A 22% increase in sales compared to last year, a 24% increase over last month’s sales and the best February since 2007? Even sleet, snow, and unusually cold weather didn’t slow down our hot real estate market. As I noted last month, Lake Norman’s housing market got crazy busy (my technical term for it) right after the holidays and we are now seeing this translated into closed as well as new contracts. Let’s take a closer look:
Lake Norman Market Report February 2015
* All data is from the Charlotte Regional Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 4.8% of Lake Norman’s total home sales. We had just 4 distressed sales in February with an average price of $185,800 (The highest closed sale price was only $525,000). Distressed active listings 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 were 26.5% of our February home sales while they currently comprise 37.4% of our active listings. The average sales price of a waterfront home in February was $2,200,000 and the average price per square foot was $235.46 which is a record high! (Significantly up from last month’s 198.44 and from our prior peak of $229 last summer). It took on average 142 days for a waterfront home to sell and they sold for 93% of the listing price. Overall, waterfront homes sales have picked but still aren’t selling at the rates they were in past years. We currently have 13.9 months of supply of active listings which puts waterfront homes very much in a buyer’s market.
- 18 new construction homes closed in February 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 50 new construction homes under contract in the MLS. The average sales price in February logged in at $337,230. The bulk of our new construction market in the MLS is still in our lower to middle price ranges.
- 54.22% of Lake Norman’s February single family home sales were under $400,000 which was a bit lower than last month’s.
- 72.29% of Lake Norman home sales in February were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 228 is up substantially from last month’s 202, and last March 6th’s 187. Our new contracts indicate our Lake Norman housing market is sustaining February’s momentum.
A closer look at the chart:
- The number of Active Listings in Lake Norman is 8% lower than last February’s. Our absorption rate/months of supply of active listings today dropped back down to 9.8 from last months 12.11 months so we are still in a buyer’s market but heading back to at least a balanced market (6 months of supply of active listings) soon. Within specific price ranges, however, there are swings from buyer’s market to balanced to even a few in a seller’s market.
- Under Contract Show (conditional sales), were up 16% 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 March/April. This number would indicate that our closed sales should well exceed last March’s. After a bit of a drop off in January, it looks like Lake Norman’s housing market is picking up rather quickly despite the lack of fresh new listings. Note that the days on the market is down 36%!
- Pending/Under Contract No Show sales were up an impressive 32% and these listings went under contract in only 74 days. These are the contracts that are past their inspection/due diligent periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. As I suggested last month, while we just barely matched January 2014 closed sales we are clearly gaining momentum after that one-month slump and should end the 1st quarter on a high note.
- Lake Norman’s closed home sales in as of today and as stated above, were 22% higher than last year’s! This also makes it the best February since 2007. The average sales price was 11% higher than last February’s and the average days on market was down 7%. Sales up, average price up and the number of days it takes to sell down…it can’t get much better than that.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
Here is a breakdown by price-range of our February 2014 closed sales in Lake Norman
- $24,900 – $99,999: 3
- $100,000 – $199,999: 10
- $200,000 – $299,999: 17
- $300,000 – $399,999 15+
(These price ranges represented 54.2% of our February home sales.)
- $400,000 – $499,999: 15+
- $500,000 – $599,999: 6
(These price ranges represented 25.3% which is higher than last month’s )
- $600,000 – $699,999: 5
- $700,000 – $799,999: 2
- $800,000 – $899,999: 1
- 900,000 – $999,999: 2
(These price ranges represented 12.0% which is up slightly down from last month’s )
- $1,000,000 – $1,499,999: 5+
- $1,500,000 – $1,999,999: 1
- $2 million+ : 1
(#Solds $1 million+ = 8.4% compared to an abysmal 3% last month)
The stand out price ranges in February in all of Lake Norman were the $300,000’s, $400,000’s and $1,000,000 – $1,500.000.
Higher-end home sales in Lake Norman
Mercurial and unpredictable still continues to come to mind when trying to describe our luxury housing market. August was such an improvement over the past years’. We even had two sales at or above $3,000,000. In September our numbers were back down with only 2 sales above $2 million and in October we had a nice increase in the $1,000,000 – $1,999,999 but we only had one sale over $2 million. In November they sank back down fairly dramatically in all price ranges above $700,000. In December we saw a jump in the $1,000,000 – $1,499,999 price range but one two sales above that price. In January we only had 2 sales above $1 million but in February we had 7 sales above $1 million and one over $2 million. I REALLY want to see more consistency in this niche!
