It is important to note that these numbers are only as good as the agents who report them. Expect an adjustment in our 46 sales in January upward perhaps two more sales by the end of the month since it takes some Realtors several weeks to actually input their sales into our MLS.  I create these reports early in the month while the information is still very fresh so always pad the sales upward just a bit.

Here are the January 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:

Some significant additional interesting statistics for you:

• “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 31.1% of our closed sales in January which was a slight drop from the 36.7% last month, 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. Our active buyers right now are clearly folks looking for bargains. The good news is that our number of distressed active listings dropped to 9.5% of our total number of homes for sale in Lake Norman compared to 10.9 % in December which indicates that our ratio of distressed new listings is actually decreasing.  We are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
• 22% of our closed sales were waterfront homes down from 33% last month, 19% in November,  28% in October and 38% in September.
• 60.9 % of our January sales were under were under $400 and 71.7% were under $500,000. Clearly our lower priced homes are still driving the market.
• Our average prices are down in our pending and closed sales but I believe this is more a reflection of our weaker higher end sales than actual price declines. Note that the average price of our conditional sales is 15% higher!
• On February 1st the number of active listings for all of Lake Norman totaled 811, up from 752 on January 1st which was the lowest number since I started these reports in 2007.  To put this number in context, back in June of 2008 we had 1789 active listings.  Today we have 843 active listings in all of Lake Norman (area 13).

A closer look:

• The number of Active Listings in Lake Norman increased 7.8% from last month but were 23% lower than last January. It should be expected that our inventory will continue to rise this spring but hopefully we will remain well below last year’s numbers. Our absorption rate/months of supply of active listings increased from 12.5% last month back up to 17.6% thanks to our low January sales.  Our shrinking inventory  is helping but at this lower pace of sales we are still twice as high as a balanced 6-8 months of supply in Lake Norman area (MLS area 13).

• 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, remain extremely low most likely because sellers are unwilling or unable to take on the risk of waiting for the buyer’s home to sell before closing.

• Conditional Sales increased for the second month in a row, this time 16%  when compared to January 2011  and  19.7% higher than last month’s. Our Lake Norman housing market has definitely picked up! These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late February/March. Based upon these numbers our closed sales in this month and next should exceed the same months in 2011.

• Pending sales were also up compared to January 2011 AND last month as well.    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. While you are reading in the news about the national increase in pending sales here in Lake Norman our pending sales have been down so it is significant to see them picking up again!

• The number of closed home sales in Lake Norman in January were just about equal to January 2011.  While we didn’t reach January 201o’s 53 sales it is good to see us at least equal to last year’s. (See the annual chart below).

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

• February 1, 2012: 155 (much better than the past two months!)
• 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 now trending upward again after a lag of several months.  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 January 2012 closed sales in Lake Norman’s area 13-1 to 13-5:

• $42,000 – $199,999:  11        
• $200,000 – $299,999: 11 
• $300,000 – $399,999: 6

(These price ranges represented 60.9% of  January’s sales )

• 400,000 – $499,999:  5
• $500,000 – $599,999: 1

(These price ranges represented 13% compared to 16.6% last month)

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

(Solds for $600,000 – $1mill = 23.9% compared to 20% last month)

• $1,000,000 – $1,999,999: 1  (The highest sale in January was only $1.075 million!)
• $2 million+ : 0

(Solds $1million+ = 2% )

 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 Good News and the Bad:

Very Good:

• Inventory is way down
• Conditional and Pending sales are up!
• Number of distressed homes for sale remains low and is actually decreasing as a percentage of our total inventory
• We seeing more and more new construction popping up (Not spec homes)
• Higher-end waterfront lots are selling again. Another sign that construction is returning
• Interest rates are at all time lows
• Unemployment rates are dropping locally and nationally

Bad:

• 47.8 % of our Lake Norman sales were under $300,000!
• Distressed sales comprise a larger percentage of our sales than our inventory.  Buyers are still motivated by bargains.
• Our highest closed sale last month was $1.075 million.  Our luxury home market was hit hard in the past three months but seems to be improving.
• With a shrinking inventory of active listings, buyers have fewer options.  With fewer “screaming bargains” will buyers sit back a bit this winter hoping for for another wave of foreclosures or will they buy as they did over the summer realizing that those days are behind us? The national news reports about a potential onslaught of  new foreclosures may keep buyers from taking advantage of our low prices right now.
• Home loans, especially construction loans, are still a challenging process.

