Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s April 2018 Market Report

We are now in our most active months for our Lake Norman area’s housing sales. After a dip in January, a jump up in February and a drop in March, our April Lake Norman real estate market followed this roller coaster pattern by posting a 5% gain over April 2017’s sales. And, we posted a 19.2% increase over last month’s home sales. So will this pattern continue?  Hopefully this month’s market report will provide us some insight as to what lies ahead.

Here are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • April’s closed home sales were the highest April since 2005 even beating out last year’s 154. And, they are 19.2% higher than last month as well.
  • Our inventory of active listings remains alarmingly low and is not increasing as it should at this time of year; currently 11% below last year’s which were also historically low.  It is hard to quantify but there is no doubt that low inventory does have a negative impact on Lake Norman’s home sales.
  • We may continue to experience an up one month and down the next for at least the short term given our lower Pending numbers.
  • With 7 sales over $2 million we just might be experiencing a true return of our luxury housing market!

Let’s take a closer look:

Lake Norman April 2018 Home Sales Analysis

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • Waterfront homes returned to more balanced market in April dropping back down to a 6.3 months of supply from March’s 9.7 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in April represented 28.6% of Lake Norman’s total sales (Up from 21.6% last month and 22.3%  in February but down from 31.6% in January) while comprising 35.8% of our active listings and 26% of our under contract listings.
    • The average price per square foot of our waterfront homes increased to $252.18 which is an improvement over the last two months however below January’s $271.81, and December’s $253.94.   
    • It took on average 107 days for a waterfront home to sell and they sold for 97% of their listing price.
    • Overall, these numbers, while not stellar, they are showing some movement in a positive direction regarding sales price as a percent to the listing price and shorter days on the market. That said, their small percentage of our total Lake Norman sales vs the percent of our total inventory is very concerning.  Don’t be fooled however. There are HOT waterfront properties.  I sold one this past month over asking that had 5 offers in the first week but it was a great lot for a great price.
  • 31 new construction homes closed in April through our MLS but this does not reflect a totally accurate picture of new home sales since so many are custom or are purchased directly from the builders and therefore never enter the MLS. The average listing price vs sales price of new construction single family homes was 100% so they are selling for their asking prices! Clearly, buyers are willing to pay a premium for a new home. (That said, don’t forget to ask builders for all those great upgrades!) We currently have 112 new construction homes under contract in the MLS. The average sales price in April logged in at $426,080.  The months of supply of active listings based on April’s sales is 7.1 which oddly puts them in a buyer’s market over all.
  •  There were NO closed distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman for the past two months!  We have 7 under contract and only 1 distressed active listing as of today. One interesting note: the average price of distressed properties is $591,363 so these properties are not in our lower price ranges. Clearly, distressed sales continue to play an insignificant role in our Lake Norman real estate market. 
  • 47.83% of Lake Norman’s April single family home sales were under $400,000.
  • 61.4% of Lake Norman home sales in April were under $500,000.
  • One definite signs of improvement is the fact that our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 389 is almost equal to last May’s 391. (See below). We are up against 2017’s record-breaking sales and it looks like we may be on pace to at least get close.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down significant 11% compared to last year’s at this time.  Instead of seeing our season increases, our active listings today are actually lower than last month’s which is REALLY unusual. At this time of year we should see more new listings. As has been the case for over a year, buyers in hot price ranges and locations should act quickly when an especially good property hits the MLS.  Today we have only 805 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings is 5. Technically this means we are overall in a seller’s marketKeep in mind, however, within specific price ranges there are dramatic swings from a buyer’s market to a balanced to a seller’s market.  The average price is 2% lower than last year’s.
  • Under Contract Show (conditional) sales are 9% higher than this time last year. The average price of our new contracts is up 6% and the days on market is down 10%.  This indicates that slightly more higher priced homes are under contract and that they are selling more quickly which is good news. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent relatively modest future closed sales in June/July.
  • Pending/Under Contract No Show sales are down a whopping 22% for the third straight month.  The average price of our pending sales is up 7% and these listings have been on the market 3% longer than last year’s. These numbers indicate that in the next month or so we may struggle to match last year’s record-breaking pace.  Pending sales are contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales this month or early June.
  • Lake Norman’s closed April home sales in our MLS as of today and as stated above, were 5% higher than last April’s. It is not time to celebrate but it does look like we will keep pace with 2017 for the next few months with another possible dip this month. 161 closed sales makes April the best April since 2005 in terms of the number of sales of single family homes. The average price was up an impressive 27% and it took on average 6 fewer days to sell a home in April 2018 vs 2017.

