February marked the second month in a row where the number of single family home sales were below 2010’s Lake Norman home sales. However, if you read my last article you will know that we have seen a remarkable improvement in activity in the past few weeks.
A closer look:
- The number of Active Listings remain below last year’s. We are seeing a handful of new listings but not a significant spring bump which is very positive for our overall Lake Norman housing market. However, due to our low February closed sales, our months of inventory (absorption rate) remains very high at 25 months. Our goal of a truly balanced housing market of 6-8 months of supply is still out of reach. Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. Despite this set back, it is very good news that our inventory is remaining low. Note that the average price of our active listings dropped 16% compared to February 2010. We continue to see a number of price reductions.
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home) which don’t account for a signifcant segment of our housing market, have been declining for several months and are now only 100% higher compared to last year.
- Conditional Sales and our new “Due Diligence” catagory increased a whopping 42 % this month when compared to February 2010. These are homes that just went under contract and still have financial and inspection conditions. They represent potential future closed sales most likely in April or May. And, it is these numbers that prompted me to say we are currently in a “hot” market. The million dollar question is will this be a sustained rally or just a blip on the screen of our Lake Norman housing market for 2011.
- Our pending sales represented a 14% decrease from a year ago. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. Our Pending numbers have been down for the past 3 months but should be improving once the Conditional/Due Diligence sales progress. These numbers would indicate that our closed sales this month will be lower than 2010’s for the third month in a row.
- The number of closed sales dropped by 12% compared to February 2010 as expected.
One important note: Our average prices dropped in all 5 categories for the first time. Bargains are driving our Lake Norman housing market now more than ever. Price reductions and low offers are part of everyday life and I think contribute greatly to our recent rise in new sales contracts. Sellers, both banks and individuals, are negotiating!
The total number of Lake Norman single family homes under contract (but not yet closed) on February 28, 2011 jumped to 163 compared to January 31st’s 142; December 31st’s 141, to November 30th’s 169, to August’s and July’s numbers of 157, and to June’s 169. While it looks like our first quarter of 2011 will be disappointingly soft there are indications that at least April/May may bounce back up.
Here is a breakdown by price-range of our February 2011 closed sales in Lake Norman’s area 13- to 13-5:
- $22,000 – $199,999: 4 (Conditional, Cont & Pending =29 )
- $200,000 – $299,999: 14 (Conditional, Cont & Pending = 38)
- $300,000 – $399,999: 8 (Conditional, Cont & Pending = 25)
- (Solds were 60% compared to 63% last month)
- 400,000 – $499,999: 6 (Conditional, Cont & Pending = 12)
- $500,000 – $599,999: 3 (Conditional, Cont & Pending = 12)
- (Solds were 21% compared to 20% last month)
- $600,000 – $699,999: 4 ( Conditional, Cont & Pending = 11)
- $700,000 – $799,999: 2 ( Conditional, Cont & Pending = 10)
- $800,000 – $899,999: 2 (Conditional, Cont & Pending = 4)
- $900,000 – $999,999: 0 (Conditional, Cont & Pending = 5)
- (Solds for $600,000 – $1mill = 19% compared to 11% last month)
- $1,000,000 – $1,999,999: 0 (Conditional, Cont & Pending = 15)
- $2 million+ : 0 (Conditional & Pending = 2)
- (Solds $1million+ = 0% compared to 6% last month)
- (Total Conditional, Contingent and Pending =163)
Last month our highest closed sale was $876,000 so clearly our higher end homes languished in early 2011. However, based upon our properties currently under contract, there is a significant improvement in our trade-up prices ranges again. We even have 2 properties over $2 million under contract.
7-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.
**I have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009 and 2010 and the totals in the prior calendar year. The columns may not add up but I do my best with what I have to work! I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Above is a snapshot of Lake Norman home sales numbers in the context of the past 7 years. As you can see, our February sales were lower than last year’s and were only slightly higher than our weakest February of 2009.
Based upon our relatively low Pending sales right now, it looks as if this month will struggle to match March of 2010 rather than show a double-digit increase as we experienced in November and December. April is going to be a key month to watch. Will our jump in recent activity translate to higher closed sales in April and May? And, can our Lake Norman housing market sustain this increased pace?
It is important to point out that our local Lake Norman housing market is not tracking with either Charlotte or the US real estate trends. So, are we experiencing the “double dip” Case-Shiller is reporting in most markets? Clearly, if you look at the chart above, 2009 was our first low in terms of the number of Lake Norman homes sold and we did take a second dip in the number of sales the first quarter of this year. However, our Lake Norman housing market’s average prices have not yet hit bottom so unlike many markets like California who saw an increase in prices last year which are now falling backwards, our sales prices have been trending downward since the beginning of the recession. Recent sales have been at rock bottom prices so perhaps we are finally about to hit our price bottom.
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