When it comes to vacation homes, most people’s minds turn to places like a seaside bungalow or a mountaintop chalet in a ski town. But there’s a whole other category of vacation homes that combine aspects of both destinations that many fail to consider: the lake house market.
Perhaps the biggest advantage of lakes is that they can be found just about anywhere —mountainside from a natural spring, man-made in the middle of a vast plain, etc. — in varying shapes and sizes. Depending on which lake you find yourself visiting, they’re often surrounded by vacation homes that are more reasonably priced than what you’d pay for places with water but no mountains or mountains but no water.
But, is the lake house market feeling the same crunch as the rest of the residential real estate market?
As it turns out, lake houses are selling just as quickly as other vacation properties, if not more so. “We experienced 65% year-over-year growth last year,” says Glenn Phillips, CEO of Lake Homes Realty, a specialty brokerage with nearly 200 agents licensed in 33 states. “It would have been greater if we had more inventory.”
Phillips says lakefront and lakeview properties are doing well for the same reasons other vacation homes are: “Everybody wants to get away,” he explains. “People are saying, ‘What are we waiting for? Let’s do it.’ Especially since they can work from anywhere.”
Generally, natural lakes are smaller and can be found primarily in the Northeast. Man-made lakes tend to be larger and are mostly located where the mountainous or hilly terrain is able to hold depth and volume. There’s rarely enough shape to hold a lake in the Plains. Florida is flat, too, but it’s an exception; the water table is shallow, so lakes and ponds tend to pop up naturally.
What are the Top Markets for Lake House Listings?
Unfortunately, there is “no exact way” to measure the top markets for lake houses. For one thing, some states (like Texas) don’t release sold information. For another, sold data may not present an accurate picture because there may be a long waiting list of buyers in spots where there is little inventory. And for yet another, half of all multiple listing services do not indicate lakefront as an identifier. So, using what we could find, here’s what we uncovered:
Florida has the most lake house listings – more than 5,000! – on the LakeHouse website, plus the most lot listings (2,175),
Georgia has the most on private lakes (159)
Lake Michigan has 3,159 listings – 2,029 in Illinois and 1,130 in Michigan.
Lake Norman, North Carolina 968 houses for sale
Using its own algorithms to determine if listings are lake front, lake view, lake access or lake community, Lake Homes Realty shows most of the action is on Lake Michigan, in both Michigan and Illinois. “The Lake Michigan market is a big market but a place unto its own,” Phillips says. Beyond Lake Michigan:
Lake of the Ozarks, Missouri, has the second-most listings at 530, with an average asking price of $494,318.
Lake Sidney in Lanier, Georgia is third with 467 listings, at an average price of $681,575.
After that, the number of listing drops off precipitously to 280 at Table Rock Lake, Missouri,
258 at Lake Washington, Washington,
217 at Lake Murray, South Carolina, and
212 at Lake Oconee, Georgia.
No Bargains…But No Extreme Inventory Shortages, Either
In Lake Homes Realty’s first quarter market report, Phillips stresses that, just like the market in general, lake house inventory is depleted of “appropriately priced” listings. True bargains are few and far between, he reports.
In a pattern that has held true for four years running, lake-centric buyers are a discerning lot. They respond quickly to new listings that signal they are genuinely and actively for sale. And the way they see that is if the property is priced reasonably.
“While we are in a ‘hot’ real estate market, the average home sale is still below list price in practically every market in the country,” he writes. “Headlines may lead sellers to believe they can get any price they desire. The reality is lake homes still typically sell below list price.”
There are exceptions, though. If the property is priced right in the first place, the broker advises, it is likely to garner interest right out of the box and sell above the asking price. “The lesson for sellers from our data is clear: Do not price to dream or test the market; price to sell,” he says.
The reason thousands of lake houses are sitting idle, some for more than a year, is that they are “too overpriced,” Phillips explains. Buyers “are eager but prudent,” he says. “They may be hungry but they are not fools. They know the lake real estate market is likely at, or near, peak and have no appetite for shooting too far beyond that.”
Phillips says he’s found that the COVID-19 pandemic has added three new types of buyers to the mix of those who normally contend for lake house property:
Those who no longer are willing to wait for their dream homes. They now want to buy sooner rather than later and are sometimes willing to settle for something that’s less than perfect.
Those who want to social distance, work remotely and school at home. They realize that a lake house can be enjoyable, even after the pandemic goes away.
Those who see a lake property as a primary – and perhaps only – residence rather than simply a vacation home. The sell their current home, often at a great price, and buy at a lake, sometimes with the cash they’ve generated from the sale.
Find Your Dream Lake House
If you’re ready to find that perfect water view, finding it doesn’t have to be a chore. Simply visit Homes.com, enter in your desired location, and use the custom filter to show you waterfront listings — it’s that easy!
Syndicated newspaper columnist, Lew Sichelman has been covering the housing market and all it entails for more than 50 years. He is an award-winning journalist who worked at two major Washington, D.C. newspapers and is a past president of the National Association of Real Estate Editors.