Well, yes and no, is the honest answer. Yes, Lake Norman’s August closed home sales did exceed last August’s by 8% making it the 8th month in a row where we beat 2014 closed sales. And, our pending sales are slightly better than last year. However, our number of newly under contract homes fell 3% below last year’s which is the first indication that there may be a slowdown in Lake Norman’s horizon. So, while sales were up, they were not up by as much as prior months which may indicate that the impressive momentum we have enjoyed since January is beginning to slow. That said, our year-to-date 2015 closed single family home sales are 15.8% higher than 2014’s. For the first time since the recession, Lake Norman’s housing market has been consistently strong every month in 2015. But will it continue? Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 4.6 % of Lake Norman’s total August home sales. We had just 7 distressed sales with an average price of $195,051. (The highest closed sale price was $379,600). Distressed active listings currently comprise only 1.6% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes represented only 20% of our August home sales while they currently comprise 41.2% of our active listings. Yikes! The average sales price of a waterfront home in August was $775,058 compared to $930,519 last month. And, the average price per square foot was $245.58. It took on average 125 days for a waterfront home to sell and they sold for 95% of the listing price. We currently have 86 waterfront homes under contract. Our waterfront homes’ months of inventory jumped up from 8.9 in July to 12.2 in August. August was truly a poor showing overall for our waterfront homes.
- 32 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 98%. Clearly there isn’t a lot of wiggle room on prices of new homes! We currently have 64 new construction homes under contract in the MLS. The average sales price in August logged in at $366,239. The months of supply is slightly in a sellers’ market at 5.5. The bulk of our new construction market in the MLS is still in our lower price ranges.
- 55.5% of Lake Norman’s August single family home sales were under $400,000 which was slightly higher than last month’s.
- A whopping 72.5% of Lake Norman home sales in August were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 268 is lower than last months’ and last year’s but higher than 2013’s. Our new contracts indicate our Lake Norman housing market may be slowing. Whether this is a serious downward trend or just a blip on the radar screen remains to be seen.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is a substantial 11% lower than last year’s. Our absorption rate/months of supply of active listings inched up to 6 which puts Lake Norman back in to a balanced housing market overall favoring neither buyers nor sellers. Within specific price ranges, however, there are swings from a buyer’s market to balanced to a seller’s market.
- Under Contract Show (conditional sales), are down 3% versus this 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 this month’s closed sales may dip in October compared to last year’s. So far in 2015 our Lake Norman’s housing market has performed at it’s most consistently strong pace since the recession despite the lack of a good number of fresh new listings. However, there are seeds of doubt as to whether this will continue in the 4th quarter.
- Pending/Under Contract No Show sales are up just 2%. These listings went under contract on average in only 84 days. These are the contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. We are up against 140 closed sales in last September and our pending numbers seem to indicate we just might match those numbers. We’ll see!
- Lake Norman’s closed home sales in as of today and as stated above, were 8% higher than last year’s. (Don’t forget that this number will go up a bit as slower agents log in their sales.) So, while good, there are some reasons for concern not the least of which is the average sales price which was down a significant 19% when compared to last August’s. What happened to our middle to high-end homes this past month? We will see below.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- September 7, 2015: 268
- August 6,2015: 286
- July 6, 2015 287
- June 6, 2015: 304
- May 6, 2015: 313
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- 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
Here is a breakdown by price-range of our August 2015 closed sales in Lake Norman
- $39,440 – $99,999: 6++
- $100,000 – $199,999: 11
- $200,000 – $299,999: 30
- $300,000 – $399,999 38+
(These price ranges represented 55.6% of our August home sales which is up from last month’s.)
- $400,000 – $499,999: 26+
- $500,000 – $599,999: 12+
(These price ranges represented 24.8% which is higher than last month’s )
- $600,000 – $699,999: 9-
- $700,000 – $799,999: 5-
- $800,000 – $899,999: 4-
- 900,000 – $999,999: 2-
(These price ranges represented 13% compared to 21.0% last month!)
- $1,000,000 – $1,499,999: 8-
- $1,500,000 – $1,999,999: 1-
- $2 million+ : 1-
(#Solds $1 million+ = 6.6 compared to last month’s 9.0%)
The stand out price ranges in August in all of Lake Norman were the under $100,000, $300,000’s, $400,000’s, and the $500,000’s.
