Lake Norman’s August 2012 residential real estate sales number makes it 8 months in a row that we have exceeded all prior months’ sales since 2007. All 8 months of 2012 have been strong however our August sales were up against unusually strong August sales in 2011 yet we still exceeded last August’s robust numbers. Triple digit sales for four months in a row is certainly good news. Gone, for now at least, is the term “erratic” which I have been using regularly for several years when describing our Lake Norman real estate market. While we are beginning to see a typical seasonal slowdown, at this point it looks like our Lake Norman real estate market is over the hump and moving into sustained positive territory. As always a few more agents will be late in recording their sales so when all the numbers are for August we should have recorded at least 113.
Let’s take a closer look at the numbers to glean some insight into the short term future and exactly where the Lake Norman housing market stands right now.
Here are the August 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
* Note that the Charlotte Regional Multiple Listing Service has created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replace the Contingent, Conditional and Pending categories. Contingent Sales are now joined with Conditional sales in my reports.
Some significant additional interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised only 14.5% of our sales which is a record low since our MLS has been keeping these records. The price range of these distressed sales was $19,697 – $650,000. The average price for distressed sales was $328,839. Righ now our distressed sales are primarily in our lowest price ranges. Our percentage of distressed active listings remains low at 6.7%. Clearly we are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
- 38% of our closed sales were waterfront homes which was a slight increase from last month.
- 49% of Lake Norman’s August home sales were under $400,000 compared to 50% last month.
- 66% of our August home sales were under $500,000 compared to 60% in July, 72 % in June, 70% in May, 49% in April, 61% in March sales. While our lowest price ranges are continuing to dominate our market, we saw some improvement in a few higher price ranges in August. (See more below).
- With the exception of closed sales which were 13% higher, our average prices were down all the way across the board but just barely. (See chart above). This serves as further support that Lake Norman’s housing market is on the mend and prices are stabilizing if not going up slightly.
- Another very positive sign was that our average days homes are on market before selling were down in every category. Properties are definitely selling more quickly.
- As of today, the number of active listings for all of Lake Norman totaled 917 down from 966 last month and 13% lower than August 2011. There has been an almost percipitous drop in the last few weeks which indicates very few listings are coming on the market for fall. To put this number in even greater context, back in June of 2008 we had 1789 active listings!
A closer look:
- The number of Active Listings in Lake Norman dropped 5% from last month’s and are 13% lower than August 2011. Our absorption rate/months of supply of active listings stands at 8.3. Our shrinking inventory and rising sales have brought us so close to a balanced 6-8 months of supply in Lake Norman area (MLS area 13). But, with a seasonal slowdown of the number of monthly sales in the months ahead I expect this number to trend upward in the fall. That said, to be this low for four months in a row is an incredible achievement for our Lake Norman housing market which at one time had 52.5 months of inventory!
- Conditional Sales, which are now called Under Contract Show, increased for the eighth month in a row, this time by 26% compared to last year. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late September/October. Based upon these numbers our closed sales this month will be slightly lower than last month’s but should be the best September since 2007.
- Pending/Under Contract No Show sales were 5% higher than August 2011’s. These are the contracts that are past inspections and are just waiting to close and are usually the best indication of closed sales in the next few weeks. Given that we had only 78 closed sales last September I am confident that we will exceed September 2011’s sales and make it 9 months in a row!
- The number of closed home sales in Lake Norman in August 2012 were only 3% higher than August 2011’s but again,last August’s numbers were an anamoly compared to all of 2011.
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- September 6, 2012: 206 (seasonal slow down yet still 12.5% higher than last August’s)
- August 6, 2012: 228
- July 6, 2012: 234
- June 6, 2012: 235
- May 7, 2012: 246
- April 1, 2012: 227
- March 1, 2012: 178
- February 1, 2012: 155
- January 1: 134 (the lowest ALL year)
- December 1: 147
- November: 169
- October: 193
- September: 183
We have clearly experienced a marked increase in sales so far in 2012 after a lag at the end of 2011. This uptick in sales coupled with our low inventory, shorter days on market and stabilizing average prices bode well for the overall health of the Lake Norman housing market.
