I usually introduce these market reports with basic numbers about the month. But today, instead, I want to share with you what I feel are the biggest takeaways:
- Lake Norman currently has 42 properties over $1 million under contract.
- Waterfront homes are, for the first time since the recession, in a sellers’ market.
- Our trade-up price ranges from $600,000-$999,999 represented almost 1/4 of our sales.
- Finally, at 1329 closed sales, our first 8 months were the highest first 8 months in Lake Norman’s history, exceeding 2005’s by 6.6%.
In a nutshell, these mean that our waterfront, trade-up and luxury markets may finally be recovering after lagging for years, AND our overall strong sales are no longer erratic but instead impressively consistent in beating prior year’s numbers month after month. While there is no guarantee that these will continue long term, they are still tremendous accomplishments for our Lake Norman real estate market.
Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- For the first time since the recession waterfront homes are overall in a seller’s market. We currently have only 4.69 months of supply of active listings. Waterfront sales in August represented 34.1% of Lake Norman’s total sales while comprising 35.6 % of our active listings. The average sales price of a waterfront home in August was $830,211 but the averages sales price of waterfront homes currently under contract is over $1 million. The average price per square foot of our waterfront homes came in at $237.77 down from last month;s $247.26, June’s $239.91 and May’s $259.33. Yet, the average price per square foot of those under contract is $256.41. It took on average 107 days days for a waterfront home to sell and they sold for 96% of the listing price. We currently have 117 waterfront homes under contract comprising 33.8% of Lake Norman’s total homes under contract. Of these 117, 67 are priced above $800,000 and whopping 42 are over $1 million. Our strength in waterfront sales clearly goes hand-in-hand with a stunning improvement in our luxury home sales.
- 51 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, buyers are willing to pay a premium for a new home. (That said, don’t forget to ask for all those great upgrades!) We currently have 108 new construction homes under contract in the MLS. The average sales price in August logged in at $428,318. The months of supply of active listings based on August’s sales dropped to 4.7 putting new construction back in a seller’s market.
- Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented less than 1% of Lake Norman’s total August home sales with just 2 distressed closed sale for the entire month. Distressed active listings currently comprise less than 1% of Lake Norman’s current total inventory of single family homes for sales. Distressed sales continue to play an insignificant role in our Lake Norman real estate market. One interesting note: The current inventory of distressed homes in Lake Norman are almost entirely in our trade-up and luxury price ranges. One of the two closed sales was a home in The Point at $1,710,000 and there are 2 properties over $1 million under contract and 2 more currently for sale in the MLS.
- 47.3% of Lake Norman’s August’s single family home sales were under $400,000.
- 60.9% of Lake Norman home sales in August were under $500,000.
- Indications that our strong market will continue are provided by our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 346. We have 20% more properties under contract than at the same time in 2016 and 29% more than September 6, 2015! Surely this will translate into some high numbers for the next several months. No shoes are dropping yet!
A closer look at the chart:
- The number of Active Listings today in Lake Norman is down 4% compared to last year’s at this time. After peaking in June at 990 our new listings are starting to drop off as they typically do at this time of year. This drop combined with strong sales means that buyers must act quickly when an especially a good property hits the MLS. Today we have 922 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings sits at 4.5 which puts us very much in a seller’s market. Keep in mind, however, within specific price ranges there are swings from a buyer’s market to a balanced to a seller’s market.
- Under Contract Show (conditional) sales are up an impressive 25% versus this time last year. The average price of our new contracts is also up 12% and the days on market dropped 14%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent strong future closed sales most likely in October/November.
- Pending/Under Contract No Show sales are also up a healthy 10%. The average price of our pending sales is up a huge 32%. These listings went under contract on average in 85 days which is 23% longer than last year. Coupled with our strong Under Contract Show numbers, these numbers indicate that for the next few months we should continue to post some strong sales compared to last year and previous years. 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 October.
