Here are the April 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:

IMPORTANT UPDATE!  As of today, 5/16/2012 we have now closed 90 sales in April which is 6 higher than this report and 6 higher (7%) than April 2011!

Some significant additional interesting statistics for you:

• “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised only 16.67 % of our closed sales in March down from 27.7 % last month, 21% in February,  31% in January,  36.7% in December, 36% in November, 19.8% in October, 10% in September, 16.8 in August,  18.5%  in July,  25% in June and 27% in May 2011. The US average is 24%. The price range of these distressed sales was $75,000 – $1,270,000.  Our percentage of distressed active listings increased slightly to 8% from 6.2 %. Our number of distressed properties remains very low which is very encouraging.  We are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
• 40% of our closed sales were waterfront homes which is slightly higher than March’s 31%.
• 43% of Lake Norman’s April home sales were under  $400,000.
• 49 % of our April sales were under $500,000  compared to 61% in March sales and 70% in April. Higher price ranges are selling too.
• Our average prices are up for closed and conditional sales and DOWN for our active listings.
• As of today, the number of active listings for all of Lake Norman totaled 950 up from 861 on March 1st but still 20% below April 2011.  To put this number in even greater context, back in June of 2008 we had 1789 active listings.

A closer look:

• The number of Active Listings in Lake Norman increased 9% from last month but are 20% lower than last April. 2011 While our number of active listings is increasing as one would expect in preparation for our strongest seasonal sales market they still remain low. Our absorption rate/months of supply of active listings stands at 11.3%.  Our shrinking inventory and rising sales are getting us closer to a balanced 6-8 months of supply in Lake Norman area (MLS area 13).  This is good news for the long-term health of our Lake Norman housing market.

• Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home) which don’t account for a significant segment of our housing market, have actually been on an upswing.  This could be because sellers are more willing to take a risk or more buyers have homes already under contract before they put in an offer.

• Conditional Sales increased for the fourth month in a row, this time by a whopping 79%!  This is HUGE! After a slight lull the upward momentum of our Lake Norman housing market is impressive to say the least.  These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late May/June. Based upon these numbers our closed sales this month should exceed last month’s and have a chance to be our best May/June /July since 2007.  Great short term numbers for Lake Norman!

• Pending sales were up slightly compared to April 2011 and last month.    These are the contracts that are past inspections and are just waiting to close.  Pending sales are usually the best indication of closed sales in the next few weeks.

• The number of closed home sales in Lake Norman in April will be just a bit higher than April 2012 when all the numbers are in but they weren’t too impressive compared to past April’s.  (See the annual chart below).

The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:

• May 7, 2012: 246 (Wow, a new record again!)
• April 1, 2012: 227
• March 1, 2012: 178
• February 1, 2012: 155
• January 1: 134 (the lowest ALL year)
• December 1: 147
• November: 169
• October: 193
• September: 183
• August: 193
• July: 178
• June: 199,
• May:  173
• April 195,
• March: 163
• February: 142

We are clearly seeing a marked upward trend after a lag at the end of 2011.  This uptick in sales coupled with our low inventory bode well for the overall health of the Lake Norman housing market.

Here is a breakdown by price-range of our April 2012 closed sales in Lake Norman’s area 13-1 to 13-5:

• $75,000 – $199,999:  11
• $200,000 – $299,999: 12
• $300,000 – $399,999: 13

(These price ranges represented 42.8% of  April sales compared to 43% of March sales )

• 400,000 – $499,999:  6
• $500,000 – $599,999: 12

(These price ranges represented 21.4% compared to 26.5% last month)

• $600,000 – $699,999:  11
• $700,000 – $799,999: 3
• $800,000 – $899,999: 2
• 900,000 – $999,999:  4

(Solds for $600,000 – $1mill = 23.8% compared to 19% last month)

• $1,000,000 – $1,999,999: 9
• $2 million+ : 1

(Solds $1million+ = 11.9 % compared to 10.8% last month)

8-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers are for single family homes. They come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.

**I have made an adjustment of  the totals reflecting the ACTUAL  sales  every month in 2009, 2010 and the totals in the prior calendar years.  The columns may not add up but I do my best with what I have to work!  I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.

