You had to have been completely out of touch with the world not to know that this past month our US economic news was a bit bleak.  Talk of a double-dip recession was bantered about based upon weak numbers, most importantly jobs.

Here in the greater Lake Norman communities, particularly Mooresville, there are actually a number of new small business, restaurants and service providers.  And, according to Business Facilities.com   North Carolina ranks fourth in the US for Economic Growth Potential, sixth for Best Business Climate,  seventh for Biotechnology Strength and sixth for Biofuels Manufacturing Research Leaders.  They also ranked Charlotte 5th in their Top 10 of Metro Areas with the strongest Economic Growth Potential.

I am confident that our long-term future is very bright for our Lake Norman communities.  I wish I could say the same about our current housing market! 

The most stunning and shocking news hit my email on September 3rd. Simonini Builders, one of our best and most forward thinking builders, unexpectedly announced they are “winding down” all of their current building and will not be taking any new orders for custom homes.  After much fanfare about their new Preserve at Robbins Park community representing the future of our Lake Norman housing including a focus on energy efficiency and smaller, more effective floorplans AND the fact that they are the only builder participating in our annual HomeArama featured in the September issue of our Lake Norman Magazine, it appeared that Simonini was going to lead our local builders out of the recession.  Instead they are closing their doors permanently.

August has been a relatively weak month of the year for Lake Norman home sales.  This past August our sales were almost flat compared to 2009:

The total number of Lake Norman single family homes under contract on August 31, 2010  were identical to our numbers of  157 when compared to the end of July, a 7% decline from June’s 169  and a drop of 15.5% when compared to the 200 at at the end of May.   

Let’s take a look at the details:

• Active Listings dropped 11% from a year ago. .  Based upon our August sales, we now have 19 months of inventory.  Our goal of a truly balanced housing market of 6-8 months of supply is still out of reach.. To achieve these numbers given our current inventory levels we will need to sell about 175 homes per month!  Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market.  Note that the average price of our active listings dropped 11% compared to August 2009.  We continue to see a number of price reductions.

• Contingent Sales, which don’t account for a signifcant segment of our housing market, dropped 14%.

• Conditional Sales increased 37% this month compared to August 2009  but were about equal to last month.  These are homes that  just went under contract and still have financial and inspection conditions. They will represent closed sales in either late September or October. October 2010 will most likely be slightly below our October 2009 sales.

• Our  pending sales represented a 22% decrease from a year ago and a 12% drop from the end of July.    These are the contracts that are past inspections and are just waiting to close.  Pending sales are usually the best indication of sales in the next few weeks. These numbers would indicate that our closed sales this month will be below September 2009 and below last months’ as well.

• The number of closed sales were up 3% from August 2009 and down 8% from last month.  

Here is a breakdown by price-range of our August 2010 closed sales:

• $42,000 – $199,999:   10
• $200,000 – $299,999:   19
• $300,000 – $399,999:   11
• $400,000 – $499,999: 8
• $500,000 – $599,999:  4
• $600,000 – $699,999:  7
• $700,000 – $799,999: 2
• $800,000 – $899,999:  4
• $900,000 – $999,999:  0
• $1,000,000 – $1,999,999: 3
• $2 million+ : 2

57% of our Lake Norman home sales were under $400,000  compared to 46% last month.  75%were under $600,000 and 84% were under $700,000.  The $700,000 – $1 milllion price range has slowed significantly.

6-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers 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 and 2010 and the totals in the prior calendar year.  The columns may not add up but I do my best with what I have to work!

Summary

I love this chart because it puts our Lake Norman home sales numbers in the context of the past 6 years.    For the past three years our August sales dipped after July yet going back to 2005 – 2007, August was actually a much stronger month for Lake Norman homes sales.   It looks like we will have decent sales numbers for this October especially when compared to 2008.  The 4th quarter of 2008 and first quarter of 2009 which was during the US financial crisis, may represent the weaked sales number for our Lake Norman housing market which is a good thing.  However, our recover as been very slow.

With our luke warm US economy and low consumer confidence, I actually think that this fall and winter will be a good time if you are a Lake Norman home buyer.  Sellers should have real concerns about the short-term future and should be willing to negotiate more seriously!