The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:

  • May 8, 2018: 389
  • April 8, 2018: 334
  • March 8, 2018: 280
  • February 8, 2018: 244
  • January 8, 2018: 206
  • December 8, 2017: 264
  • November 6, 2017: 282
  • October 6, 2017: 301
  • September 6, 2017: 346
  • August 6, 2017: 364
  • July 6 2017: 350
  • June 6, 2017: 370
  • May 6, 2017: 391
  • April 6, 2017: 351
  • March 6, 2017: 295
  • February 6, 2017: 227
  • January 6, 2017: 183
  • December 6, 2016: 237
  • November 6, 2016: 275
  • October 6, 2016: 274
  • September 6, 2016: 288
  • August 6, 2016: 325
  • July 6. 2016: 313
  • June 6, 2016 344
  • May 6, 2016: 340

Here is a breakdown by price-range of our April 2018 closed sales in all of Lake Norman

  • $1,000 – $99,999: 0
  • $100,000 – $199,999: 12
  • $200,000 – $299,999: 29+
  • $300,000 – $399,999: 36-

        (These price ranges represented 47.8% of our April home sales compared to 57.4% last month)

  • $400,000 – $499,999:  22
  • $500,000 – $599,999: 10

       (These price ranges represented 19.9% of our April sales compared to 22.3% last month)

  • $600,000 – $699,999: 16++
  • $700,000 – $799,999: 3-
  • $800,000 – $899,999: 13++
  • 900,000 – $999,999: 2

       (These price ranges represented 21.1% of our April sales compared to 12.7% of our March sales, 14.3% of February sales, 20.4% of our January sales, 14,5% of December’s sales, November’s 22.1%, October’s 13.2%, September’s 23.7% and August’s 24.4%)

  • $1,000,000 – $1,499,999: 5
  • $1,500,000 – $1,999,999: 6
  • $2 million+ : 7++

       (#Solds $1 million+ = 11.2% of our April sales, 7.4% of our March sales, 8.9% of February sales, 7.1% of January’s sales, 6% of December’s sales, 7.86% in November, 7.8 % in October, 9.3% in September, 6.3% of August’s sales,10.6% of July’s and 6.2% in June)

In my opinion, this price range breakdown is one of the most important resources in my market reports because it truly highlights our specific strengths and weaknesses each month. In April our stand out price ranges were the $200,000’s, $600,000’s, $800,000’s, and $2 million plus. It is interesting to look at how each group of prices did compared to last month. The most significant drop was in the $300,000’s and $700,000’s. While the majority of Lake Norman’s sales (67.7%) were still under $600,000 they did drop down from 79.7%.  As I have said so many times, with our Lake Norman real estate market you really need to know specifics about your price niche because there is such disparity within price range sales.

Higher-end home sales in Lake Norman

Properties above $1 million certainly improved  in April.  at 11.2% that is the highest percentage in the past year at least. Like the trade-up price ranges, sales over $1 million fluctuate from month to month.  But 7 sales over $2 million is the highest I have seen since the recession.  This certainly looks like a recovering luxury housing market. It will be interesting to watch this niche over the summer.

Lake Norman’s Waterfront Homes

As I wrote above, waterfront homes returned to more balanced market in April dropping back down to a 6.3 months of supply from March’s 9.7 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in April represented 28.6% of Lake Norman’s total sales (Up from 21.6% last month and 22.3%  in February but down from 31.6% in January) while comprising 35.8% of our active listings and 26% of our under contract listings.
  • The average price per square foot of our waterfront homes increased to $252.18 which is an improvement over the last two months however below January’s $271.81, and December’s $253.94.   
  • It took on average 107 days for a waterfront home to sell and they sold for 97% of their listing price.
  • Overall, these numbers, while not stellar, they are showing some movement in a positive direction regarding sales price as a percent to the listing price and shorter days on the market. That said, their small percentage of our total Lake Norman sales vs the percent of our total inventory is very concerning.  Don’t be fooled however. There are HOT waterfront properties.  I sold one this past month over asking that had 5 offers in the first week but it was a great lot for a great price.

Annual Sales by Month

Lake Norman real estate home sales by month and year

* Please note that all of my numbers are for single family homes in what used to be referred to as “Area 13 – Lake Norman. They come from the Carolina Multiple Listing Service and will not include sales that took place outside of our MLS.** I adjust past months when I do the monthly update as a few more sales are usually input late by agents. ***Our MLS just merged with two other’s so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that this year’s numbers will be comparing apples to apples. However, I am not going to go back to prior years and adjust.

What a fascinating look at our highs and lows, especially now that we are 4 months in to 2018.  Our combined total of 507 is 2.9% lower than the first four months of 2017 but higher than all other months back to the beginning of the recession. Take a look at the huge numbers we are up again in the rest of 2017.  This is going to be a tough year!