Higher-end home sales in Lake Norman
Okay, I already used the term “Yikes” so what if I just say “UGH”! After a really promising July, our sales in both the trade-up price ranges of $700,000-900,000 and the $1 million+ luxury market went into hiding when it came time to close this past month. Looking to the future, of the 268 currently under contract 32 or 11.9% are in our trade-up price ranges and 23 or 5.5% are over $1 million. Not significant improvements in the short term.
Lake Norman’s Waterfront Housing Market
As goes our trade-up and luxury market so goes our waterfront housing market for the most part. This past month was one of weakest in memory for total waterfront sales. As of today we have 86 waterfront properties under contract up one from 74 last month. Despite the weak numbers, I have been showing waterfronts in all price ranges and I am noticing quite a bit of activity especially on new listings. While the inventory looks high by the numbers, the selection of good waterfront homes in affordable price ranges are low. We currently have 378 waterfront homes actively listed for sale on Lake Norman. With only 31 closed sales of waterfront homes in August this means Lake Norman currently has 12.2 months of inventory of waterfront homes for sale so this niche is very much in a buyer’s market overall but within certain price ranges and with new listings it is getting quite heated.
In the meantime, new construction on the water is everywhere. Folks are gobbling up waterfront tear-downs and now even considering older homes that need renovations. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of what is available as prices are going up.
11-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 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. ***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.
I love this chart of our sales by month since 2005 as it really gives us a good sense of where we are today and where we have been over the past 11 years. With 8 months now under our belts in 2015 our sales have exceeded all post recession years and are only 1% off of the 2007 numbers. We are out performing 2014 handily so it will be very interesting to watch as 2015 continues after such a strong first 8 months. As the numbers above indicate, there is no doubt that we are in for a slight slowdown but for how long and how low remains to be seen. We are up against last year’s strong 4th quarter numbers and at this point it looks like we may slip below them.
Summary and My Insight
Good signs/news remains the same as last month:
- Lake Norman’s inventory of active listings remains low with only 6.0 months of supply. However, to put this in context, the greater Charlotte area only has a 3.9-month inventory.
- 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.
- New construction is definitely back. 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.
- Waterfront tear-downs and lots are selling. More buyers are willing to build or do major renovations if they can get “good” waterfront lots.
- New listings that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Interest rates dipped a bit recently
- Jumbo loan interest rates are still LOWER than conforming loan’s.
- I have personally experienced a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman since the early January.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 now than in the past 5 years.
Challenges/Weaknesses also the same as last month:
- Everyone is waiting to see what the Feds do in September. If they increase their interest rates mortgages will follow.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman, particularly in the higher price ranges.
- Our “trade-up” market is has lost momentum and our Lake Norman’s luxury home sales are still struggling.
- Lake Norman home prices are increasing in a rather inconsistent pattern and in different locations and price ranges. At the same time, according to economists, home prices in the entire US are expected to rise about 5%.
- 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.
- While easing a bit, strict loan standards are still making it more difficult of buyers to qualify despite some easing and modifications.
- 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 very quickly. Watching the “hot sheet” is once again a part of the buying process. Don’t procrastinate when considering a new listing because they are selling quickly!
- 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.
Final thoughts: Officially we are now past the strongest selling season for Lake Norman homes. However, if you look at the green and yellow chart above you will see that historically we can also see really solid sales numbers in the fall. Last month a felt pretty optimistic but with the drop in new contracts I know wonder if we can sustain our strong sales through the end of 2015. With bargains gone and sales up now is the time to act VERY quickly when you find a home that suits you. I have out-of-state buyers who have their “favorites” list planned for their visits only to see a good number of them going under contract before they have a chance to see them. If you are looking in a “HOT” neighborhood and price range be prepared to make an offer quickly. Have your pre-approval letter in hand before even looking at homes.. These are new times so make sure you know what is happening right now in your market niche! 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 3% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.If you read my post: Really Cool Real Life Examples of Home Values Trends in Lake Norman you will know that a lot of our new listings are selling VERY quickly and at higher prices. I feel that we have two different markets right now in Lake Norman. There are new listings that are priced right that are selling in just a matter of days and then there are the older listings and high-end luxury estates that are still struggling.
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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