 OTHER ARTICLES of  INTEREST 

Lake Norman Relocation Resources

The Point, Lake Norman’s Ultimate Luxury Community:  A 9-Year Case Study

How YOU can search for “distressed” properties for sale in the Lake Norman communities

Lake Norman Real Estate:  What Does the Closing Attorney

On June 10th, 2009 we got some stunning news regarding our Lake Norman real estate market.  Mega developer Crescent Resources LLC announced that they had filed for Chapter 11.  Crescent Resources, a joint venture between Duke Energy and Morgan Stanley Real Estate Fund, has been responsible for creating and developing Lake Norman’s most prestigious and popular communities including The Point, The Peninsula, The Harbour at The Pointe, The Farms, Sailview,Northview Harbour and their latest venture Falls Cove.

It wasn’t until July 15th 2010 that Crescent Communities broke their silence and sent out a news alert to Realtors announcing that they had emerged from their Chapter 11 Bankruptcy on June 9, 2010, touting their still developing communities of The Point and The Farms and announcing some interesting changes and news regarding their struggling, newest venture, Falls Cove located north of Mooresville.

With the exception of Falls Cove, I am constantly showing property in all of the Crescent Communities.  For buyers looking for upscale communities with great amenities the Crescent communities are some of the best available on Lake Norman on both the east and west sides of the lake.

I decided to do a side-by-side comparison of these 7 communities’ sales and homes on the market as of today, August 26, 2010 to see if the numbers reflect my own experiences:

* All of these numbers are from the Charlotte Regional Multiple Listing Services

** These numbers include waterfront and non-waterfront listings

Active Listings/Months of Supply: If you look at the months of supply, you can see that The Farms and The Harbour at The Pointe are slightly out performing the others. However, considering that The Point and The Peninsula have many $1 million plus waterfront homes, they are actually doing quite well and all four of these communities are out-performing our overall Lake Norman real estate market.  What is worrisome to see are the months of inventory of Northview Harbour and to a lesser degree Sailview and Falls Cove.

Closed Sales Year-To-Date 2010:  Again, Northview Harbour stands out (in a bad way) with only 2 closed sales in the past 8 months.  From my perspective, Mooresville leads the Lake Norman sales activity in general these days which is reflected by the sales in The Point, The Harbour at the Pointe and The Farms.  Popular schools, low taxes, an ever growing supply of restaurants, shopping and services and the light at the end of the tunnel for the widening of Brawley School Rd. all contribute to this trend.  Sailview, which is in Denver on the southwest side of Lake Norman, is still a popular location because of its convience to Charlotte and the newly completed Hwy 16.  That leaves Sherrills Ford kind of hanging in the wind.  Located on the northwest side of Lake Norman, it is farther from shopping and amenities and doesn’t seem to have the draw the other communities have.  It is best suited as a second home or for those empty-nesters who want to get away from it all.

Days on Market (DOM): Despite being a slightly older community, The Harbour has consistently out-performed most Lake Norman communities even before the recession.  Today their numbers support the fact that this is simply a great community in which to live.  On the other extreme, Falls Cove, which has barely begun to be developed, has suffered the most during this recession.  The higher numbers in the most upscale communities of The Point and The Peninsula are partially a function of the number of very high-end waterfront estates which tend to take substantially longer to sell.

% Listing Price to Selling Price: What is most interesting about all of these numbers is that the lowest is still very high at 93%.  In our Lake Norman housing market, we see less of the low-ball sales than I have observed in other parts of the country.  Here, overpriced listings will sit until they are reduced to near market value before selling. Only well-priced listings are selling because buyers are so nervous about over paying in this market.  It is rare to see a sale that isn’t a “bargain” or at least perceived as a good value.

$ Per Square Foot:  I actually just included these numbers as an FYI.  Because The Point and The Peninsula have recently had some $3 million+ sales,  and more $1million + sales their numbers are skewed when compared to the rest.

This is simply a general overview.  When considering buying or selling, I highly recommend that your Realtor do a more fine-tuned market analysis focusing on the specifics of your Lake Norman home!

RELATED ARTICLES

Is ‘The Point’ Lake Normans Ulitmate Luxury Home Community?

