Not only were our Lake Norman’s home sales for August 2014 higher than last August’s, but our number of properties currently “under contract” are substantially higher than last year’s. Clearly, our activity has not really softened as it usually does in late summer. To me this indicates that our Lake Norman housing market is now more stable than it has been since the recession and is sitting on a stronger foundation. Let’s take a closer look at the August 2014 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area real estate market:
* All data is from the Charlotte Regional Multiple Listing Service. **Please note that the MLS started using an entirely new program in March which did away with Area 13 so my numbers may vary slightly from the past but I have made it as close as possible.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REOS), defaults, Short Sales) represented only 5.1% of Lake Norman’s total home sales. We only had 7 distressed home sales in August. The average price for distressed single family home sales was $104,143. Distressed active listings comprise only 2.3% of our total inventory of Lake Norman homes sale. Clearly distressed sales no longer play a significant role in our Lake Norman real estate market and this is very good news!
- 29.9% of our August home sales were waterfront homes which is lower than our typical month. (Waterfront homes represent 40% of our active listings). The average sales price of a Lake Norman waterfront home in August was $1,040,305. Our average price per square foot was $233.48 compared to $210.68 last month and our peak of $229 last summer. Our luxury home sales were impressive and account for theses numbers. Overall, however, waterfront homes just aren’t selling at the rates they were in past years. We have a 10.16 month supply of active listings so overall waterfront homes are in a buyer’s market.
- 19 new construction homes closed in August through our MLS but this does not reflect an accurate picture of new home sales since so many are custom or are purchased directly from the builders and therefore never enter the MLS. (In fact, this segment of the market may be skewing our Lake Norman home sales numbers quite a bit). The average listing price vs sales price of new construction single family homes was 100%. Clearly there isn’t a lot if ANY wiggle room on prices of new homes. We currently have 58 new construction homes under contract in the MLS. The average sales price in August logged in at $357,665. Our new construction market is primarily in our lower price ranges.
- 51.8% of Lake Norman’s August single family home sales were under $400,000. This is about equal to last month’s.
- 62.7% of the entire Lake Norman home sales in August were under $500,000 which is also about equal to last month’s.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 272 are actually up from last month’s 261. At 272 we are almost as high as our peak May numbers!
A closer look at the chart:
- The number of Active Listings in Lake Norman is 4% higher than last August’s. Our absorption rate/months of supply of active listings today is 7.6 which is about equal to month’s. Last May 2013, Lake Norman hit our post recession low of 5.9 months of suppy. Using the nationally defined goal of 6-8 months of supply for a balanced housing market we can safely say that our Lake Norman real estate market is balanced over all for the third month in a row. I am pleased that they are down from last month’s 1088.
- Under Contract Show (conditional sales), were up a whopping 58% compared to this same time last year. These are homes that just went under contract (have an accepted offer) and still have financial and inspection conditions. They represent future closed sales most likely in late September/October. This number would indicate that our closed sales will remain strong well into fall and that Lake Norman, unlike the rest of the US, might exceed our 2013’s sales in 2014.
- Pending/Under Contract No Show sales are down again, this time by 14% making this the 12th month in a row of declines. Since moving a listing from Under Contract Show to Under Contract No Showings is totally at the discretion of the listing agent, it appears that agents are leaving properties in the Under Contract Show status longer so these numbers are higher and the pending/no show numbers are consistently lower. These are the contracts that are past their inspection/due diligent periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Based upon this I predict that we will most likely exceed 2013 closed sales numbers this month.
- Lake Norman’s closed home sales in as of today and as stated above, were up 5% compared to last year’s. The average sales price was 24% higher and the average days on market were down an impressive 24%. The average house in Lake Norman sold in about 84 days. All good news!
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- September 6, 2014: 272
- August 6, 2014: 261
- July 7, 2014: 268
- June 5, 2014: 262
- May 6, 2014: 274
- April 6, 2014: 243
- March 6, 2014: 187
- February 6, 2014: 185
- January 6, 2014: 155
- December 6, 2013: 197
- November 6, 2013: 207
- October 6, 2013: 207
- September 6, 2013: 218
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- January 6, 2013: 184
- December 6, 2012: 197
- November 7, 2012: 214
- October 8, 2012: 218
- September 6, 2012: 206
Here is a breakdown by price-range of our August 2014 closed sales in Lake Norman
- $36,000 – $99,999: 6
- $100,000 – $199,999: 11-
- $200,000 – $299,999: 23-
- $300,000 – $399,999 31-
(These price ranges represented 51.8% of our August home sales.)
- $400,000 – $499,999: 15
- $500,000 – $599,999: 11 –
(These price ranges represented 19.0% )
- $600,000 – $699,999: 10
- $700,000 – $799,999: 10
- $800,000 – $899,999: 3-
- 900,000 – $999,999: 3+
(These price ranges represented 18.9%)
- $1,000,000 – $1,499,999: 6
- $1,500,000 – $1,999,999: 3
- $2 million+ : 5++++
(#Solds $1 million+ = 10.2% which is the highest since July 2013! The increase was in the $2 million plus estate sales.
The most improved price range in August was our very highest, the over $2,000,000. It is great to see some real life in our luxury housing market. Just FYI, 4 of the 5 were in The Peninsula area and 1 was in The Point.
