lake norman real estate, Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s December 2017 Market Report

Lake Norman Home Sales Market Report Dec 2017

All data is from the Carolina Multiple Listing Service.

December numbers are out and with them we now have a complete picture of 2017! Below are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • We had an extraordinary, record-breaking month compared to all prior years, logging in 165 closed sales of single family homes in December. (See green and yellow chart below).
  • At 2006 closed sales in 2017 we ended up 17.24% above 2016’s total sales and logged in the highest annual volume of home sales in Lake Norman’s history, even exceeding 2005’s previous record high by 7.6%.
  • The average home price in Lake Norman was. 1/2 of 1% higher than 2016 and the median price was up 1.2%.  These are extremely modest gains.
  • Our trade-up price ranges dropped again after a good month.  The only thing consistent about this niche is their constant roller coaster ride of ups and downs.
  • Waterfront homes slipped back into a buyer’s market after two pretty strong months over the summer. Waterfront home prices have NOT recovered completely from their pre-recession highs.

While there is no guarantee that our high sales numbers will continue long term, 2017 was a remarkable year for our Lake Norman real estate market. That said, our prices have not risen at the same rate as Charlotte’s and the US and we still need to see improved consistency in our waterfront, trade-up and luxury niches for us to completely regain our pre-recession levels.

Some significant additional statistics for you:

  • Waterfront homes slipped back into a buyer’s market with 7.4 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in December represented only 18.2% of Lake Norman’s total sales while comprising 31.7% of our active listings and 28.4% of our under contract listings.
    • The average price per square foot of our waterfront homes came in at $253.94, up from last month’s $241.15. September’s $219.07 and August’s $237.77 but fell a bit short of May’s high of $259.33. 
    • It took on average 128 days days for a waterfront home to sell and they sold for 95% of their listing price.
    • These numbers indicate a slight decline in our waterfront housing market since last month.
  • 50 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 100%. Clearly, buyers are willing to pay a premium for a new home. (That said, don’t forget to ask builders for all those great upgrades!) We currently have 74 new construction homes under contract in the MLS. The average sales price in December logged in at $436,873.  The months of supply of active listings based on December’s sales dropped down to 5.0 which favors the sellers/builders.
  •  There were only 3 closed distressed sales” (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in December.  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.
  • 46.1% of Lake Norman’s December’s single family home sales were under $400,000.
  • 68.5% of Lake Norman home sales in December were under $500,000.
  • An indication that our strong market will continue relative to the time of year is provided by our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 206.  (see below). We have 12.6% more properties under contract today than at the same time in 2017 and 17% more than January 6, 2016. While more modest than prior months, this should translate into some solid sales numbers for the next several months in the context of our typical seasonal slowdowns.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down 5% compared to last year’s at this time.  After peaking in June at 990 our new listings have consistently decreased each month. This drop combined with strong sales means that buyers in hot price ranges and locations should act quickly when an especially good property hits the MLS.  Today we have only 697 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings sits at 4.2 which means we are very much overall in a seller’s market. Keep in mind, however, within specific price ranges there are dramatic swings from a buyer’s market to a balanced to a seller’s market.  The average price is about the same as last year.
  • Under Contract Show (conditional) sales were up an impressive 20% versus this time last year. The average price of our new contracts was down 2% and the days on market was down 4%. 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 February/March.
  • Pending/Under Contract No Show sales were down 2%.  However, the average price of our pending sales is up a whopping 44%! These listings went under contract on average in 96 days which is 41% slower 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 the same months 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 February.
  • Lake Norman’s closed December home sales in our MLS as of today and as stated above, were 26% higher than last December’s. And, they were significantly higher than all prior December sales, even beating December 2005’s! The average price was down 3% compared to last year and our days on market was 3% faster (3 days) 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:

  • January 8, 2018: 206
  • December 8, 2017: 264
  • November 6, 2017: 282
  • October 6, 2017: 301
  • 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

Here is a breakdown by price-range of our December 2017 closed sales in all of Lake Norman

  • $1,000 – $99,999: 4+
  • $100,000 – $199,999: 10
  • $200,000 – $299,999: 31
  • $300,000 – $399,999: 31+

(These price ranges represented 46.1% of our December home sales compared to 48.6% last month)

  • $400,000 – $499,999:  37+++
  • $500,000 – $599,999: 18+

(These price ranges represented 33.3% of our December sales compared to 21.4% last month)

  • $600,000 – $699,999: 11+
  • $700,000 – $799,999: 4-
  • $800,000 – $899,999: 5–
  • 900,000 – $999,999: 4–

(These price ranges represented 14,5% of December’s sales compared to last month’s 22.1, October’s 13.2%, September’s 23.7 and August’s 24.4%)

  • $1,000,000 – $1,499,999: 4-
  • $1,500,000 – $1,999,999: 5+
  • $2 million+ : 1–

(#Solds $1 million+ = 6% of December’s sales compared to 7.86% in November, 7.8 % in October, 9.3% in September, 6.3% of August’s sales,10.6% of July’s and 6.2% in June)

In my opinion, this price range breakdown is one of the most important resources in my market reports because it truly highlights our specific strengths and weaknesses each month. In December, our stand out price ranges were the $300,000’s, $400,000’s, $500,000,s, $600,000’s and the $1,499,999 – $1,999,999. What a change from last month! Our $400,000 – $699,999 were on fire while we saw a significant drop off of our trade-up price ranges ($700,000 – $999,999) and even our low $1 million price range dropped.  Seriously, if you look at the group of price ranges from $600,000 – $999,999 they literally have gone up and down every other month! Every time I think our trade-up home niche is back it drops back down while the majority of Lake Norman’s sales (79.4%) were still under $600,000.  As I have said so many times, with our Lake Norman real estate market you really need to know specifics about your price niche because there is such disparity in price range sales.

