Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, May 25, 1990 TAG: 9005260448
SECTION: SMITH MOUNTAIN TIMES PAGE: SMT-1 EDITION: BEDFORD/FRANKLIN
SOURCE: SANDRA BROWN KELLY BUSINESS WRITER
DATELINE: LENGTH: Long
New Jerseyites still are settling at the lake, along with people from Connecticut, Illinois and Florida. But in New Jersey, New England and elsewhere, home prices have settled down and, in many cases, dropped. Sellers no longer can anticipate returns of several hundred percent on their investments.
"By last summer, it was no longer a bargain to come from New Jersey to Smith Mountain Lake," said real estate agent Jerry Simpson of Century 21-Sellers. "They were coming from a depressed market there to an escalating one here."
Developer Ron Willard said he doesn't expect the usual traffic from New England this season because that market is stagnant. "We won't have those people coming down here flush with money," he said.
Willard said he is never able to gauge the lake real estate market until mid-June, but he said it is looking stronger now than it did 30 days ago.
Willard said he has not increased prices at his Water's Edge project since last March, but he expects to increase the base price of townhouses and condominiums this year. Lot prices will not go up until more sales are made, he said.
Water's Edge has 712 acres with 12 1/2 miles of shoreline. His Island Greene townhouses sell for an average of $300,000. His Marina Bay condos average $150,000.
The upward march of lake land prices in recent years lulled some people into believing price escalation would last forever.
Simpson did a survey of five properties that sold twice between 1983 and 1988 and found appreciation rates that ranged from 32.9 percent for a house and lot in Isle of Pines off Virginia 655 to 90.9 percent for a lot in Hickory Cove on Virginia 654.
Experiences like those caused some people to put their places on the market with high expectations. Some have had to lower prices.
Simpson, a retired Navy officer, said now if a piece of property doesn't sell within six months, he will not continue the listing unless the price drops. He recently lowered one listing by $25,000, from $274,000 to $249,000.
No one is saying lake land has gotten cheap. But property prices have stabilized, said Ruth Manning, an agent with Anchor Realty.
A slow national real estate market is not the only influence on the local market. There were about 1,200 pieces of lake area property for sale at the end of April, according to the Multiple Listing Service, many of which were owned by people who came to the lake when it began developing in the 1970s.
Because of a death in the family or a desire to live nearer to children or medical facilities, many of these early arrivals are moving, Manning said. Some of the houses they are selling might not measure up to today's construction standards at the lake, and the sales are going slower because of it.
There are lake properties on the market in Bedford and Franklin counties in a wide range of prices. In Bedford County, for instance, a buyer can get a seven-tenths acre waterfront lot with mobile home for $37,500 or 16 acres and a house for $1.6 million. In Franklin, a Striper's Landing condominium is for sale at $35,000 and a farmhouse with 30 acres for $1.4 million.
Waterfront lots can be found in the same broad price range, from $3,500 to more than $300,000, but generally will cost in the $60,000 range for a "good lot or a not-so-good lot," said Manning.
Manning also said that there is a "good inventory" of lakefront lots. The Multiple Listing Service had more than 500 in its mid-May book.
"It's not a particularly good time to put raw land on the market," said Leigh Fultz, a partner in Virginia Carolina Development Corp., which owns Contentment Island off Virginia 957, one of the newest developments. Eighty percent of the lots there are priced in the $120,000-to-$155,000 range.
Fultz believes that raw land put up for sale now will not bring the prices paid in recent years. This could explain why Appalachian Power Co., which developers said had prepared land to sell, has not put property on the market.
Fultz said too many people are not being realistic about pricing. There is a tendency to price land based on how much water frontage it has, regardless of the land itself, what is adjacent or what kind of access is available, he said.
Fultz said Virginia Carolina paid about $200 per running foot for Contentment Island's 1,200 feet of lake shoreline. "I think that is about the limit," Fultz said. "If people are to expect top prices on land, as has been paid on certain tracts in last two or three years, I think many will be disappointed."
Harris Ferguson, an agent with Coldwell Banker-Valley Wide, said the lake market is glutted with lots. He traces a downturn in the market to Apco's auction of the Waverly property, which he said drove up prices all around the lake and knocked a lot of prospective buyers out of the market.
Waverly, a 130-acre tract off Virginia 616, was bought in 1988 by Snyder-Hunt Corp. of Blacksburg for $3.4 million. At the time, some developers said the purchase increased lake prices by 25 percent.
Waverly, Contentment Island and Water's Edge are commanding the highest prices, although they have different amenities and are in various stages of development.
Jeff Sowder, development manager for Snyder-Hunt, said his company doesn't "play games with prices. We've held to full price."
He also said the company adjusted prices last year, both up and down. Snyder-Hunt has sold 30 of the 126 lots in the development. Prices range from $56,600 to $360,000 for waterfront lots and $37,000 to $52,000 for off-water lots.
Contentment Island is a bit rough-looking, Fultz said, since its entrance is not complete and roads are not paved. He said he has contracts for the roads to be paved in July. Contentment Island began sales late last year. Fultz said the company has sold slightly more than $2 million of property.
by CNB