Our Lake Norman home sales in December, while 6% below last year’s, were actually the highest monthly sales of our fourth quarter 2015 and the second best December since 2006. After an impressive first 9 months in 2015, our last three months just couldn’t match 2014’s exceptionally strong fourth quarter. That said, given that our inventory of active listings is still insanely low (9% below last year’s), it is actually impressive that we logged as many sales as we did. And, for the year, our 2015 closed single family home sales ended up 7.3% higher than 2014’s! After 9 straight months of beating the 2014 sales, October broke our winning streak but not enough to take away our annual sales increase. 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 only 2.6% of Lake Norman’s total December home sales. We had just 3 distressed sales with an average price of $478,185. (The highest closed sale price was $1,695,000 but the other two were in our lowest price ranges). Distressed active listings currently comprise only 2.5% 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 dropped down to only 20.5% of our December sales, the lowest percentage I can remember since doing these reports. At the same time they currently comprise 37.5% of our active listings. The average sales price of a waterfront home in December was $943,708. We have an exceptionally low number of waterfront homes for sale under $1,000,000 on the market at this time so it doesn’t surprise me that prices have increased. The average price per square foot was $232.61. It took on average 103 days for a waterfront home to sell and they sold for 93% of the listing price. We currently have 54 waterfront homes under contract. Our waterfront homes’ months of inventory at 11.2 puts them in a buyer’s market but this varies considerably by price range. Waterfront home sales continue to be mercurial.
- 17 new construction homes closed in December 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 95%. This was the lowest all year which I believe was due to builders wanting to close out homes in 2015. We currently have 60 new construction homes under contract in the MLS. The average sales price in December logged in at $427,349. The months of supply of 10 actually puts this group in a buyer’s market for the first time all year.
- 56% of Lake Norman’s December single family home sales were under $400,000.
- A whopping 73.5% of Lake Norman home sales in December were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 176 is actually greater than the same period for the past two years. Last year on this date we had 154 under contract and in 2013 we had 155. Good way to start 2016!
A closer look at the chart:
- The number of Active Listings today in Lake Norman is a substantial 9% lower than last year’s. Our absorption rate/months of supply of active listings dropped to 6.1 which puts Lake Norman back in to an overall balanced market 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. Lake Norman is not alone as throughout the country economists have noted the low inventory of active listings and how this is impacting sales volumes.
- Under Contract Show (conditional sales), are UP an impressive 16% versus this time last year.These are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. They represent future closed sales most likely in late January/February. This number would indicate that by January we may start logging in some seasonally competitive numbers again.
- Pending/Under Contract No Show sales are up 12%. These listings went under contract on average in 89 days. 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 in the next few weeks. These would indicate that we should see some strong closed sales in January.
- Lake Norman’s closed December home sales in our MLS as of today and as stated above, are 6% below last year’s. (Keep in mind that we should have about 3 or 4 more sales added as slower agents input their sales so we may come closer to matching last year’s). Some positive signs: these closed in only 92 days or 6% faster than last year’s. Good properties are selling in 3 months yet our average active listing has been on the market for 161 days. This is the crux of the problem in Lake Norman. Stale, over-priced listings are sitting and buyers are pouncing on new listings.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- Januuary 6, 2015: 176
- December 6, 2015: 202
- November 6, 2015: 222
- October 6,2015: 209
- 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
Here is a breakdown by price-range of our November 2015 closed sales in Lake Norman
- $0,000 – $99,999: 0
- $100,000 – $199,999: 15++
- $200,000 – $299,999: 27+
- $300,000 – $399,999 24
(These price ranges represented 56.4% of our December home sales)
- $400,000 – $499,999: 20+++
- $500,000 – $599,999: 9
(These price ranges represented 24.8%, higher than the past several months)
- $600,000 – $699,999: 5-
- $700,000 – $799,999: 5
- $800,000 – $899,999: 4+
- 900,000 – $999,999: 0-
(These price ranges represented only 12% compared to 17.2% last month and 19.8% in October)
- $1,000,000 – $1,499,999: 5+
- $1,500,000 – $1,999,999: 1
- $2 million+ : 2++
(#Solds $1 million+ = 6.8% )
The stand out price ranges in December in all of Lake Norman were the $100,000, $200,000’s, $400,000’s and $1 million – $1.5 million.
