Lake Wedowee Market Update

Posted at 10:29 AM, Apr. 30, 2007

Lake prices escalate dramatically for 3rd straight year

By: Kelly Caldwell

T

he real estate market on Lake Wedowee constantly changes with new homes sales recorded every day. Considering Alabama Power Company owns between 65 to 75 percent of the 272 miles of shoreline, there is only a limited supply available for individual owners and prices have escalated dramatically in recent years.

In 2005, only one home sold for more than $500,000 and just a year later six homes sold for more than that. To date, the most a home sold for has been $875,000*, and now in the first five months of the new year 26 homes are advertised for more than $500,000 with five homes listed for more than $1 million.

Does this mean Lake Wedowee is pricing itself out of attracting the average second-home buyer? Not necessarily. While extremes are out there, the average selling price for a home on Lake Wedowee last year was $318,784 with the lowest sale recorded at $132,500 compared to $287,028 and $128,000, respectively, in 2005.

From a seller’s prospective, this is excellent news. Most know that real estate rarely depreciates in value, it just appreciates at different rates depending on what is happening.

The National Association of Realtors reports the national median existing-home price increased 12.7 percent in 2005 and on Lake Wedowee, the existing-home price increased 10 percent in 2006 based on documented sales*. Since record keeping began in 1968, the national median home price has risen every year, even during recessions and periods of sales decline. Typically, in a balanced market, home values rise at the general rate of inflation plus 1.5 percentage points.

However, there is an interesting statistic to consider in the early months of 2007. Currently there are 81 waterfront homes advertised on ezMLS.com (the main advertising body for Lake Wedowee) with 46 of those coming on the market this year. The average price is $475,400 ($389,900 median) which is quite a leap from the average list price of $337,340 ($328,500 median) from a year ago. Matter in fact it is a 40 percent increase. While this seems like fantastic news for this area, it might not be. It is true there are some extraordinary homes advertised for sale, but are those price tags realistic? Considering only 14 waterfront homes have sold in 2007 (compared to 18 in the same time frame a year ago) it makes me wonder if the market is slowing a little bit. The peak season for waterfront home sales is May through September and it will be interesting to see how buyers react to the current prices of waterfront homes on Lake Wedowee.

*The figures in this report are based on information obtained through www.ezMLS.com, this is just an average and does not include homes sold by owner or other home sales not reported by real estate agents or builders. Randolph County does not have a multiple listing service at this time.

To learnmore about the lake market go to www.RandolphCountyGrapevine.com