Summary and My Insight

Good signs/news for 2018:

  • With four months in the books we are actually doing better than most prior years with the exception of last year.
  • The number of distressed homes for sale remain so low that they are truly irrelevant and did not play any perceptible role in our Lake Norman housing market.
  • Sellers in lower price ranges are making money!  I just had another listing sell within the first few days with multiple offers. As with last year’s sales, I need to emphasize that in every case my sellers have been willing to spend the necessary money staging their homes including, refinishing or new hardwood floors in main living areas, fresh paint in the popular grays and white, new carpet and spruced up landscaping and curb appeal.  One huge continuing success is painting wood kitchen cabinets white. When combined with the fresh gray walls and staging they look like model homes!
  • Multiple offers do exist in our waterfront properties.  I was involved in one and I know of at least one other in the past month.
  • New construction is definitely back in a consistent way. Custom and smaller groups of spec homes are popping up all over Lake Norman. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor.
  • New listings in the lower price ranges that are in good condition and in desirable locations are selling with multiple offers within days of hitting the MLS.
  • Move-in condition, updated listings in the trade-up price ranges and homes on exceptional waterfront lots are selling quickly.
  • Fannie Mae & Freddie Mac  has increased their Conventional Loan Limit to $453,100 from the current $424,100!

Challenges/Weaknesses for 2018:

  • Mortgage interest rates are higher and and there are concerns about the future pace of these increases and potential inflation based on announcements by the Federal Reserve.
  • Supply and demand are mismatched. Inventory levels are still very low and not increasing as they usually do by this time of year. This shortage does negatively impact sales and will continue to do so if they don’t increase substantially as is typical in the spring/early summer.
  • The new tax bill according to a recent NY Times article is “Messy” and is predicted to negatively impact our country’s housing market. “Overall Moody’s Analytics estimates that the tax law will reduce home transaction prices by 4%, a number that reflects both the direct impact of tax changes and higher interest rates caused by larger deficits.”
  • The big picture: “Even as the housing market is chugging forward, hamstrung by low inventory…NAR thinks 2018 will be challenging. The group revised its 2018 forecast to show that sales will be flat compared to 2017.”
  • Locally, our waterfront homes posted weak numbers again this month which has given me reason to feel uncertain about where they are headed.
  • Our trade-up and luxury home sales continue to be erratic unlike the lower price ranges.
  • Existing home sales are being challenged by new construction.  In head to head competitions new construction usually wins which hurts resale homes in the same or similar communities except in lower price ranges where there simply isn’t enough inventory.  Much of our housing inventory is becoming more and more dated so it will be incumbent upon sellers to do more significant updating and staging to compete with new homes.  Of course, the alternative is to drop their sales price but most buyers are not willing to buy a home here that needs a lot of work.
  • Finding the perfect home can be challenging. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling very quickly. Watching the “hot sheet” is now a necessary part of the buying process for some price ranges and locations.  Don’t procrastinate when considering a really good new listing because they are selling quickly!
  • No matter how hard I try to provide you with the most accurate and insightful data, it is critical to know your own niche because there are so many variables in the Lake Norman housing market. Don’t assume all price ranges and locations are equal. You might be facing multiple offers and/or picked over inventory or you might not.  I will be writing my 1st quarter 2018 price range analysis in a few weeks.  In the meantime, See my price range analysis for the 1st quarter of 2018.   

Final thoughts: 

As I wrote the past two months:

My family moved to Lake Norman from California in 2005 seeking a better quality of life and a lower cost of living.  I have watched our area grow immensely over the past 12+ years. There is no doubt that Lake Norman is still a very appealing destination for folks from all over the country. We now can compete with many trendy cities throughout the country with our amazing number of new restaurants, breweries and entertainment.  But, with this growth has come increased traffic which is now just a fact of life on I-77. With the passing of time, our pre-recession “new” homes are now a bit dated and will be needing new HVAC sysems, water heaters and roofs. With a complete halt to new construction during the recession years we are now lacking the number and type of homes that appeal to many of today’s buyers.  For this reason new construction and remodeled homes are selling more quickly than ever.  It is more of a challenge for our “dated” homes and subdivisions where open floor plans are rare and kitchens and bathrooms are in less appealing woods and materials.  The result has been the need for sellers to do updating before listing and buyers, especially waterfront, need to be more willing to do remodeling after they purchase IF they feel they got a good “deal”. Today, the bottom line comes down to price, location, condition, updates and proximity to desired amenities.

Buyers today in the lower price ranges should be prepared to act fast when a new listing that has been updated comes on the market. Or, if you want a more affordable option in any price range, be prepared to be more flexible.  This means a willingness to do your own updating if you can’t afford an updated home, and, if possible, be more flexible about locations based upon our limited inventory.  At the same time, if you really love the home, be aggressive! My Mantra as always: Don’t focus just on the price but also on the future marketability of the property. A bargain that has incurable issues that will make it difficult to sell in the future really isn’t a bargain at all. Be smart!  

Sellers should watch a lot of HGTV and, if possible, be prepared to do painting, new flooring, painting kitchen cabinets white when feasible and staging to attract buyers.  As I wrote above, I just listed and sold another home with multiple offers which can be completely attributed it to the renovations and staging.  How do I know this?  The seller had it listed last year is it’s dated condition with no staging and it sat on the market.  We are under contract about $20,000 above where they were before! Also, remember that buyers can be reluctant to buy a home knowing they will need to replace a roof, the AC and heating etc. in the first few years they are living there so, if possible, put on that new roof, replace the HVAC units while you are updating.  ALWAYS offer home warranty plans to buyers!

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