Higher-end home sales in Lake Norman

Properties above $1 million represented  only 6% of our total closed sales in December.  Like our trade-up price ranges, our luxury housing market is still terribly inconsistent and has not fully recovered from the recession.

Lake Norman’s Waterfront Homes

As I wrote above. waterfront homes slipped back into a buyer’s market with 7.4 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in December represented only 18.2% of Lake Norman’s total sales while comprising 31.7% of our active listings and 28.4% of our under contract listings.
  • The average price per square foot of our waterfront homes came in at $253.94, up from last month’s $241.15. September’s $219.07 and August’s $237.77 but fell a bit short of May’s high of $259.33. 
  • It took on average 128 days days for a waterfront home to sell and they sold for 95% of their listing price.
  • These numbers indicate a slight decline in our waterfront housing market since last month.

A critical fact about our waterfront housing market is the trend of sales prices. Our average sales prices, median sales prices and average price per square foot HAVE NOT recovered to our peaks before the recession!

  

13-Year Comparison of Lake Norman Home Sales By Month

Lake Norman Real Estate Market Report Chart by month and year

* 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 now that we have the entire year of 2017 in the books.  We had 7 record-breaking months, 4 strong months and one abysmal month of February. Lake Norman’s overall 2017 real estate market was 17.24% above 2016 and we logged the highest annual home sales since I began this chart back in 2005. Note that we ended 2016 with over double the total sales of 2008 and 2009.

Summary and My Insight

Good signs/news for 2017:

  • Our record-breaking December sales were a staggering 26% higher than last December’s.  This truly puts an exclamation point at the end of our overall Lake Norman’s 2017 housing market.
  • 2017 ended 17.24% higher than all of 2016.
  • Our current number of homes Under Contract and Pending indicate we should have decent closed sales in January and February
  • 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.
  • Move-in condition, updated listings 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.
  • Fannie Mae & Freddie Mac just announced that the 2018 Conventional Loan Limit will increase to $453,100 from the current $424,100!

Challenges/Weaknesses from 2017 that may impact 2018:

  • The Federal Reserve raised their interest rates so it will be important to watch the trend in mortgage rates this year
  • Inventory levels are still very low and could be a deterrent to sales if they don’t increase as is typical in the spring.
  • Our trade-up and luxury home sales continue to be erratic unlike the lower price ranges.
  • The new tax bill is predicted to negatively impact our country’s housing market according to the National Association of Realtors and the National Association of Home Builders, especially in states like New York, New Jersey, Florida and California where taxes and prices are high.  This may actually help us if more people decide to leave these states and choose NC as their new home.
  • 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.  Much of our housing inventory is becoming more and more dated so it will be incumbent upon sellers to do more significant updating and staging to compete with new homes.  Of course, the alternative is to drop their sales price but most buyers are not willing to buy a home here that needs a lot of work.
  • 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 now a necessary 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 3rd quarter of 2017. 

Final thoughts: 

My family moved to Lake Norman from California in 2005 seeking a better quality of life and a lower cost of living.  I have watched our area grow immensely over the past 12+ years. There is no doubt that Lake Norman is still a very appealing destination for folks from all over the country. We now can compete with many trendy cities throughout the country with our amazing number of new restaurants, breweries and entertainment.  But, with the passing of time, our pre-recession “new” homes are now a bit dated and will be needing new HVAC sysems, water heaters and roofs. With a complete halt to new construction during the recession years we are now lacking the number and type of homes that appeal to many of today’s buyers.  For this reason new construction and remodeled homes are selling more quickly than ever.  It is more of a challenge for our “dated” homes and subdivisions where open floor plans are rare and kitchens and bathrooms are in less appealing woods and materials.  The result has been the need for sellers to do updating before listing and buyers, especially waterfront, need to be more willing to do remodeling after they purchase IF they feel they got a good “deal”. Today, the bottom line comes down to price, location, condition, updates and proximity to desired amenities.

Buyers today in the lower price ranges should be prepared to act fast when a new listing that has been updated comes on the market. Or, if you want a more affordable option in any price range, be prepared to be more flexible.  This means a willingness to do your own updating if you can’t afford an updated home, and, if possible, 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! 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!  

Sellers should watch a lot of HGTV and, if possible, be prepared to do painting, new flooring, painting kitchen cabinets white when feasible 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. 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 so, if possible, put on that new roof, replace the HVAC units while you are updating.  ALWAYS offer home warranty plans to buyers!

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