I still believe that, overall, our home prices have stabilized.  I’m not seeing, for instance, the extremely low prices of waterfront home sales with good water that I did two years ago. The future of our Lake Norman real estate market still depends primarily on these two things:

1. How much ”shadow inventory” do we have in our Lake Norman area?  Will we see more distressed properties coming on the market later this year or next year? So far this hasn’t been the case.

2.  Consumer confidence based upon the national/global economy.

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.  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 for the most part having hit bottom it is a good time to buy.  With only  9.5% of Lake Norman’s current listings being “distressed sales”,  the “shadow inventory” hasn’t impacted our market.  At this pace, I think our market will remain at a rocky bottom of sorts with a continuation of the erratic ups and downs in 2012.

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I was previewing Lake Norman waterfront properties last week on a spectacularly beautiful day and decided to take some photos.  This is about as good as it gets for what we call “main channel” views.  At the southern portion, the main channel of Lake Norman widens out quite a bit which creates these vast, wide open water views.  As you travel to the north side of the Brawley Peninsula, the main channel narrows a bit and curves around our many peninsulas making the main channel views quite different; a bit more private.

And yes, that is a real palm tree!

Imagine waking up to this every morning or lounging on a summer afternoon with a cold sweet tea!  Jump in the pool or the lake…so many decisions!

To make your desktop calendar, go to the round button at the top of this site’s home page entitled: “Lake Norman Calendar”. Click on this button and up will come this image of my Lake Norman photo wallpaper calender for January 2012. All you have to do is right click and select “set as background”. If you would like a copy of this photo without the calendar, just send me an email.

FREE $25 GAS CARD!

I need your HELP!  I would love to use one of your favorite photos depicting life here in Lake Norman.  (Optimum size is a landscape photo about 2MB or about 1600 x 1200 pixels). I will give a $25 Gas Card to anyone who provides a photo that I use as one of my monthly calendars.  If you’d like to submit a photo  or an idea for a future calendar, please send it to…

diane@dianeaurit.com

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Let’s face it, we are being bombarded by economic predictions of all kinds this month; so much so that I even hesitated to add my own to the massive pile.  But, since my mission is to provide you with  insight into our Lake Norman housing market and the role the national, state and local economy plays on our successes and weakness, I will once again do my best to assess and make predictions for 2012.

The last line of my 2011 predictions was actually a fairly accurate summary of 2011:

2011 may hold some surprises but for the most part it will be a year of stops and starts; ups and downs and hopefully dwindling inventory.

And, indeed, we did experience a significant shrinking of our inventory of active listings so the 2011 Lake Norman real estate market actually exceeded my expectations.

In some respects, I could pretty much just copy my 2011 predictions for 2012 as I really don’t see many short-term signs that would justify a significant change in either direction. With distressed sales currently representing only 10.8% of our active inventory in my opinion short sales and foreclosures will not drive or dominate our market as they did in the past, particularly 2009-2010.  That said, in the first two weeks of  2012, 46% of the properties that just went under contract were either short sales, pre-foreclosures or bank-owned which underscores the mood of our current buyers…they want bargains when possible.

Before I go into more detail, let’s look at the larger economic issues that will impact our local market.

The Big Picture:

2012 will be about jobs, consumer confidence, stability of the European economy, handling of the backlog of foreclosures not to mention a year of political elections.