- Lake Norman’s closed August home sales in our MLS as of today and as stated above, were 3% higher than last August’s. (And the second best August since 2005). The average price was down 10% compared to last year and our days on market was just 1% faster than last year’s.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- April 6, 2016: 297
- March 6, 2016: 234
- February 6, 2016: 207
- January 6, 2015: 176
- December 6, 2015: 202
- November 6, 2015: 222
- October 6,2015: 209
- September 7, 2015: 268
Here is a breakdown by price-range of our August 2017 closed sales in Lake Norman
- $1,000 – $99,999: 4+
- $100,000 – $199,999: 12-
- $200,000 – $299,999: 42++
- $300,000 – $399,999: 39++
(These price ranges represented 47.3% of our August home sales compared to 44.46% last month)
- $400,000 – $499,999: 28–
- $500,000 – $599,999: 17
(These price ranges represented 22% of our August sales compared to 22.5% last month)
- $600,000 – $699,999: 13
- $700,000 – $799,999: 19++
- $800,000 – $899,999: 10
- 900,000 – $999,999: 8++
(These price ranges represented 24.4% of August’s sales compared to last month’s 17.8%)
- $1,000,000 – $1,499,999: 9-
- $1,500,000 – $1,999,999: 2-
- $2 million+ : 2-
(#Solds $1 million+ = 6.3% of August’s sales compared 10.6% of July’s and 6.2% in June)
These numbers highlight our specific strengths and weaknesses in August. We saw impressive activity in the $200,000’s, $300,000’s, $700,000’s and $900,000’s while significant drops in the$100,000’s, $400,000’s and above $1 million. The most interesting category of price ranges was our trade-up $600,000 – $999,999 which jumped from 17.8% of our July sales to 24.5% in August. While the majority of Lake Norman’s sales (69.3%) were still under $600,000, our trade-up price ranges definitely improved.
Higher-end home sales in Lake Norman
Yes, the numbers aren’t huge for August after July’s hopeful increases. However, it is the under contract and pending sales that reflect a significant upswing in our lagging luxury housing market. We currently have 67 properties priced above $800,000 under contract and whopping 42 are over $1 million. What a stunning rebirth of our luxury housing market if we can sustain this trend.
Lake Norman’s Waterfront Homes
As I wrote above, for the first time since the recession waterfront homes are overall in a seller’s market. We currently have only 4.69 months of supply of active listings. Waterfront sales in August represented 34.1% of Lake Norman’s total sales while comprising 35.6 % of our active listings. The average sales price of a waterfront home in August was $830,211 but the averages sales price of waterfront homes currently under contract is over $1 million. The average price per square foot of our waterfront homes came in at $237.77 down from last month;s $247.26, June’s $239.91 and May’s $259.33. Yet, the average price per square foot of those under contract is $256.41. It took on average 107 days days for a waterfront home to sell and they sold for 96% of the listing price. We currently have 117 waterfront homes under contract comprising 33.8% of Lake Norman’s total homes under contract. Of these 117, 67 are priced above $800,000 and whopping 42 are over $1 million. Our strength in waterfront sales clearly goes hand-in-hand with a stunning improvement in our luxury home sales.
As this market evolves post recession, prices have gone up somewhat despite rather tepid sales but have not fully recovered. Almost all of my waterfront buyers have had to increase their price range when they realize how much better the options are when they do so. Or, I have had some higher-end waterfront buyers turn to off water properties when they can’t find something desirable in their price range. New listings with good water are selling more quickly than in the past while the rest are languishing. It is important for potential waterfront buyers to understand that there are fewer good options in the lower and trade-up price ranges so watch for new listings and act quickly. In the past month or two I have noticed a new trend: dated homes that are on great lots with exceptional water are selling within two weeks. Waterfront buyers seem to be more willing now to do major remodels or even tear down million dollar homes if the lots and locations are special. The lowest priced listings are mostly at the end of coves, can’t have docks or are in less desirable locations and they are what negatively impact the overall waterfront numbers.
13-Year Comparison of Lake Norman Home Sales By Month
* 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. ***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.
What a fascinating look at our highs and lows, especially the first eight months of this year! We went from a record-breaking high January to an almost record-breaking low in February to a HUGE March, a solid April, a HUGE May, an even HUGER June (Yes, I said
huger which isn’t a real word:-), and a very strong July and August. Lake Norman’s overall 2017 real estate market is now 17.1% ahead of the first 8 months of 2016 and we logged the highest first 8 months of home sales since I began this chart back in 2005. Note that we ended 2016 with over double the total sales of 2008, 2009, 2010 and 2011! I can’t wait to fill in the remaining numbers in our 13th column.