Here is a breakdown by price-range of our June 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $22,5,000 – $199,999: 15
- $200,000 – $299,999: 13
- $300,000 – $399,999: 26
(These price ranges represented 49% of August’s sales. The lowest price ranges decreased but we saw a jump in the $300,000’s)
- 400,000 – $499,999: 19
- $500,000 – $599,999: 11
(These price ranges represented 27.% of our sales)
- $600,000 – $699,999: 4
- $700,000 – $799,999: 6
- $800,000 – $899,999: 3
- 900,000 – $999,999: 5 (compared to zero last month!)
(Solds for $600,000 – $1mill = 16. % )
- $1,000,000 – $1,999,999: 6 (all were under $1.5 million)
- $2 million+ : 2
(Solds $1million+ = 7% compared to 5.4% last month)
The most improved price ranges were the $300,000?s and the $900,000?s. The high end/ luxury homes continues to struggle.
8-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers are for single family homes. They 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, 2010 and the totals in the prior calendar years. The columns may not add up but I do my best with what I have to work! I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Summary and My Insight
The Positives and the Negatives:
- Lake Norman is seeing consistent improvement in closed sales as well as a stabilizing of average prices and properties are on the market for a shorter period of time.
- Lake Norman home sales year-to-date are up 20.7% over 2011!!!
- Lake Norman’s inventory of homes for sale remains low and is declining after peaking this year in June.
- The number of properties currently under contract indicates that our Lake Norman housing market will sustain our good closed sales numbers for the next several months.
- The number of distressed homes for sale are actually dropping so represent an even smaller percentage of our total inventory and sales.
- There are a lot of home buyers out looking around all of the Lake Norman area. Properly priced listings in very good condition are selling more quickly and sometimes with multiple offers.
- We are seeing more and more new construction popping up (Not spec homes).
- Interest rates have increased slightly but remain historically extremely low.
- Because of higher rental prices, it is now better for many folks to buy rather than rent.
- Positive national housing news this month was pervasive. Almost every economist and pundit have now declared that the national housing market is improving and even seeing small price increases. The S&P/Case-Shiller national price index climbed 6.9% for the second quarter of 2012 prompting their spokesman, David Blitzer to say “We seem to be witnessing exactly what we needed for a sustained recovery; monthly increased coupled with positive annual rates of change…” The Wall Street Journal’s article on 8/1 was titled: “Finally, It is Time to Buy a Home. Nationally there is a 6 month supply of homes for sale which is excellent. Also, the National Association of Realtors has created a new metric for Median Days on the Market which showed that nationally the average home is on the market for only 69 days before selling. Lake Norman’s housing market isn’t quite there yet but we are moving closer every day!
- Sales prices, while improving, remain low (in the US we are down to mid 2002 price levels).
- Our mid to higher-end property sales are still weak.
- With a shrinking inventory of active listings, buyers have fewer options.
- Home loans, especially construction loans, are still a very challenging process, particularly underwriting and appraisals. I had two really difficult closings this month out of 4 which were delayed due to the lender.
- Global economic turmoil and US economic uncertainty.
I am more convinced than ever that our Lake Norman housing market has hit its bottom in terms of annual sales volume. We are even seeing a stabilization of our prices and a decrease in the amount of time it takes for the average Lake Norman home to sell.
The gossip among Realtors is how dramatically our activity has increased. Despite low inventories, the number of buyers out actively looking has increased substantially. Real estate firms are touting their sales increases and talk as if we are going to sustain these strong numbers. I am a bit more cautious. While the worst is most likely behind us, we have a long way to go and most expect that it will be a very slow recovery.
My advice to Lake Norman home buyers remains this: Look for homes that are in good locations and have most of the priorities on your list. While your perfect home might come along, don’t wait too long and don’t dismiss a property if it isn’t perfect. Prioritize: Location, quality and depth of water (if waterfront buyer) and floorplan. Then, to determine a realistic price, use VERY RECENT comparable sales in your specific market niche. The selection may not be great but with interest rates near all time lows and prices low it is a good time to buy. With only 6%of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale to come along at an unrealistic price. If you insist on low-balling, at least have some comparable sales to justify your number. Don’t focus as much on the price as on the future marketability of the property. A bargain that has incurable issues that will make it difficult to resale, really isn’t a bargain at all. Be smart!
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