Lake Norman Real Estate Market Reports

Lake Norman Real Estate: Are Foreclosures Driving Our Current Market?

Lake Norman Foreclosures
We are bombarded by national and regional housing statistics and prognostications in the news practically every day.  Even our Charlotte Regional Real Estate Association provides monthly data by our Charlotte Multiple Listing Service’s defined areas including Lake Norman.  However, none of these resources provide specific numbers that enable us to get a grasp on how big a role distressed properties like foreclosures and short sales are playing in our local housing sales today.

I decided to analyze just the sales month-to-date for this month, January 2010, by reading each sold listing’s individual MLS  listing information and remarks to figure out the actual category in which to place each sale.  So far 40 homes have been reported as sold this month.  I broke down these sales into four categories: 

Type of Sale 

  • Foreclosures:  There were 12 bank-owned properties that sold representing 30% of our total sales this month.
  • Shortsales:  3 sales indicated in the remarks that they were short sales representing 7.5% of our total.
  • Bargains/Sell below tax values: 16 properties sold below their assessed tax values, in some cased substantially below.  These represent 40% of the total sales.
  • Regular Sales/Sales above tax values: A total of 9 properties sold at or above the assessed tax values.  It is impossible to know from the MLS data if any of these were distressed but there was no indication that they were in their remarks. These represent 22.5% of our total sales this month.

Sales by Price Range 

  • Up to $250,000:   17   or     42.5%
  • $251,000 – $500,000:   15   or    37.5%
  • $500,000+ :    8   or      20%

 Lake Norman Area 

  • Iredell County/Mooresville:   24   or   60%
  • Mecklenburg County/Cornelius % Huntersville:     6   or    15%
  • Lincoln County/Denver:     8    or    20%
  • Catawba County/Sherrills Ford:     2    or      5% 

Summary

  • This past month approximately 4 out of every 5 sales were distressed in some way.  Slightly over one third were foreclosures and shortsales and another 40% sold well below their assessed tax values.  There is no doubt that bargains are what are driving our Lake Norman home sales right now just as they have for quite some time.
  • 42.5% of all of our January sales were $250,000 or less and 80% were $500,000 or less.
  • 60% of our sales were in the greater Mooresville area in Iredell County. The second most active area was Denver.  It is interesting to see how few homes sold in Cornelius, Huntersville and Sherrills Ford.

 As I have written before, there are truly two different kinds of active listings in our Lake Norman area.  There is the group of distressed properties that are listed well below the historic highs and  then there are the majority of active listings that are priced at levels more appropriate for two years or more ago.

There is a great disparity growing between the prices of properties that have sold in specific neighborhood or community and the current active listings that are not yet distressed sales. I have found this in such neighborhoods as The Point, The Harbour, Bay Crossing.  The disparity can be as much as $50 per square foot!  Serious buyers know the recent low sales numbers so get frustrated when they view comparable active listings that are priced significantly higher.

The million dollar question is what is going to happen to all of our active listings that are over priced?  Are they too headed for foreclosure or will the sellers simply wait out the market?

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5 thoughts on “Lake Norman Real Estate: Are Foreclosures Driving Our Current Market?

  1. Jody Campbell says:

    Great and informative article. Is it correct to assume that most (if not all) of the foreclosures and shortsales were also sold at prices below their tax values? If so that means that 77.5% were under tax value which is interesting.

  2. Great article and research. It’s interesting when talking about tax values to note the date of the latest assessment. So much has changed in the last couple of years regarding real estate values, there are many reasons for the tax value to be higher than sales now. Sometimes I see descrepancies on reporting the actual assessment year depending on the database, and that can make a huge difference in the perception of the relative accuracy of the tax value. That’s just more reason to pretty much ignore tax value when talking about current market value.

  3. Stan,

    Thank you for weighing in on our market. I agree with you regarding tax values. They are so inaccurate not only based upon the year of the latest assessment but based upon how old the property is. My clients are finding it nearly impossible to appeal their current tax bills so going forward we will see properties assessed too low AND too high.

    That said, I do look at the assessed values whenever I am quickly trying to guess whether the seller is upside down/has negative equity. It usually holds true that if the assessed value is higher than the listing price then the property is most likely listed below what the sellers paid for the property. While not 100% accurate, it is helpful.

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