The Peninsula, Cornelius’s Luxury Lake Norman Community

 The Farms, A Crescent Community in Lake Norman with a more Casual Feel

The Harbour at The Pointe; A Popular Lake Norman Subdivision

Relocating to Mooresville NC

Lake Norman Relocation Resources

Due to the eclectic nature of our Lake Norman waterfront homes, it is very difficult to make broad brush assumptions and statistical analysis that are truly meaningful.  How do we compare a home at the end of a cove to one with main channel shoreline let alone a 1980′s cottage on a rustic road to a grand estate in The Point?  Even our waterfront lots vary in price from the $100,000′s to well over $1million.

That said, Lake Norman waterfront home buyers want to know as much as possible about our current waterfront home sales in order to determine when to buy and how much to offer.

My current and very general rule-of-thumb is that at our peak waterfront homes sold on average at about $300 per square foot depending on the age, condition, quality of water, location etc.  Today my rule-of-thumb average price is about $200 per square foot. 

To offer my specifics, I pulled data from our Charlotte MLS for waterfront properties since May 1, 2010 ranging in price from $300,000 to $1,500,000 thus eliminating the extreme highs and lows.  Here are the results:

The most important take aways from these numbers are:

• The average/median price per square foot for closed waterfront homes since May 1st does come in at about $200

• The average sales price to listing price was 94% .  Yes, there are low-ball offers and sales far below the listing price but overall in our Lake Norman market sellers are more likely to keep reducing their price until it is in the market price range before buyers will make serious offers.  All statistics can be tossed out when it comes to shortsales.  I sold one that was listed at $799,000 for $640,000 but that is not common.

• Our current trend is about 18.6 waterfront home sales per month.  With an inventory of 432 active listings we have about 23 months of inventory of waterfront homes priced from $300,000 – $1,500,000.  Keeping in mind that 6-8 months is a balanced market for supply and demand, we have over 3 times the number of waterfront homes on the market than we should.

 When considering a waterfront home, you really need to evaluate each property separately adding or subtracting value for:

• The quality of the water and length of shoreline  (Main Channel versus end of cove).  Water trumps all else!
• Location
• Topography of the lot (steep versus flat, beach or drop off, walk-out basement)
• Quality, condition and size of the dock including the depth of the water
• Views:  Are they obstructed by trees or other homes?  Keep in mind the 50′ natural area now enforced.  Older properties are grandfathered in and may be close to the shoreline or have lawn all the way to the shore. Newer homes must adhere to the 50′ rule.
• Condition and age of the home including deferred maintenance
• Floor-plan (popular right now are master bedroom on main level, walk-out basements and open floorplans).
• Design of home; does it take full advantage of the water views?
• Seller’s financial situation.  Is it a distressed sale?

Keep in mind that of all of our land in our large Lake Norman area, the only truly limited supply we have is good waterfront lots/homes.  Once our market improves I am confident that waterfront homes will once again be a hot commodity.

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Lake Norman Waterfront Home Sales 2009

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Lake Norman Real Estate:  Our Schizophrenic Communities

The Lake Norman Neighborhoods of McKendree Road

Unfortunately, the number of Lake Norman home sales that closed in July underscores the impact of the housing tax credit expiration.  Not only did our volume of homes sold fall significantly short of last month’s 104, they also came in lower than July 2009.  In fact, July 2010 was actually the weakest July in Lake Norman home sales in at least the past 6 years!

• The total number of Lake Norman single family homes under contract on July 31, 2010 dropped to 157 or 7% when compared to the end of June’s 169 which was a drop of 15.5% when compared to the 200 at at the end of May.  This is the third month in a row that our total combined sales contracts dropped when compared to the prior month.  This would further substantiate my prediction from last month that our closed sales have peaked for this season and perhaps for the rest of 2010.  This peak can most certainly be attributed to the home-buyers tax rebate program that initially expired on June 30th.  While the deadline was extended by Congress to September 30th, this only helps currently active contracts that were opened by April 30th. 

Let’s take a look at the details:

• Active Listings dropped 10% from a year ago.  However, they were up 1% from last month.  Based upon our July sales, we now have 18.4 months of inventory.  At a time when our sales are slowing down our number of active listings is creeping upward. We are moving farther away from our goal of a truly balanced housing market of 6-8 months of supply. To reach these numbers given our current inventory levels we will need to sell about 175 homes per month!  Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market.  Note that the average price of our active listings dropped 7% compared to July 2009.  We continue to see a number of price reductions.

