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Buyers flocked to lake houses during the pandemic. Now that frenzy is over

Texas’ lake real estate market, the largest in the U.S., is seeing an uptick of homes on the market.

The pandemic drove many buyers away from cities and toward properties around North Texas lakes. Over the course of this year, that rush has died down.

The number of home and lot listings around lakes in Texas jumped from just over 8,500 in February to almost 13,000 in August, according to a just-released report from Lake Homes Realty, a brokerage based in Alabama that sells lake properties in 34 states.

Texas is the largest lake real estate market in the U.S., with 12,945 land and lot listings as of August, followed by Florida (8,990) and Tennessee (5,849). The Lewisville Lake market, with 1,289 listings, had the third-highest number of listings of any lake market in the nation, behind Lake Michigan and Puget Sound.

After the start of the pandemic in 2020, supply levels in the lake house market reached their lowest point since at least 2018. Some areas had no appropriately priced homes to sell, said Glenn Phillips, CEO of Lake Homes Realty.

“We had — like everybody in real estate — record, fantastic growth during COVID, and ours was really accelerated because you could get out of town and be socially distanced,” Phillips said. “When COVID first hit in Texas and nationwide, people that owned a lake home took off to the lake, and then friends who didn’t have one went, ‘Well, I need one of those.’ ”

Phillips said sellers who deferred because they were uncomfortable about COVID or because they couldn’t find another house to buy have come back into the market. Some people may have had buyers’ remorse for homes they bought since the pandemic due to the amount of upkeep needed, and other sellers may be older people who have grown out of the lake lifestyle.

“I think there was a built-up interest of sellers who were very uncomfortable for a variety of reasons of putting a house on the market and are now more comfortable about COVID, they’re more comfortable about where they can go,” Phillips said.

He said he expects the lake market to be resistant to the economic shift spurred by higher interest rates as the sector has more cash buyers from an older demographic who typically have good credit scores and can still get good rates if they choose to borrow. More than half of Texas lake real estate buyers are older than 45.

“Over half of our transactions are cash, and if even if [buyers] do want a mortgage, in this demographic, the interest rates aren’t really a problem,” Phillips said. “If we dealt primarily with first-time homebuyers, man, that would be a tough market. That group is really getting kicked in the gut with restraints and inflation and lack of inventory and institutional buyers competing for [homes].”

While he doesn’t see this as a bust, Phillips said the window of time to get peak pricing on a home is closing in on potential sellers.

Suzanne Warner, a real estate agent for Compass who specializes in lake properties, farms and ranches, and investment properties, said homes in desirable areas are still moving fast.

“If you’ve got a good product, it always sells,” Warner said. “It may not be as much of a feeding frenzy, and I think maybe your buyers are slightly more discriminating, but I still think it’s an incredibly healthy market.”

Warner said she recently had two listings, both at around $4 million, in high-end developments at Cedar Creek Lake that buyers found out about and bought before she even had the chance to get them on the market publicly.

“There’s still just not enough inventory, and that’s not just Cedar Creek,” she said. “I’m running into that at multiple places.”

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