Higher-end home sales in Lake Norman
While better than last month, our higher priced home sales just aren’t where they should be. With only 17 sales in all of December over $700,000 it is clear that this home buyer has jumped back on the fence. While I can justify the up to $1.3 million a bit due to lack of good inventory of active listings, we have a large inventory of high-end luxury homes so that isn’t an excuse for this niche. Mercurial once again comes to mind!
Lake Norman’s Waterfront Housing Market
So, here is the reality of Lake Norman’s waterfront housing market: We are essentially running out of good lower priced waterfront homes, even tear-downs, and very few are coming one the market. Gone are the great tear-downs or good but distressed homes in the $300,000-$800,000 price ranges. I work with a number of waterfront buyers and honestly there aren’t even many good properties on the market right now up to $1.3 million on the southeast side of the lake. Unfortunately, waterfront buyers come to Lake Norman expecting to find good options in the lower and trade-up price ranges many times leave disappointed. We still have some, but they are mostly at the end of coves, can’t have docks or are in less desirable locations. I have sold several luxury home buyers waterfront lots this year as an alternative to settling for a home that doesn’t suit them or needs too much work. My gut is telling me that when spring arrives and new listings come on the market they are going to be at higher price ranges because the demand is there. Prices are going up out of circumstances rather than overall market trends.
As of today we have 51 waterfront properties under contract and our months of supply based on the December sales is 11.2. This puts waterfront homes back into a buyer’s market. However, it is important to note that these active listings have been on the market on average 228 days while the average days on market for waterfront home sales in December was only 103. Can you say stale inventory? Another issue: 20% of our active waterfront listing are over $900,000 and yet this niche represented only 6.8% of our sales in December. Waterfront home buyers are going to have to lower their expectations and/or be willing to be more flexible. Keep in mind that the only finite property Lake Norman has is waterfront so supply and demand should drive prices up consistently in the future. Seriously, buy as soon as possible…this spring, if you find a waterfront property with good water in an acceptable price range.
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 11 year chart of our sales by month as it really gives us a good sense of where we are today and where we have been over the past 11 years. This one is particularly meaningful because we now have 2015 in the books. 7.2% increase over 2014 is only part of the story. Look at those recession numbers and you can see just how far we fell and just how far we have come. 2015 exceeded all years back to 2006 so in sheer volume our Lake Norman housing market has recovered. Overall 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, until the 4th quarter. What will 2016 look like? If we get more inventory I think we will at least match 2015 but it really depends on inventory, interest rates and demand.
Summary and My Insight
Good signs/news remains about the same as last month:
- Lake Norman’s historically low inventory of active listings puts pressure on demand and plays a role in firming up prices.
- 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.
- New listings in the lower price ranges that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Interest rates, while rising, are still below earlier predictions for 2015. This may change in 2016!
- Economists are predicting stronger sales in the south next year and Realtor.com even ranks Charlotte as the #8th hottest market in 2016. They predict a 10% increase in sales and a 6.5% increase in the median prices.
- Interest rates are going up.
- Lake Norman’s low inventory is comprised of a lot of stale inventory. Good fresh new listings are selling quickly so our low inventory is even worse when you consider the number of listings that have been sitting due to price, location, condition or age.
- Waterfront tear-downs and lots are selling but are also disappearing. More buyers are willing to build or do major renovations if they can get “good” waterfront lots but with such low inventory it is frustrating and it is tough to accept that prices are going up.
- Our trade-up and luxury price ranges are still very much in a buyer’s market.
- 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 in 2016 will see only modest gains.
- 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 for some price ranges and locations. Don’t procrastinate when considering a new listing because they are selling quickly!
- On the flip side, most 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.
If you are looking in a “HOT” neighborhood and price range be prepared to make an offer quickly. No matter what, have your pre-approval letter in hand before even looking at homes. This is particularly important due to the new TRID closing process that took effect Oct. 2nd. The new mandatory waiting periods during the loan process mean your lender has to be ready to go the minute you sign a contract on a property. I can’t emphasize this enough! Ask your lender and Realtor if they have experienced and are prepared to close using all of the new forms and deadlines. Then get your lender everything they need as soon as possible!
January is officially our slowest month of the year for closed sales but the beginning of the signs of spring. (See annual chart above). Now that the holidays are behind us buyers are out looking again. By February inventories will start to grow and by March things should be hopping.
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 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.
My Mantra: 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 sell in the future really isn’t a bargain at all. Be smart!
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