Summary and My Insight

The Positives and the Negatives:

Good signs:

• Sales year to date are up 9.37% over 2011
• Inventory of homes for sale remains low
• Significantly increasing conditional sales indicate that our Lake Norman housing market has strong momentum which will be reflected in higher closed sales for at least the next two months.
• The number of distressed homes for sale are a small percentage of our total inventory and sales
• Sales of homes over $499,000 are improving.  This past month the $500,000 – $699,000 price range was particularly strong.
• When properties are priced about right they are getting quite a few showings.  I am getting more calls directly from buyers regarding my own listings. There is a marked uptick in the number of buyers out looking.
• We are seeing more and more new construction popping up (Not spec homes)
• Interest rates are at all time lows…3.84% for a 30-year fixed this morning!
• I have a stack of positive articles about the US housing market from:  USA Today, Inman News, Real Trends, JP Morgan CEO in CNBC article, National Association of Realtors, Freddie Mac’s Economic Outlook Report, Bank of America and Merrill Lynch forecasts, Zillow.com and Wall Street Daily.
• Positive articles about Charlotte including that we are ranked as one of the 10 fastest growing U.S. Cities according the CNN Money (US Census Bureau), and 53rd in First American’s Improving Market Index
• Donald Trump closed on his purchase of The Point Golf and Tennis Club and is infusing cash into renovations and upgrade now named the Trump National Golf Club, Charlotte.

Challenges/Weakesses:

• Sales prices remain low and I don’t see any signs of them going up. Rather, properties are selling once they are priced low enough to attract offers and then they may even get multiple offers.
• With a shrinking inventory of active listings, buyers have fewer options
• Home loans, especially construction loans, are still a very challenging process.
• New: Homeowner’s Insurance is harder to get due to new stricter guidelines
• Global economic turmoil and US economic uncertainty

As I wrote last month:

I am more convinced than ever that our Lake Norman housing market has hit its bottom in terms of annual sales volume.  However, this has not translated to higher sales prices. Prices are low and buyers continue to be very picky; not willing to pay a higher price than past comparable sales.

The gossip among Realtors is how dramatically our activity has increased.  Despite low inventories, the number of buyers out actively looking has increased substantially.  Real estate firms are touting their sales increases and talk as if we are going to sustain these strong numbers. I am a bit more cautious.  While the worst is most likely behind us, we have a long way to go and most expect that it will be a very slow recovery.

My advice to Lake Norman home buyers remains this: Look for homes that are in good locations and have most of the priorities on your list.  While your perfect home might come along, don’t wait too long and don’t dismiss a property if it isn’t perfect.  Prioritize: Location, quality and depth of water (if waterfront buyer) and floorplan. Then, to determine a realistic price, use VERY RECENT comparable sales in your specific market niche.  The selection may not be great but with interest rates at all time lows and prices low it is a good time to buy.  With only 8% of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale to come along at an unrealistic price.  If you insist on low-balling, at least have some comparable sales to justify your number.  Don’t focus as much on the price as on the future marketability of the property.  A bargain that has incurable issues that will make it difficult to resale, really isn’t a bargain at all.  Be smart!

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I got a call yesterday from a potential buyer for one of my listings.  He told me he would like me to present an all cash offer of $350,000 for a property I just listed at $429,000.  With a little prodding I was able to find out that he hadn’t seen the home and didn’t know the neighborhood.  I tried to explain a bit about the price and comps and his response was “it is a terrible real estate market and that’s all I need to know”.  REALLY?

Needless to say, my client’s counter to this buyer was not accepted.

This is just one example of how not to be successful in our current Lake Norman housing market. While it is quite common for investors and low-ballers to make these kind of offers when a new listing comes on the market, I have to wonder what these buyers are thinking?  Or, are they thinking at all?  Even banks get disgusted with these types of buyers.  Here is a great example:

A Lake Norman waterfront foreclosure was listed a few months ago for $399,000.  I had an interested buyer so I spoke with the listing agent.   At that time, the bank had already received and turned down several very low offers from investors and it was clear that both the listing agent and the bank were frustrated with these buyers.  My buyer decided to wait.  Over a period of several months the price was lowered twice.  Finally, they lowered it to $329,000.  My buyer quickly made an offer of $305,000 and it was accepted just before multiple offers were coming in.  Clearly, if my buyer had made an offer of $305,000 when it was originally listed it would not have been as well received.