• Contingent Sales declined.    A  61% drop in these isn’t that significant in itself but it does appear that sellers, whether banks or homeowners, are less willing to accept an offer when it is contingent upon a buyer’s home selling.

• Conditional Sales increased 44% this month compared to June 2009  but were equal to last month.  These are homes that  just went under contract and still have financial and inspection conditions. The good news is that these are not sales related to the tax credit so we may see slightly improved sales when compared to last year either this month or next month.  (Last August we sold only 67 homes in all of Lake Norman).

• Our  pending sales represented a 10% decrease from a year ago.    These are the contracts that are past inspections and are just waiting to close.  Pending sales are usually the best indication of future sales and help substantiate that we will be lucky to meet our August and September 2009 sales numbers.

• The number of closed sales were 14% lower than July 2009 and a whopping -27% drop from last month.  

Note that our average sales price decreased 6% compared to 2009.  Unlike the past few months, we experienced a drop in the average price of conditional home prices as well.  Because of the nature of our Lake Norman housing market, we really can’t use the average sales price to determine if our prices are increasing or decreasing because our inventory ranges from under $100,000 to $9 million.  Our average prices vary with the prices of the homes sold.  A few luxury home sales can skew our average prices substantially. 

Here is a breakdown by price-range of our June 2010 closed sales:

• $42,000 – $199,999:   10
• $200,000 – $299,999:   9
• $300,000 – $399,999:   14
• $400,000 – $499,999: 9
• $500,000 – $599,999:  11
• $600,000 – $699,999:  9
• $700,000 – $799,999: 6
• $800,000 – $899,999:  1
• $900,000 – $999,999:  3
• $1,000,000 – $1,999,999: 3
• $2 million+ : 0

43% of our Lake Norman home sales were under $400,000  compared to 51% last month.  70% were under $600,000. After seeing 3 sales over $3,000,000 last month, we closed only 3 sales over $1 million this month.

6-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers 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 and 2010 and the totals in the prior calendar year.  The columns may not add up but I do my best with whatI have to work with!

*** Our Charlotte Regional MLS  converted our entire data base over to a new version of  TEMPO program this past month.  Because of the confusion related to this conversion, July’s data may have more inaccuracies than usual.

Summary

I love this chart because it truly tells the whole story.    What can I say? This past July was the slowest in over 6 years.  After 9 months of year over year increases, this is the first month we have fallen below our prior year’s sales.

This past month we saw a dip in our first-time home-buyer price ranges which is most likely due to the end of the tax credits. Foreclosures, shortsales and other distressed sales are still playing a big role in our Lake Norman housing market. However, relative bargains are also inspiring higher priced buyers to jump off of the fence. I am seeing multiple offers or very fast sales of  some distressed AND non-distressed sales.   There is still a serious disparity between the prices of many of our closed sales when compared to similar active listings.  But, I have noticed more sales at slightly higher prices than the prior foreclosure/shortsale lows.  

Lake Norman is not alone in our housing slowdown. A recent article like this one:  ” Real Estate Market: Worse than expected” in Inman News pretty much sums it up.   And, the June pending sales nationwide fell to a new record low according to the National Association of Realtors.

I think we are in for a rocky ride through the rest of 2010 and 2011.  The million dollar question is how long is it going to take to truly see real signs of a sustained recovery both nationally and here in Lake Norman?

One last note:  30-year fixed conforming loan rates are as low as 4.1%!  Hopefully, these low rates will inspire more buyers to jump off the fence and into the lake!

 OTHER ARTICLES of  INTEREST 

Lake Norman Relocation Resources

The Point, Lake Norman’s Ultimate Luxury Community:  A 9-Year Case Study

How YOU can search for “distressed” properties for sale in the Lake Norman communities

Lake Norman Real Estate:  What Does the Closing Attorney

Just as I predicted, our Lake Norman home sales broke through 100 in June, thanks in good part to the June 30th deadline for the home-buyer tax credits.   Keeping this in mind, there are reasons to be cautious when assessing our current Lake Norman housing market:

• The total number of Lake Norman single family homes under contract on June 30, 2010 dropped 15.5% to 169 when compared to the 200 at beginning of the month.  This is the second month in a row when our total combined sales contracts dropped in double digits when compared to the prior month.  This would leave me to conclude that our closed sales have peaked for this season and perhaps for the rest of 2010.  This peak can most certainly be attributed to the home-buyers tax rebate program that initially expired on June 30th.  While the deadline was extended by Congress to September 30th, this only helps currently active contracts that were opened by April 30th. 

