Q&A by Glenn Phillips; Article by Tiffany Hazelwood

The close of 2024 revealed that the U.S. residential housing market remains in an unofficial recession. That said, early indications for 2025 trends should slowly yield a path out of this. We can also expect lake real estate and other “discretionary” housing to break out of this lull faster than most primary residential markets.  Let’s take a look at why… 

CEO of Lake Homes Realty, Glenn Phillips shares, “I get to see a unique national view of real estate. Lake Homes Realty is the nation’s leader in lake real estate. We have access to data about thousands of lake real estate markets across the country. This includes tracking millions of visitors on LakeHomes.com, and their behavior online.” Phillips also cites regular conversations with agents all over the country as a broad-tapestry perspective that he gathers and is able to plug in to his kaleidoscope-view of national trends. We sat down with Phillips to review some FAQs posed by consumers in an ever-changing market.

Will there be more real estate deals if mortgage rates drop?

No, not for lake homes. Even though a rate drop has been expected/hoped for for quite some time, a rate drop would only marginally effect lake real estate sales. Why? Lake homes buyers often pay cash, particularly for second homes. Over 50% of our transactions nationwide do not involve a mortgage. In addition, buyers who can afford these properties and desire a mortgage can often get the best rates anyway. 

Will there be faster growth?  

There are three factors that prevented faster growth during the close of 2024: 1. The run-up to the presidential election dampened fall lake home sales. One theory is not that people were waiting to see election results (which is their claim), but instead that they were simply distracted by the drama. It is hard to think about buying or selling a lake home (which is discretionary anyway) when one’s focus is elsewhere. 2. Every year, people write fewer real estate contracts from the week of Thanksgiving through the end of the year. Most people just have other things on their mind or demanding their attention. 3. While inventory is still growing, the turn to more appropriate list prices has only just begun. This shift back to list prices that don’t spook buyers will take a few months. 

Will 2025 be more dramatic than 2024 for transactions?

While the close of 2024 may have had a modest increase in the number of transactions, I am predicting 2025 will have at least a 15% increase in year-over-year transactions. My reasoning for this is: 1. The election (regardless of the result) and the holiday distractions will be over. 2. Demand has not diminished (and won’t) for appropriately-priced lake homes. Buyers just need more selection at a reasonable market price. 3. More owners will be ready to sell, and they are becoming more realistic instead of “overly aspirational” in their pricing. In other words, they will be more serious about actually selling instead of dreaming of an inflated profit. 

Reasons for Buying and Selling: The 10 “Ds”

After waiting for years, a variety of factors will drive many owners to stop stalling and finally sell. These factors are varied but include many “Ds”, including death, divorce, debt, dreams and distraction (on to a new lifestyle), disability and dementia (aging homeowners no longer suited for lake activities), downsizing, distance (tired of the drive to this second home), and diamonds (a new marriage may call for a different home). 

Will the NAR Commission lawsuit settlement impact lake real estate?

The impact to lake real estate from the NAR Commission lawsuit settlement will take a few months to evaluate. I expect that the impact will be less for lake real estate, and other discretionary properties, than for other primary residential homes. Lake home buyers and sellers are financially capable of paying for quality real estate agent services and are more accustomed to seeking out expert guidance. They don’t hire the cheapest attorneys, seek the cheapest doctors, and they understand that a true expert in any financial transaction can more than cover their costs. 

Will it be a buyer’s market or a seller’s market?

Our data suggests we are finally shifting to a “softer” seller’s market for lake real estate. We see a continued steady increase in the number of properties listed for sale. The more interesting data point is that for the first time in months and months, we saw a decrease in the average list price. 2025 looks to be on track to have at least a 15% increase in year-over-year transactions. If both data points continue in this direction, it will mean a market that will drive more transactions. We’ll know after another two months if our data is an outlier or the first indicator of a trend that will produce more transactions. 

Tiffany Hazelwood

Tiffany Hazelwood has a degree in Journalism from the University of Richmond is a full-time Real Estate Broker with Lake Homes Realty, a lake-focused real estate firm, where she serves as the Anchor Agent for the Lake Anna market. She has been a licensed realtor since 2008 and has been specializing in real estate here at the lake since 2016. She has enjoyed writing the real estate section for the Lake Anna Breeze™ since 2019. In her spare time, Tiffany enjoys jet-skiing and boating on the lake, traveling with her boyfriend, Tom, and time with their 3 dogs.