I had a buyer a while back who wanted to make an offer of $800,000 on a home listed at $1,189,000 because he heard the sellers might be desperate to sell.  I knew the comparable sales would not justify anything even close to this price but my buyer felt that if “your throw out enough of these offers eventually one will stick”.  But seriously, if the seller was that desperate wouldn’t they have lowered the price to get multiple offers?  This kind of thinking is truly irrational.  This property just closed for $1,100,000.

I have sold and continue to sell some incredible bargains on Lake Norman but I try to counsel and educate my buyers:

• Timing is everything.  Develop a relationship with the listing agent, especially of foreclosures and shortsales, so that you will know when the sellers are ready to work with a lower offer.
• Do your homework!  I always do a complete market analysis and research the history of any property for my buyers before they make an offer.  We will know how long it has actually been on the market, how many price reductions, what their loan amount is and if there are any signs of distress like a notice of default, a divorce, etc.

There was a recent article in the Los Angeles Times “Low-ball Offers Decline in Some Housing Markets” April 22, 2012 which stated “For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price.”  In my opinion this is an accurate description of our current Lake Norman real estate market.  Be smart!

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Want the very latest insight into our Lake Norman real estate market? So do I which is why, every month, I do a snapshot analysis of the middle two weeks of the month to get a sense of where our Lake Norman real estate market is at this very moment…an almost live insight into the heartbeat of the Lake Norman housing market.  These Hot Sheet reports serve as pretty good predictors of our short-term Lake Norman real estate market.

Well, last month I was very enthused by our string of “hot” months.  Unfortunately, a bit of doubt is beginning to creep in to my perspective of our current Lake Norman housing market.  Instead of a consistent showing of improving numbers across the board, there are some hiccups that indicate to me that we once again may see some mild ups and downs in the coming months.

Lake Norman Real Estate’s Two-Week Hot Sheet

4/21/2012

* The above chart is a summary of today’s “Hot Sheet” from the Charlotte Multiple Listing Service for single family homes in all of Lake Norman (area 13).  These numbers represent a real time snapshot of the past two week’s activity.  (April 7th – 21st).  As always, I have included the past 6 months so that you can put these numbers in perspective.

I created this additional chart comparing just the April Hot Sheets for the past 3 years to help put our April 2012 numbers in perspective with the past Aprils, not just the past 6 months:

April Hot Sheet Numbers for the Past 4 Years

Highlights:

• New listings: While our new listings are up from the winter months, they are still lower than any April since I have been keeping these records. If you add our new listings to the 26 back-on-market we had a total of 138 Lake Norman properties added to our housing inventory in the past two weeks compared to last April’s 117, 193 in April 2010 and 197 in April 2009.  As of this morning the total number of active listings in Lake Norman had increased from our all time low of 752 in January back up to 933 which is still extremely low historically.  The reason these low numbers are good news is because keeping our inventory low will help stabilize our own Lake Norman housing market no matter what is happening in other areas or states. That said, we are trending a bit higher this month with new listings.

• The number of properties that came back-on-the-market, most likely due to cancelled contracts,  jumped up after several very low months. However, compared to the past four April’s they are low with the exception of last April. While challenges continue related to securing financing due to tight restrictions on home loans by lenders, they are improving a bit.  Every loan approved warrants a celebration!

• The number of price changes were up compared to 5 of the past 6 months but down substantially from the past 3 April’s.  Considering sales are fairly good, this would indicate that prices are stabilizing.  There is no doubt that overpriced listings are sitting until they are reduced to the “magic” number that generates offers, even multiple offers.

• Pending home sales are actually the weakest category on this chart.   This indicates our closed sales for the next 30 days may not be as strong as they will be further into spring/summer. Pending home sales are contracts that have passed all of their conditions/contingencies/Due Diligence Deadlines and are just sitting ready to close.

• The number of closed sales reported in the past two weeks improved from last month’s  and is more in line with our  late 2011 numbers.  They were also higher than three of the past 4 April’s.  So far this entire month 43 closed sales have been reported to our MLS compared to 43 last month,  34 in February,  21 in January,  33 in December, 37 in November, 47 in October, 29 in August, 55 in June, 45 in July, 44 in June, 30 in May, 50 in April, 34 in March and 20 in February 2011.  Considering all of these numbers, my best guess is that we will close about 80 single family home sales this month and may end up slightly below April 2011 and April 2010… the first such drop in 2012.

