We are ending 2012 on a bit of a negative note. The average sales price of the on-water homes continues to fall. The average value of a waterfront home in Vilas County has fallen to $292,002 in 2012 from $330,851 in 2011. In Oneida County, the average value is $286,278 in 2012 and the value was $312,827 in 2011. Lakefront values have fallen 11.7% in Vilas County and 8.4% in Oneida County in 2012.
Why the drop in lakefront values? I don’t believe there is a single cause. We still have way too much inventory. When you look at markets that are showing improving values, you will find a shortage of homes. Florida, California, Arizona and Nevada are examples where inventory is low and prices are rising. Another factor is the price range of homes. We are selling far fewer $500K and higher homes and that has an effect on the average home value. Another issue has been the motivation of the sellers. The homes that have been selling have been selling at big discounts. This is a sign that the sellers really need to sell and/or they do not have confidence in the future. I will attribute some of this lack of confidence on the very negative campaign season, “fiscal cliff” discussion and the seasonal nature of Northwoods’ real estate.
There is positive news to share. In this same time period, 817 homes were sold in 2011. 1010 homes were sold in 2012. That is an increase of 23.6%. Prices are not falling in the off-water market. The prices in this segment have remained remarkably stable.