Let’s take a look at the details:

• Active Listings dropped 13% from a year ago.  However, they were up 2% from last month.  Based upon our June sales, we now have only 13.3 months of inventory.  This is the lowest number I have calculated during the past two years of doing these sales analysis.  However, this is not good enough to achieve a truly balanced housing market of 6-8 months of supply. To reach these numbers given our current inventory levels we will need to sell about 160 homes per month!  While we are trending in a positive direction, we need to sustain higher sales numbers through the second half of 2010 all the while hoping that we don’t have too many new listings coming on the market.  Of course, buyers would love to see new listings!  Note that the average price of our active listings dropped 13%.  We continue to see a number of price reductions.

• Contingent Sales declined.    A 40% drop in these isn’t significant in itself but it does appear that sellers, whether banks or homeowners, are less willing to accept an offer when it is contingent upon a buyer’s home selling.

• Conditional Sales increased 52% this month compared to June 2009  after dropping to a 27% increase last month and compared to a whopping 149% two months ago.  These are homes that  just went under contract and still have financial and inspection conditions. The good news is that these are not sales related to the tax credit so we are seeing a modest continuation of our improved sales when compared to last year that are because buyers simply want to move to Lake Norman!

• Our  pending sales represented a 2% increase over a year ago.    These are the contracts that are past inspections and are just waiting to close.  Pending sales are usually the best indication of future sales and help substantiate that we are on track to meet or exceed the July 2009 sales number of 91 but may NOT exceed the July 2008 sales numbers.

• The number of closed sales were 20% higher than June 2009.  

Note that our average sales price increased by 20%.  Like the past few months, we also saw increases in the average price of conditional and pending home prices.  This does not mean our prices are increasing.  Rather, it means that our higher priced listing sales are improving. Because of the nature of our Lake Norman housing market, we really can’t use the average sales price to determine if our prices are increasing or decreasing because our inventory ranges from under $100,000 to $9 million.  Our average prices vary with the prices of the homes sold.  We are seeing more luxury home sales which can skew our average prices substantially. 

Here is a breakdown by price-range of our June 2010 closed sales:

• $42,000 – $199,999:   15
• $200,000 – $299,999:   16
• $300,000 – $399,999:   20
• $400,000 – $499,999: 13
• $500,000 – $599,999:  11
• $600,000 – $699,999:  5
• $700,000 – $799,999: 7
• $800,000 – $899,999:  4
• $900,000 – $999,999:  1
• $1,000,000 – $1,999,999: 7
• $2 million+ : 4

51% of our Lake Norman home sales were under $400,000 and 75% were under $600,000.  But, we had THREE sales over $3,000,000!

6-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers 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 and 2010 and the totals in the prior calendar year.  The columns may not add up but I do my best withwhat I have to work with!

Summary

I love this chart because it truly tells the whole story.  While our sales trends are positive, you only need to take a look at the sales back in 2006 and 2007 to realize how far we have fallen. 

As predicted last month, our June sales did exceed both 2009 and 2008.   Yes, in sales volume, our market appears to have turned a corner and in this respect we probably hit bottom last winter.

Foreclosures, shortsales and other types of distressed properties plus first-time home-buyers are still a good portion of our market.  But, relative bargains are also inspiring higher priced buyers to jump off of the fence. For the first time in several years I am seeing multiple offers or very fast sales of non-distressed sales.   There is still a serious disparity between the prices of many of our closed sales when compared to similar active listings.  But, I have noticed more sales at slightly higher prices than the prior foreclosure/shortsale lows.  

One last note:  30-year fixed conforming loan rates are as low as 4.1%!  Hopefully, these low rates will inspire more buyers to jump off the fence and into the lake!

 OTHER ARTICLES of  INTEREST 

Lake Norman Relocation Resources

The Point, Lake Norman’s Ultimate Luxury Community:  A 9-Year Case Study

How YOU can search for “distressed” properties for sale in the Lake Norman communities

Lake Norman Real Estate:  What Does the Closing Attorney