In the Finger Lakes market of lakefront real estate, the waters are particularly dynamic. Heavily influenced by factors ranging from mortgage rates to inventory levels. In this local market report, we'll explore the current trends shaping lakefront real estate in our region and what prospective buyers and sellers need to know.
Mortgage Rates Make Waves
One of the significant factors influencing the lakefront real estate market is the ebb and flow of mortgage rates. Recently, there has been a notable drop, bringing rates below 7% for the first time in several months. Real estate experts, in conversations with Realtor.com®, suggest that rates are likely to stay in the 6% range throughout the year. Some optimistic voices even speculate the possibility of rates slipping into the 5% range by the year's end. These fluctuations can significantly impact affordability for potential buyers.
Inventory Challenges and Price Peaks
Lakefront properties are renowned for their exclusivity, and this exclusivity is compounded by historically low inventory levels. The scarcity of available properties is a double-edged sword—it contributes to the allure of these lakeside homes but also keeps list prices at a higher level. Limited options often lead to increased competition among buyers, further driving up prices. For sellers, this presents an opportune moment to capitalize on the high demand and secure favorable deals. That is, while inventory remains limited. As you can see from the chart below, lakefront home sales experienced a 13% decrease in the number of lakefront homes sold in 2023 but saw a 9% increase in average sale price of lakefront homes sold compared to the previous year. This varied drastically across the lakes. You'll notice the correlation between inventory and the average days on the market as well. This could also be attributed to the shift in selling strategy.
Shifting Selling Strategies
Despite the challenges posed by low inventory, the average sale price for lakefront properties continues to climb and days on the market continues to decrease (refer to the statistics report below). This upward trajectory reflects the strong demand and competitive nature of the Finger Lakes lakefront market. Additionally, the average days on the market have decreased overall by 22% at an average of 21 days on the market, indicating that lakefront homes are spending less time waiting for the right buyer. For sellers, this signals a favorable environment, while buyers need to act swiftly in this fast-paced market. In 2023 we saw less agents advertising delayed negotiations, meaning it was once again first come first serve with the right bidder winning the deal. This resurgence of urgency to secure the home once listed will continue this year, as long as the listing price is set appropriately.
What does this mean if you're looking to secure a lakefront home? We've noted before how lakefront buyers are more patient when it comes to finding the right home that suits their envisioned waterfront lifestyle. However, when that home comes to fruition online, they need to be ready on all fronts to guarantee the sale. Schedule a viewing, in person or remote with your agent, as soon as possible. Once confirmed it is the right fit, submit your best offer up front. You don't want to regret missing the opportunity if you had the initial funds in your budget, especially with competing offers coming in. Consider talking to your agent about your comfort levels with contingencies and inspections, a strategy that we do still occasionally see.
Cash is King in Lakefront Purchases
Cash offers continue to reign supreme in the realm of lakefront real estate, constituting over 50% of all purchases. The allure of a cash offer lies in its speed and certainty. In a competitive market where timing is crucial, cash buyers often have a distinct advantage. Sellers are inclined to favor cash offers, creating a challenging landscape for those relying on traditional financing.
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In 2024, we remain optimistic that there won't be many drastic changes to the market than what we saw in 2023. Inventory will remain limited with key strategies being utilized for successful sales on both ends. Sellers will need to be realistic with their initial listing prices, while buyers will need to come in strong on their first offers.
As the waves of change continue to ripple through the Finger Lakes lakefront real estate market, staying informed is key for both buyers and sellers. Mortgage rate fluctuations, low inventory challenges, rising sale prices, and the prevalence of cash offers are all factors shaping the current landscape. Navigating these trends requires adaptability and a keen understanding of the dynamic forces at play in the ever-evolving world of lakefront real estate.
Interested in buying or selling a lake home in the Finger Lakes? Call our Licensed Real Estate Salesperson, Brian Schmitt at 315-200-0019
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