true.
Lake homes are secondary homes for nearly 80% of homeowners. Most of my customers are looking for a weekend getaway – a place to escape before heading back to the grind wherever they call home, back home. The other 20% of buyers are retirees who call the lake their full-time abode. Those two demographics carry unique qualities. Both parties are typically not in a rush to purchase, and therefore don’t subscribe to the market hysteria we see in major cities and suburbs.
Buyers tell me all the time about how houses are going for $50-100k over asking with ten offers and no contingencies back home, and I feel for those poor agents in the trenches. That rarely happens on the lakes. As a listing agent I’m lucky to get two offers at one time on a lake home, and that’s assuming it’s priced competitively. The buyer pool is much, much smaller. And these buyers are not in a hurry. They’re going to buy what they want when they’re ready to buy it. Buyers typically call my phone in consistent stages of life. They’re the younger couple with small kids who want to make the same memories I made growing up on the lake. Maybe they’ll Airbnb the house while they’re at it. Or maybe the last bird flew the nest, and the buyer wants to get on the lake and wait on new grandkids to arrive. They’ll keep working back home and dream of retiring to the lake in a decade or so. That brings us to the last crew to buy – the retirees who’ve paid their life’s dues, and are ready for the sweet, slow lake life. In any case where is the crazed urgency in any of those scenarios?
The same holds true for sellers. The lake house they made many memories in was usually a second home. It’s paid for quite often, has appreciated steadily over the years, and still brings them joy most of the time. There is rarely a necessity to sell, but those necessities can be categorized by the hands of time. For example, the passing of a loved one usually causes the lake home to become a burden for the remaining owner, or advancing years has caused that once gorgeous view to become a dangerous set of stairs to the water that replaced hips and knees no longer justify. Or maybe the kids and grandkids don’t visit as often as they once did – off living their lives. Whatever the case may be, it’s almost never because the bank is calling for a late payment on the lake house. Sellers may be listing later this year, but they’re certainly not desperate to give away the lake house.
This lack of urgency on either side of the closing table makes knowing your agent, and more importantly, them knowing the lake and its people, all the more important. Does your agent know who’s thinking of selling? Does your agent know any buyers who would be a good fit for your lake home? Answers to these questions can mean the difference between a quick sale and changing of ownership, or a drawn-out process of hard marketing and bush-beating to bring both parties to the closing table. A good agent will thrive in a hot market, but the best agents are the ones who stay consistent in a bubble market, a niche market – the lake market.