• Most economists seem to agree that our country will experience a year of modest growth  in 2012.
• Interest rates are currently at record lows (under 4%) and are expected to rise hand-in-hand with the strengthening US economy but remain historically low.
• “A fresh emphasis on healing the housing sector by…the Federal Reserve, in the Obama administration and in state capitols reflects the view that a healthier real estate market would go a long way in strengthening the economy” according to an article on November 3, 2011 in Reuters. Good news that they are focusing on housing!
• The proposed Feds pilot program turning bank-owned properties into rentals and a proposal that Fannie and Freddie provide an 12-month reprieve or reduced payments for the unemployed are supported as positive efforts that will help stabilize our national housing market.  Home loans will continue to be a very challenging process and will play a role in hindering the ability for our housing market to improve.
• Unlike last year at this time, nationally and locally our unemployment rates are falling.
• Inventory of homes for sale and mortgage delinquencies are dropping nationwide and here in Lake Norman
• Regarding shadow  inventory of properties in the foreclosure process, one pundit summed it up very well: ”Distressed inventory’s impact isn’t so much to lower prices as to prevent them from rising for many years.”
• National Association of Realtors chief economist Lawrence Yun said: “Lower inventory is a signal that price declines are coming to an end….prices have been moving both up and down with no consistent direction since 2009.  In other words: prices have been roughly stable for the past 3 years.”
• The National Association of Home Builders is forecasting GDP growth in 2012 at 2.2-2.4% and single-family housing starts to gain 17% in 2012 “following what was almost the worst year on record in 2011… The bottom line for 2012 is that, while demand for new homes won’t ‘burst forward’, it will slowing improve now that the overall housing market appears to have reached bottom and started back on the path to recovery.”
• An article on 12/11, Money Magazine noted that 2012 is a great year to buy “if appropriate for you” based upon cheap interest rates and a slight uptick in the national housing market
• According to a survey (sponsored by Zillow Inc) of more than 100 economists, real estate experts and investment strategists, Home prices…won’t hit bottom until late 2012 or early 2013.
• An article this week in Kiplinger noted: “The bleeding is just about over, but don’t expect a speedy recovery…the worst is over…this doesn’t mean prices across the nation are poised to rebound any time soon.”  “2012 will be the year that prices finally stabilize, setting the stage for gains in 2013.”

North Carolina:

Our Lake Norman housing market is also going to be impacted significantly by regional economic components, especially jobs.

• “Economists are predicting a sluggish economic recovery for North Carolina and the nation in 2012″ according to an article in the Charlotte Observer on 1/4 2012.    According to attendees at the recent Economic Forecast Forum sponsored by the NC Chamber and NC Bankers Association, “don’t expect dramatic improvements in the state unemployment rate this year.”
• Predictions for North Carolina: N.C. Jobless rate will drop to 9.3% from 10% in 2012. N.C. economic growth for 2012 will be 2% and N.C. will gain 40,000 jobs in 2012 compared to about 21,000 in 2011.
• North Carolina is still a destination for many from around the country ranking among the fastest-growing states according to the U.S. Census Bureau.  Altas Movers also ranked North Carolina in the top ten “inbound” states where more people move into the state than move out.  Good news for our long term market!
• North Carolina also ranked at the very top for the number of retiree’s moving to the state by the U.S. Census Bureau.
•  Forbes and Site Selection both ranked North Carolina 3rd in the best states for business/best business climate and in 3rd place on the list of migration to rather than from the state.
• North Carolina ranks among the states with the lowest number of foreclosures, coming in at 34 according to a Charlotte Observer article on 11/11/11.