Lake Norman’s Waterfront Housing Market
Our waterfront home sales in the entry and trade-up price ranges still represent the bulk of our sales. I have been showing a lot in these price ranges and I have noticed waterfront properties that have been sitting, sometimes for years, are now selling. Buyers may be realizing that prices will most likely go up once we get in the strong spring and summer months and are therefore more willing to compromise. We currently have 305 waterfront homes actively listed for sale on Lake Norman. With 22 closed sales of waterfront homes in February this means Lake Norman currently has 13.9 months of inventory of waterfront homes for sale which puts this niche in a strong buyer’s market overall but it varies quite a bit by price point.
Overall in 2014 Lake Norman had 415 waterfront sales compared to 403 in 2013. The average waterfront property in 2014 took 85 days to sell, sold for 95% of the listing price and cost $222.93 per square foot. The average waterfront property in 2013 took 112 days to sell, sold for 94% of the listing price and cost an average of $217.59. Waterfront home values in 2014 improved by a modest 2.4%.
I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman. 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. New construction in every price range is beating existing homes in popularity. On my tiny street there are 3 waterfront homes under construction…the first since we moved here in 2005. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of this low period as it is hard to predict what will come this spring.
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 Charlotte Region 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.
After a slight setback in January, our strong February closed sales now have us 10.3% ahead of last year but still well below 2007.
Summary and My Insight
- Lake Norman’s inventory of active listings remains low. While this is VERY frustrating to buyers it is important to keep inventories low in order to attain a balanced housing market of 6 months of supply of active listings.
- Our Lake Norman home values are stable and consistently improving overall. There are pockets of strengths and relative weaknesses which result in fluctuating average sales prices when combined for the entire Lake Norman real estate market. The lack of distressed sales has also contributed to higher overall average prices.
- The number of distressed homes for sale are so low they are truly irrelevant and did not play any perceptible role in our Lake Norman 2014 sales.
- New construction is definitely back. While we only sold 18 new homes last month through the MLS, we have 50 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. I have been showing in several new housing communities and they are booming! Custom and smaller groups of spec homes are popping up all over Lake Norman.
- Economists say that continued housing improvement depends on fundamentals like job growth, rising incomes and low vacancy rates all of which the greater Lake Norman and Charlotte area are experiencing.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Long term mortgage rates remain low. What is really amazing is that Jumbo loan interest rates are currently LOWER than conforming loan’s.
- I am personally experiencing a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman this year. 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.
- According to a July 1 article on Trulia Pro Blog, of their “7 signs of a Soon-to-Be Super Hot Market”, Lake Norman definitely has 4 of them including the new Whole Foods Market that opened on November 4th in Huntersville. This was one of their key signs of positive economic futures!
- The National Association of Home Builders is predicting a “Robust Year for Housing in 2015? including a 26% increase in new single family homes.
- Realty Trac’s 2015 Housing forecast comprised 5 top economists:
- Lawrence Yun, Chief Economist for the National Association of Realtors: Existing home sales will increase 5%-10% and a 40% jump in new home sales. More buyers will be returning to the market from improved job market conditions and buyers returning to the market after distressed property sales.
- Jonathan Smoke, Chief Economist for Realtor.com: We are forecasting median existing home prices to rise 4.1%, median new home prices to rise 5% and 8% growth in existing home sales in 2015.
- Christopher Thornberg, Principal Beacon Economics: We expect sales and price appreciation to pick up steam this year… prices will accelerate some–probably close to double digits by the end of next year
- Mark Zandi, Chief Economist Moody’d Analytics: House price growth in 2015 should be in the low single digits for both existing and new homes. New and existing home sales are expected to increase by as much as 20% in 2015
- Jed Kolko, Chief Economist Trulia: Markets with strong fundamentals of job growth and low vacancy rates should see price gains continue…the strongest source of housing demand will be young people getting jobs and forming households.
- Despite the comments above, there seems to be a bit of reluctance by many economist to say that 2015 is going to be a strong year for prices and sales.
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges unlike many areas in the country where they are seeing consistent price increases.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- While at record lows right now, interest rates are expected to increase in 2015.
- While improving, strict loan standards are still making it more difficult of buyers to qualify
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of re-sale listings is “stale”. Even new listings are many times homes that were on the market off and on for several years. Since new construction pretty much disappeared after the recession, we are now looking at an aging inventory of homes which is why buyers are turning more towards building or remodeling than in past years. Or, they are buying new construction or lots and building, especially on the water.
- 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 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.
My advice to Lake Norman home buyers has changed only slightly. I still emphasize the importance of good locations and prioritizing your list of features you want in your home and lot. But, if you are looking in a “HOT” neighborhood and price range or if you can’t find your perfect, move-in condition home, be open minded about homes that need some work. If the floor-plan is good, perhaps having to do some painting, new flooring etc. is your best option. 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 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.
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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