Summary and My Insight
- Our August closed sales were near record breaking reflecting the continued strength of our Lake Norman housing market in 2017.
- 2017 year-to-date we are 17,1% ahead of the same period last year and the highest first 8 months of a year ever.
- Our current number of homes Under Contract and Pending indicate we should have strong closed sales in September with no slowdown in sight!
- Our waterfront/luxury markets are showing some good signs of growth for the first time in years.
- 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. Interesting that they are in higher price ranges.
- Sellers in lower price ranges are making money! I have had 3 listings in the past few months where my sellers (formally my buyers) made nice profits on their homes. It is important to note that in every case they spent a great deal of money staging their homes with new carpet, refinished or new hardwood floors in main living areas, fresh paint in the popular grey and white tones and spruced up landscaping and curb appeal. 2 of the 3 painted their old wood kitchen cabinets white and they looked wonderful. All sold for slightly over asking with multiple offers.
- 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.
- Newer listing in the trade-up price ranges and homes on exceptional waterfront lots are selling quickly
- Forbes ranks North Carolina second on best states for business list.
- “We will continue to see folks and businesses moving here,” according to Mark Vitner, senior economist at Wells Fargo.
- Inventory levels are still relatively low and dropping.
- Our trade-up and luxury home sales Under Contract numbers remain more erratic than the lower price ranges.
- Mortgage interest rates, while down a bit are hovering at about 4%. There is much speculation as to where they are headed. Unemployment actually went up a tiny bit in the most recent release, while overall very high, the stock market went down a small amount this past week and economists can’t seem to agree on much of anything else. Where our interest rates will be in 12 months is pure speculation due to so may variables.
- 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.
- Strict loan standards implemented during the recession are still making it more difficult for buyers to qualify despite some easing and modifications. Here is another big unknown related to our current administration. There has been discussion about paring back on the Dodd-Frank Act. Some think removing these regulations will ease the mortgage loan process, especially for first-time buyers.
- 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 once again a part of the buying process for some price ranges and locations. Don’t procrastinate when considering a 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. See my price range analysis for the 2nd quarter of 2017.
As a Realtor, I find our current Lake Norman real estate market exhilarating. It is a whole lot more fun to see my clients selling their homes quickly and my buyers winning in multiple offers. But, not everyone is enjoying this market. Buyers who don’t act quickly or aren’t aggressive enough with their offers (both price and terms) are loosing out to other buyers and for them it is a stressful roller coaster ride. Sellers with dated homes or in less desirable locations can suffer long days on the market and face multiple price reductions. While improving, waterfront and luxury homes are still in a buyer’s market for the most part.
Buyers in 2017 in the lower price ranges should be prepared to act fast when a new listing comes on that suits you. Or, if you want a more affordable option in any price range, prepare to be more flexible, be willing to do some work on your newly purchased home and do your own updating, and, if willing, be more flexible about locations based upon our limited inventory. I just represented a buyer who won the bidding war by using what is referred to as an “escalation clause” where we stated that we would offer $1000 higher than their best offer up to $5000. In multiple offer situations, be prepared to go over the listing price. If you really love the home, be aggressive!
Sellers should watch a lot of HGTV and be prepared to do painting, flooring and staging to attract buyers! As I wrote above, I just sold several homes with multiple offers where in one case the seller tripled his investment in staging and preparing his home for the market and all three made money. The reality is that most of our Lake Norman homes are now dated and many are at the cut off age when they are going to need new HVAC units, roofs and other expensive repairs. 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. ALWAYS offer home warranty plans to buyers!
Always keep in mind that the real estate market in Lake Norman is extremely diverse. 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 rising along with prices it is not time to sit on the fence. With less than 2% 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 have also noticed a growing pace of price reductions. I think listing agents are getting sellers to lower prices more quickly now that we are just about through our strongest selling season. Our market is ever evolving!
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!
OTHER ARTICLES of INTEREST