My Predictions:

• Buyers will continue to expect bargains sometimes unjustifiably so.  With such low inventory, I am seeing properties that have been sitting selling at prices that are higher than the past few years. Sellers will need to steel themselves for low-ball offers as buyers continue to feel the need to attempt to get a very low price.  This will change as prices stabilize and consumer confidence rises.  It is important to note that this varies greatly by price range and neighborhood.
• Foreclosures and short sales will continue to make up about 1/3 of our Lake Norman sales but represent only about 10% of our inventory. We will continue to see active listings slowly evolving into short sales or foreclosures and new foreclosures coming on the market as the shadow inventory is cycled into our market.  These will sell at a disproportionately higher rate that non-distressed properties.
• Shadow Inventory?  One of the biggest questions I have again this year is just how many Lake Norman homeowners are either waiting to sell until they see a turn in the market or have withdrawn their homes from the market while planning to bring them back on the market once they see signs of improvement.  Our inventory is currently at record lows and we are closing in on our goal of 6-8 months of supply. The question is will a large number of sellers who have been waiting now jump into the market as they see sales improving thus weakening our recovery?  And, how many foreclosures are coming?
• More of the same?  Yes and no.  We are starting out 2012 with weak sales numbers but significantly lower inventory as well.  In 2012 I think we will continue to experience erratic monthly highs and lows in sales.  Foreclosures and shortsales will continue to keep our overall average prices down but will not dominate our prices in every price range or neighborhood. As pent-up home-buyers begin to accept that our Lake Norman housing market is stabilizing, they will take advantage of the low interest rates and jump off the fence when they find the right home that suits their needs.
• With inventory so low, I predict that our sales will remain at about 900 in 2012 which is about equal to the past two years.  Our overall average prices will stabilize but there will be many fluxuations within price ranges, neighborhoods, waterfront properties.  I feel pretty confident that 2012 is the year to buy waterfront properties as I watch the inventory of nice homes with good water at great prices disappearing and not being replaced.  It is going to more important than ever for buyers and sellers to know their specific niche’s recent comparable sales and not to rely on old data.
• Be informed, be smart and be realistic!

I would love to hear your thoughts and predictions. Please leave a comment!

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Lake Norman Monthly Sales Chart for 7 Years

*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 2011 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!

Price trends since 1998:

As you can see, our volume of Lake Norman home sales peaked in 2005 while our average sales price and price per square foot peaked in 2007.  But, since our significant drop in 2009, our average sales price for all homes in Lake Norman has remained fairly stable while our number of home sales has increased about 16%.

This past year’s average price per square foot of $136 is not that far off of 2005′s $144 despite a drop to half the number of home sales.

Another interesting trend is the average days a home was on the market in Lake Norman (DOM which is the last column on the right).  This number has consistently increased since 2006.

Of course, this is a very broad generalization including so many variables related to waterfront home sales, luxury homes sales etc. but it is important to see our annual trends to get a better overview of our Lake Norman home sales and price trends.

Waterfront home sales trends since 2006:

Waterfront homes have experienced more steady rises and falls in both volume an prices.  After peaking in 2006 in volume, the number of sales plummeted 57% by 2008 and since then have steadily increased by a total of 72%.  At the same time our average sales price and price per square foot peaked in 2007/2008 and have been consistently falling since that time.  Since their peak, the average sales price has dropped 22% and the average price per square foot has dropped 29%.  Finally, the average days on market has increase 3 fold since 2008.

Our waterfront market has such a diversity of types of properties, from luxury estates to single-wide mobile homes and from open main channel water to end of tiny coves that to truly understand your own market you will need to look at the sales by price-range and by age of the property as well.  But, this overview is a good indication of our overall waterfront housing trends.

I would agree that most of the common terms to describe the current national housing market also apply to our Lake Norman real estate market:

• Erratic
• Fits and Starts
• Hopeful
• Comeback
• Cautious
• Rocky Bottom
• A light at the end of the tunnel
• The worst is over
• Price declines are coming to an end
• Home prices won’t hit bottom unitl the end of 2012 or early 2013
• Prices are stabilizing
• Shadow inventory could stall the market’s recovery
• Foreclosures May delay housing rebound to 2013

I will focus on 2012 in my annual forecast in the next few weeks!

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