Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s February 2018 Market Report

After a dip in January our Lake Norman real estate market kind of looks like it is back on track posting 60% more closed sales than February 2017. It is important to note, however, that February 2017 was a very weak month so while 112 closed sales is impressive, it is not quite as significant as it appears. There are also some indications in the numbers below that our short term market may struggle to meet last year’s record-breaking sales.

Here are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • February closed sales were 60% higher than February 2017 and 13% higher than last month’s.
  • Our inventory of active listings remains alarmingly low; currently 11% below last year’s which were also historically low.  It is hard to quantify but there is no doubt that low inventory does have of a negative impact on home sales.
  • While we had a strong month, I foresee a rocky next couple of months ahead.
  • Our trade-up price ranges $600,000 – $999,000) this month were weak again as a group.  The only thing consistent about this niche is their constant roller coaster ride of ups and downs.
  • Waterfront home sales volume is down quite a bit as is our inventory which could present challenges for this spring.

Let’s take a closer look:

Lake Norman real estate housing report

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • Waterfront homes moved back in to a seller’s market with 5.8 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in February represented only 22.3% of Lake Norman’s total sales (down from 31.6% last month) while comprising 19.9% of our active listings and 22% of our under contract listings.
    • The average price per square foot of our waterfront homes dropped to $221.09  which is quite low compared to most recent prior months including last month’s $271.81, November’s $253.94, October’s $241.15, September’s $219.07 and August’s $237.77.   
    • It took on average 146 days days for a waterfront home to sell and they sold for 96% of their listing price.
    • Overall, these numbers are quite weak across the board. While our waterfront homes are on the cusp of being in a seller’s market their percentage of our total Lake Norman sales, low inventory and drop in price are very concerning.  We will watch this trend closely!
  • 29 new construction homes closed in February through our MLS but this does not reflect an totally accurate picture of new home sales since so many are custom or are purchased directly from the builders and therefore never enter the MLS. The average listing price vs sales price of new construction single family homes was 101% so they are selling above their asking prices! 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 87 new construction homes under contract in the MLS. The average sales price in February logged in at $468,826.  The months of supply of active listings based on February’s sales is 8.2.
  •  There were 3 closed distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in February. We have 6 under contract and only 2 distressed active listing as of today. One interesting note: the average prices of all of these were in our trade-up ranges of $600,000 -$800,000. Clearly, distressed sales continue to play an insignificant role in our Lake Norman real estate market. 
  • 51% of Lake Norman’s February single family home sales were under $400,000.
  • 67.9% of Lake Norman home sales in February were under $500,000.
  • An indication that our market may face some challenges meeting last spring’s very strong sales is the fact that our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 280 is below last year’s.  (see below). We have 5% fewer properties under contract today than at the same time in 2017 but 20% more than March 6, 2016. We are up against 2017’s record-breaking sales and it looks like we may be facing a rocky path.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down a significant 11% compared to last year’s at this time.  As expected, they are up slightly from last month’s but at this time of year we should see more new listings than we have so far. As has been the case for over a year, buyers in hot price ranges and locations should act quickly when an especially good property hits the MLS.  Today we have only 733 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings is 6.5. Technically this means we are overall in a balanced market favoring neither buyers nor sellers.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 2% lower than last year’s.
  • Under Contract Show (conditional) sales are up 1% versus this time last year. The average price of our new contracts is up 5% and the days on market is down slightly.  UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent relatively modest future closed sales in April/May.
  • Pending/Under Contract No Show sales are down a whopping 20%.  The average price of our pending sales is up 43% and these listings have been on the market 22% longer than last year’s. These numbers indicate that in the next few months we will struggle to match last year’s record-breaking pace.  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 April.
  • Lake Norman’s closed February home sales in our MLS as of today and as stated above, were 60% higher than last February’s. While a very impressive number, it is important to put this in context because last February was a particularly low month for closed sales. That said, 112 closed sales is the second best February since 2015.  The average price was also up 26% which is good news as well. However, our average days on market number was 9% longer 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:

