If you have been following the national real estate news about pending sales being on an upward trend as well as closed home sales in some states, you might have an overall sense that we have hit bottom and are slowly but consistently improving. But, we need to keep in mind that we always have a seasonal increase in sales monthly from April through July. Locally our August numbers took a significant dip. It will be very interesting to see the national housing numbers for August when they are released.
I have been working with a lot of Lake Norman buyers and I can tell you from first hand experience that most sellers in the Lake Norman area are struggling, prices are dropping and there are some really good bargains in every price level. It truly is a painful market right now and a challenging one for both buyers and sellers due to the difficulties with appraisals and loans and the drop in prices.
Lake Norman’s August housing statistics
- Active Listings continue to decline which is very good news. Note the average price of our active listings when compared to those that are under contract.
- Contingent Sales also remain about flat for the past few months. These are the homes that are sold but they are contingent upon the buyer selling their home…very weak contracts that could go on indefinitely
- Conditional Sales are actually slightly above the 48 in July.
- Pending Sales are equal to July’s 90 pending sales which indicates to me that our September numbers may mirror August’s.
- The number of Closed Sales dropped 18% compared to July 2008. The average sales price declined 14% and the average days on market increased 30%. In my opinion, these are critical numbers as they best tell the story of our Lake Norman housing market. My guess is that our sales peaked last month (July) for 2009 and will now level off.
5-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 the totals in the prior calendar year.
***IMPORTANT CHANGE IN DATA
While preparing this report I decided to look at the details of the properties that sold in July and August. I discovered a major flaw in the MLS data program:
- The normal MLS search for properties that have sold by date actually include the properties based upon when the listing agent entered the sold data into the MLS, NOT when the property actually sold!
- I went back and discovered that there are a significant number of home sales that are entered several days or more into the next month so the monthly sales numbers are inaccurate.
- I spoke to the data person at the Charlotte MLS and he said this is the way that the entire MLS reporting is done but that if I want to know the number of ACTUAL sales in any give month I must do a custom search (which I have since done). So, be forwarned that the public numbers quoted for Charlotte but our MLS will use the flawed method. I do not know how the national numbers are calculated.
I have since gone back and corrected every month in 2009 to reflect the actual sales that closed in that month.
To give you an example of how bad those prior numbers were, in today’s report our August sales would be 79 rather than 62. There are 22 sales in the August 2009 search that actually closed in July and 5 sales that are included in September when they actually closed in August for a net error of 17!
Clearly our Lake Norman home sales peaked last year in the month of July and I would predict that they also peaked this year in July. August sales dropped 31% versus last month. Right now, with 62 sales and 1498 active listing we have 24 months of inventory of Lake Norman homes compared to a balanced market of 6-8 months of supply. The average sales price declined 14% compared to August 2008.
Inventory is coming down as are prices so the Lake Norman housing market is moving in the right direction to hit bottom. We must get our inventory down which means getting our prices down to a point where buyers feel confident to buy.
We are still clearly in a buyers’ market. I think the advantage will be with buyers through the end of the year but then we may see a shift in the mindset of both buyers and sellers as we enter spring 2010. If the momentum changes, buyers will start to buy fearing they are missing the bottom and they may be right!