• Our Conditional and Contingent sales are lower than the last 2 month’s but better than the past 4 April’s.  As the very most recent properties to go under contract, this number coupled with a bit lower pending sales makes me pause long enough to loose a bit of my confidence that our Lake Norman housing market is on a sustainable path to recovery.  Each month will help to support this or undercut this.

Overall this month (not just the past 2 weeks) our conditional sales are very strong but our pending sales are low.  This indicates to me that we may not have a strong ending to our April sales but we should pick up again in May/June.  So, inventory remains low, sales are at least steady if not improving.  Not quite as strong a statement as the past few months.

With our range of the months of supply of active listings at about 11 months using our 83 closed sales in March compared to the national average of 9.4 months and a balanced real estate market of 6-8 months, we clearly have a ways to go.  Improving national economic and jobs numbers and improving consumer confidence are needed to support the current healing of our Lake Norman housing market. I continue to encourage my buyers to buy if they find a good home at a good price, especially waterfront homes.  While I don’t anticipate prices going up in Lake Norman this year, I also don’t see that many truly exceptional bargains. (Less than 8% of our inventory are distressed properties: foreclosures and shortsales).  Prices in general are low as are interest rates.  In my opinion, 2012 represents a great opportunity for potential Lake Norman home buyers.  Is that a light I see at the end of the tunnel?  Only time will tell!

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*Compiled from the Charlotte Regional Multiple Listing Service’s data, this chart enables you to focus on your specific price range(s) rather than use the broad-brush approach thus allowing you to size up your competition and better position yourself.

** Compare this to last year’s first quarter sales analysis of Lake Norman homes by price range

How to read this report:

• First choose a price range.
• The next column provides the actual number of listings sold in this price range in the 1st quarter of 2012
• This is followed by the percentage this price range represents of the total number of listings sold in all of Lake Norman area 13
• Next is the number of active listings in this price range
• This is followed by the percentage this price range represents of the total number of active listings
• Finally, the last column represent the absorption rate or the number of months of supply for each price range based upon the number of listings divided by the number of sales.

Some Findings:

• Sales of Lake Norman homes when compared with the amount of inventory remain strongest in the lowest price ranges.  The $0 – $399,999 price range represented 51.6% of Lake Norman home sales and only 39% of the active listings. Properties up to $399,999 currently have an absorption rate of 9.3 months compared to the first quarter of 2011 when they had 12.7 months of supply.
• The second strongest price ranges these past 3 months were the $400,000′s, $600,000′s and $900,000′s, all of which had higher percentages of numbers sold than percentages of active listings.
• Our weakest price ranges in the past 3 months were the $700,000′s, $800,000′s and homes over $1,500,000.
• 12.21% of our home sales were at or above  $800,000 compared to 9.66, 12.92% in the 3rd quarter of 2011 and 14.3% in the 2nd quarter of 2011.  Once again we only had 1 closed sale over $2 million.  Our luxury housing market in Lake Norman definitely slowed down in the fourth quarter and early in the first quarter.  However, sales in the $1 million – $1.5 million definitely picked up in March.
• Our overall Months of Supply increased slightly from the 4th quarter 2011 in large part due to our seasonal slowdown in winter.  To put this year in perspective, in the first quarter of 2011 we had 21.99 months of supply and, in the 4th quarter of 2009, we had a staggering 46.4 months of supply of homes for sale in Lake Norman! All of our Lake Norman real estate numbers are trending in a positive direction and have been for quite some time.  (see my other Lake Norman home sales analysis by clicking on the Market Reports category in the right hand column of this page.

As a buyer, the chart above will show you where you might face the stiffest competition and at what price ranges you might see opportunities.  As a seller, you can look at the Lake Norman real estate market’s activity by price range and if you are right on the cusp of, for example, a $700,000 listing price, it would clearly be prudent to price your home in the high $600,000’s  where there were three times as many properties sold (and more buyers) and comparatively less competition in active listings.

Questions about this report or the overall Lake Norman real estate market?  Send me a quick email: diane@dianeaurit.com.

Just for fun, I also created a sales chart by price range for all of 2011:

Please note that in all of the price range charts I am actually using data from the 15th of the month so these numbers won’t match perfectly with the monthly or annual sales numbers I provide.

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