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Lake Norman Real Estate Trends: 3rd Quarter 2007
As I was preparing this 3rd quarter real estate sales analysis for our Lake Norman area I took a moment to read my 2nd quarter sales analysis and was actually surprised that just three months ago I was having to justify my opinion that sales had slowed in the greater Lake Norman area. Today if you were to talk to just about any Realtor you would hear more of a doom and gloom attitude about our down-turn and how their listings are over-priced, their seller’s aren’t grasping the reality of the down-turn and concern about their future in this kind of a market. Quite a change in three months!
Now I find myself playing the opposite role, again. Rather than making a broad brush statement that we are in a down market, I know that there are many opportunities in this market if a buyer or seller is educated about their specific price-range and community. Yes, the over-all numbers reflect a decrease in sales and a drop in the average price of homes sold. However, within the greater Lake Norman area there are some hot spots and some good opportunities for buyers and sellers.
Plus, we should always keep in mind that we are not in a volatile area like California or Florida and that the greater Charlotte area economy is stable and growing. Our Lake Norman properties have been greatly impacted because of the number of transplants who are coming from markets that are very slow. I have networked with agents throughtout the country and in some places like Florida they have two-three years of inventory of active listings. But, buyers are still relocating here for jobs and baby-boomers are still looking for a Lake Norman retreat. According to an article in the Charlotte Observer: “The Carolinas rank among the top 10 states nationwide in new home growth amid an explosive population boom, according to Census figures..,”. Iredell County ranked 6th statewide and Mecklenburg ranked 8th in growth statewide.
Here is the 3rd quarter summary of Lake Norman real estate sales. All data I used was obtained through the Charlotte Multiple Listing Service and include the entire Lake Norman area #13 with the exception of the Catawba River.
Lake Norman Third Quarter Statistics Summary
.
What does this all mean? In a nut shell, sales in the Lake Norman area have dropped by about 10%, the average sales price has dropped 14.8% compared to the third quarter of 2006 and our inventory of active listings has been steadily increasing. Sales are down, prices are down and inventory is up = a buyers market. However, this does not tell the whole story. If you read my post from last week you will know that certain areas like Denver are very strong right now. And what about price ranges? Below is my 3rd quarter analysis by price range:
Months of
Price Range
# Sold
%
# Active
%
DOM
Supply
$ 1
to
$ 99,999
8
1.94%
11
0.81%
184
4.1
$ 100,000
to
$ 199,999
52
12.59%
49
3.63%
74
2.8
$ 200,000
to
$ 299,999
86
20.82%
168
12.44%
86
5.9
$ 300,000
to
$ 399,999
72
17.43%
161
11.92%
86
6.7
$ 400,000
to
$ 499,999
48
11.62%
176
13.03%
114
11
$ 500,000
to
$ 599,999
31
7.51%
178
13.18%
170
17.3
$ 600,000
to
$ 699,999
30
7.26%
167
12.36%
154
16.7
$ 700,000
to
$ 799,999
27
6.54%
111
8.22%
117
12.3
$ 800,000
to
$ 899,999
20
4.84%
78
5.77%
97
11.7
$ 900,000
to
$ 999,999
10
2.42%
50
3.70%
156
15
$1,000,000
to
$ 1,249,999
11
2.66%
49
3.63%
123
13.4
$1,250,000
to
$ 1,499,999
8
1.94%
52
3.85%
140
19.5
$1,500,000
to
$ 1,749,999
3
0.73%
31
2.29%
79
31
$1,750,000
to
$ 1,999,999
4
0.97%
28
2.07%
106
21.1
$2,000,000
to
$ 2,999,999
3
0.73%
24
1.78%
27
24
$3,000,000
to
$ 3,999,999
0
0.00%
13
0.96%
0
$4,000,000
to
$10,000,000
0
0.00%
5
0.37%
0
413
100.00%
1351
100.00%
107
9.8
This chart provides you with a number of ways to analyze our sales:
The most important number, however, is the months of supply on hand or the “absorption rate”. The months of supply on hand is simply a way to determine, if no new listings were to come on the market and we continued to sell at this current rate per month then how many months would it take to sell out of homes. Economists say that a healthy, balanced market should have between 6 to 8 months of supply on hand. Therefore, any price range that falls short of these numbers would be very active, lacking in enough listings and basically a sellers market. On the other hand, any price range that has more than 8 months of supply is probably overstocked with listings for the number of sales and therefore it becomes a buyers market. It truly is as simple as supply and demand.
I have highlighed in Yellow the price ranges that are understocked and therefore a Sellers Market and the Green price ranges are overstocked and therefore a Buyers Market
Again, the bottom line is that the overall Lake Norman real estate market has slowed down versus 2006 and inventory is up which would indicate that as a whole, we are in a Buyers Market. However, the lower price ranges are actually very active and there is a lack of inventory. If you are a buyer, then take note of the price range you are considering to learn what kind of bargaining power you might have. And, if you are a seller, note that the listings that did sell might have sold very quickly. The key for all sellers right now is to price your home realistically AND stage it so that it is perfect for the few buyers that are looking in your price range.
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