Higher-end home sales in Lake Norman
Mercurial and unpredictable comes to mind when trying to describe our luxury housing market. This month was such an improvement over the past years’. We even had two sales at or above $3,000,000. I want to see more consistency in this niche!
Lake Norman’s Waterfront Housing Market
This month 14 of our 41 waterfront sales were above $1 million. So, if we take these out of the equation our waterfront home sales in the trade-up price ranges were about the levels they have been this year. We currently have 415 waterfront homes actively listed for sale on Lake Norman. With 41 closed sales of waterfront homes in August this means Lake Norman currently has 10.1 months of inventory of waterfront homes for sale which puts this niche in a buyer’s market. I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman but I do think there are some signs of sustained improvement so hopefully we will keep this up. Folks are gobbling up waterfront tear-downs and if you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. New construction in every price range is beating existing homes in popularity.
10-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 adjust past months when I do the monthly update as a few more sales are usually input late by agents. ***With our new MLS Matix program there are some variances in numbers but I am not going to go back to prior years and adjust.
Thanks to our sustained higher sales all summer, Lake Norman’s year-to-date home sales are only 1.8% below 2013’s! The national sales are trending below 2013’s so it will be interesting to see their August numbers and whether they were as strong has Lake Norman’s.
Summary and My Insight
- August’s 137 closed sales actually matched August 2007’s! (I update our July sales and they also matched 2007’s). We are experiencing the best real estate market since the recession!
- Given the high numbers of newly under contract,sales the next few months should continue this positive trend well into fall.
- The average number of days Lake Norman properties took to sell was down 24%.
- Lake Norman’s inventory of active listings has started to drop. As our seasonal slow down approaches it is important that our number of active listings drop accordingly.
- Our Lake Norman home values are stable and slowly improving overall. There are pockets of strengths and relative weaknesses which result in fluctuating average sales prices when combined for the entire Lake Norman real estate market. This month our strong sales above $2,000,000 actually skewed our average sales price and price per square foot so I wouldn’t use this month’s numbers as an example of the entire Lake Norman real estate market going forward. In addition, the lack of distressed sales has led to higher overall average prices. The “bargains” are all but gone. What I really want to see is measurable increases in Lake Norman home sales in ALL price ranges.
- There are consistently pockets of “hot” home sales in the greater Lake Norman area, notably the off-water popular and moderately priced communities in Huntersville, Cornelius and to a lesser extent Mooresville where inventory is very low and multiple offers are not uncommon.
- The number of distressed homes for sale are so low they are truly irrelevant and will not play much of a role in our Lake Norman 2014 sales.
- Home values have increased enough overall that Zillow recently reported that less than 20% of all homeowners find themselves owing more on their mortgage than their homes are worth. They are projecting that number to drop to 14.9% by the second quarter of next year.
- New construction is definitely back. While we only sold 19 new homes last month through the MLS, we have 58 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. New housing communities as well as custom and smaller groups of spec homes are popping up all over Lake Norman. As I noted above, new construction homes are selling on average for 100% of their listing price.
- Charlotte’s 2013 impressive home price gains have been linked to a significant number of investors taking advantage of low prices in “middle class neighborhoods” and turning them into rentals. They therefore have “inflated” prices. Since Lake Norman didn’t enjoy this surge, our sales are more reflective of a truly stable and slowly improving real estate market based on owner-occupied rather than investors and we are already standing on our own.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Homeowners who went through short sales/foreclosures several years ago are now re-entering the market.
- Because sales and prices are up in many states that feed relocating buyers to our Lake Norman area, more homeowners are able to sell and move than in the past 5 years.
- According to a July 1 article on Trulia Pro Blog, of their “7 signs of a Soon-to-Be Super Hot Market”, Lake Norman definitely has 4 of them including the new Whole Foods Market opening in Huntersville! This was one of their key signs of positive economic futures!
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better this month, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices are stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- Interest rates are expected to continue to rise in 2014. Today a 30-year conforming is about 4.25%. and a jumbo is about 4.0%
- Tightened credit, tougher loan standards and increasing interest rates have made it harder for buyers this year.
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of homes for sale is “stale”, especially higher prices on the water. Even new listings are many times homes that were on the market off and on for several years. As has always been the case here in Lake Norman, most buyers want new or move-in condition homes. Since new construction pretty much disappeared after the recession, we are now looking at an aging inventory of homes which is why buyers are turning more towards building or remodeling than in past years
- Finding the perfect home has become more difficult because much of the older inventory has been picked over. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling quickly. Watching the “hot sheet” is once again a part of the buying process.
- On the flip side, higher-end properties are simply taking much longer to sell.
- 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.
My advice to Lake Norman home buyers has changed slightly. I still emphasize the importance of good locations and prioritizing your list of features you want in your home and lot. But, if you are looking in a “HOT” neighborhood and price range or if you can’t find your perfect, move-in condition home, be open minded about homes that need some work. If the floor-plan is good, perhaps having to do some painting, new flooring etc. is your best option. 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), lot and floor plan. 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 but rising it is still a great time to buy. With less than 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.)don’t expect a “bargain” to come along at an unrealistic price. Low-balling, except on over-priced properties, really isn’t a great strategy nor will it result in a lower price. To the contrary, it usually serves to offend the sellers and gets the negotiations off on the wrong foot.
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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