It’s a phrase I’ve heard many times, “I had the opportunity to purchase [this piece of lakefront property], and I passed thinking the value would go down, but it never did. I kick myself for passing on it.” Hindsight may be 20/20, but kicking oneself is poor exercise.
In active real estate markets, much like the one currently being experienced in 2021, many people look at the current values and decide to wait for the market to “go down” and for values to decrease. But if one takes a look at the past, they are able to get a good idea of what will (or won’t) happen in the future. Hunter Croan, local lakefront expert, states, “When I got started in the business just before the 2008 recession, people expected waterfront property values in Central Texas to decrease, but overall, they held their values. Also, these waterfront properties were the first properties to start appreciating as we came out of the recession!” What can be learned from this is that most “worthwhile” properties will hold or continue to increase in-terms of values, despite economic conditions. Frank Baker, listing agent for The Lakefront Group and longtime real estate appraiser of over 20-years states, “Across the board, after the economic crash and during the recession, I saw waterfront values in the area flatline, but after began to trend upward.” Both are similar stories and are prime examples of reasons to purchase sooner than later.
Beyond economical changes, it can be determined additionally that physical changes don’t always have an adverse impact on real estate values. For example, when the dam at the foot of Lake Dunlap failed in 2018, causing a drop of approximately 12’ in the lake, it made it nearly impossible to utilize the lake for water sports, which is arguably it’s most popular use. As soon as the construction started on the new dam, the Lake Dunlap Real Estate values came back and are now just as high if not higher than before the dam failed. They are still 1.5 years from finishing the Lake Dunlap dam. A similar event occurred even more recently, this past fall (of 2021), the dam at the foot of Lake Placid had some components fail while stuck open, and while the dam will be replaced, the lake will not be able to be used for full-sized boating. When asked about how this affected the Lake Placid Real Estate market, Baker explained that he “…had more than one home sell for full-price, despite the water level and situation with the dam.”
While history may be the greatest argument against waiting for prices to drop, the present is a close second. Due to the massive exodus of states all around the nation, one can easily find out which states these people are relocating to. One of these states is Texas, and many are seeing this firsthand. Consumer Affairs states “Five of the 10 fastest-growing cities in the U.S. by raw population are in Texas: In order from highest to lowest population increases, they are San Antonio, Houston, Austin, Fort Worth and Dallas.” The lakes we service including Lake LBJ, Lake McQueeney, Canyon Lake, Lake Austin, and others are all centrally located between these metropolises. Because of the many newcomers, there is an imbalance of waterfront real estate supply and demand, with demand seeming to be at an all-time high, and supply experiencing the opposite. There is and always will be a lack of new waterfront supply, and the demand for it is ever-increasing, which causes waterfront real estate to be a prime investment. Things like multiple offers, over-asking offers, and bidding wars cause these values and selling prices to go up. Because of this, future values continue to go up. Keep this in mind when determining value is based off past sales since they are a snapshot in history in a market that is on the rise.
There is a quote that is credited to different people who say different versions of the same thing, one of those individuals being Winston Churchill. His version of this quote is “Those that fail to learn from history are doomed to repeat it.” Churchill may not have been speaking about local lakefront real estate trends, but the concept still applies. If historical, and even present, trends have taught us anything, it is that waterfront real estate values in Central Texas very rarely decrease. Sometimes the rate of increase decreases, and may even flatline, but the Central Texas area is seeing lots off growth, and therefore, it can be determined that values will more than likely continue in their current trend, which is upwards. So, one must ask themselves, is it worth the wait?