Buying a home at Lake of the Ozarks doesn't always mean owning a house. More people are opting for a Lake of the Ozarks condo than ever before. In fact, there aren't many condos left on the market. So... when will there be more?
2020 was the year no one expected, when it came to real estate at the Lake of the Ozarks. Sales volume broke past the billion-dollar mark for the first time ever. It was an especially good year for the condo market, with sales spiking 46% from 2019. The year even managed to top the memorable 2006’s condo sales by 4%, using inflation-adjusted numbers. Condos are still hot in 2021, and inventory is extremely low… could the Lake be ripe for condo development?
“If you look at the numbers, condos make up about 30% of our overall market in terms of transactions… They’re a strong part of our real estate market and they’ll continue to be,” said Jason Whittle, real estate broker at Jason Whittle All Pro Team RE/MAX Lake of the Ozarks.
And with real estate inventory depleted, prices are continuing to climb for condos. The average sale price of a condo at the Lake hit $200,000 for the first-time ever in 2020, and interest in moving to the Lake of the Ozarks shows no signs of slowing.
“A year and half ago there were 300 condos on the market, and today there are 30,” Whittle said, adding, “And some of those haven’t even been built, they’re just being advertised.”
Multiple condo projects are in the works.
Topsider Condominiums, the former nightclub at the Grand Glaize Bridge, is under development, with 140 new units planned. The majority are already spoken for. Topsider units are 3 bedrooms and 3 baths, with amenities including two pools and a clubhouse. Prices range from $225 to $325 per square foot.
The Lake’s only “island condos” are expanding, too, with 30 new units planned at Isla Del Sol. The new building, dubbed The Reserve at Isla Del Sol, offers four floor plans (both 3 bedroom and 4 bedroom units). Isla Del Sol is located on the 3 Mile Marker, and is connected to the mainland by a drive-able causeway. Resident amenities include access to two community pools and the opportunity to purchase a boat slip. Prices start at $331,000.
Costs On The Rise
However, even though interest in the Lake has made condo development more feasible, skyrocketing building costs make it a challenge. According to the National Association of Home Builders, the average cost to build a single-family home was $222,511 in 2009 ($82 per square foot) and rose to $296,652 in 2019 ($114 per square foot), a 15% hike after inflation. But 2020 accelerated that trend. Lumber prices have more than doubled in the past 12 months. Low interest rates have increased demand for new homes across the country, and the lumber supply chain has faced problems related both to Covid-19 and Canadian tariffs.
Even as rising prices and low inventory make condo development more lucrative, high building costs cut into these potential profits which makes deciding whether or not to build a balancing act.
“As it looks on the horizon right now, we don’t see building costs going down. In the future, who knows what’s going to happen? But I don’t see it decreasing anytime soon,” said Chris Foster, a developer at the Lake of the Ozarks.
But if the Lake does see more condo developments, Whittle expects that they’ll be mostly luxury developments.
“Going forward, I think the days of a condo project being under $250,000 is over. I don’t think you can buy the land, put all the infrastructure you need into the land and build the condos and sell them for under $250,000,” Whittle said. “The cost to build has gone up so much that we’re going to continue to see higher-end condos because it’s really the only way a developer can make the numbers work.”
According to realtors Lake Expo spoke to, 2021 sales are shaping up to be like 2020. If that trend continues, supply will only grow scarcer, which could continue to push prices higher. Condo sales could become profitable enough to spark more development.
“I’m just as busy as I was last year. We need inventory for sure,” said Jonathan “JR” Hartenstein, with Lake Ozark Real Estate by Jonathan Hartenstein.
Comparisons to the dizzying condo sales in 2006 have an ominous feeling, too, though: the housing market crashed not long after, and condos were hit hard. Foster says 2021 isn’t the same situation.
“If you’re talking 2021 and comparing it to 2006, 2006 was the end of the run and I’d say 2021 is more the beginning of the run,” Foster said. “If you see all the projects that are coming on, I think there’s going to be more long-term growth.”
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