  • March 8, 2018: 280
  • February 8, 2018: 244
  • 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

Here is a breakdown by price-range of our February 2018 closed sales in all of Lake Norman

  • $1,000 – $99,999: 0
  • $100,000 – $199,999: 9
  • $200,000 – $299,999: 16
  • $300,000 – $399,999: 32+

        (These price ranges represented 51.0% of our February home sales compared to 52% last month)

  • $400,000 – $499,999:  19+
  • $500,000 – $599,999: 10

       (These price ranges represented 25.9% of our February sales compared to 20.4% last month)

  • $600,000 – $699,999: 6+
  • $700,000 – $799,999: 4–
  • $800,000 – $899,999: 4+
  • 900,000 – $999,999: 2-

       (These price ranges represented 14.3% of our February sales, 20.4% of our January sales, 14,5% of December’s sales, November’s 22.1%, October’s 13.2%, September’s 23.7% and August’s 24.4%)

  • $1,000,000 – $1,499,999: 7+
  • $1,500,000 – $1,999,999: 2+
  • $2 million+ : 1

       (#Solds $1 million+ = 8.9% of our February sales, 7.1% of January’s sales, 6% of December’s sales, 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 February, our stand out price ranges were the $300,000’s, $400,000’s, 600,000’s, 800,000’s and the $1,000,000 -$1,999,999. It is interesting to look at how each group of prices did compared to last month. The most significant drop was in the $700,000’s and $900,000’s again reflecting the volatility in our trade-up price ranges from $600,000 – $999,999. They literally have gone up and down every other month! The majority of Lake Norman’s sales (76.9%) 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 within price range sales.

Higher-end home sales in Lake Norman

Properties above $1 million represented 8.9% of our total closed sales in February.  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 moved back in to a seller’s market with 5.8 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in February represented only 22.3% of Lake Norman’s total sales down from 31.6% last month while comprising 19.9% of our active listings and 22% of our under contract listings.
  • The average price per square foot of our waterfront homes dropped to $221.09  which is quite low compared to most recent prior months including last month’s $271.81, November’s $253.94, October’s $241.15, September’s $219.07 and August’s $237.77.   
  • It took on average 146 days days for a waterfront home to sell and they sold for 96% of their listing price.
  • Overall, these numbers are quite weak across the board. While our waterfront homes are on the cusp of being in a seller’s market their percentage of our total Lake Norman sales, low inventory and drop in price are very concerning.  We will watch this trend closely!

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. ***Our MLS just merged with two other’s so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that this year’s numbers will be comparing apples to apples. However, 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 and are two month in to 2018.  Our combined total of 211 so far this year is actually very strong compared to prior years. But take a look at the huge numbers we are up again in the rest of 2017!

Summary and My Insight

Good signs/news for 2018:

  • With two months in the books we are actually doing better than most prior years including last year.
  • 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.
  • Sellers in lower price ranges are making money!  I just had another listing sell within the first few days with multiple offers. As with last year’s sales, I need to emphasize that in every case my sellers have been willing to spend the necessary money staging their homes including, refinishing or new hardwood floors in main living areas, fresh paint in the popular grays and white, new carpet and spruced up landscaping and curb appeal.  One huge continuing success is painting wood kitchen cabinets white. When combined with the fresh gray walls and staging they look like model homes!
  • 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.
  • Fannie Mae & Freddie Mac  has increased their Conventional Loan Limit to $453,100 from the current $424,100!

Challenges/Weaknesses for 2018:

  • Interest rates are rising rather quickly and there are concerns about the future pace of these increases and potential inflation.
  • Inventory levels are still very low and could be a deterrent to sales if they don’t increase substantially as is typical in the spring.
  • Waterfront homes posted weak numbers this month which has given me reason to feel uncertain about where they are headed.
  • 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.  In the long run, however, 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 4th quarter of 2017. 

Final thoughts: 

As I wrote last month:

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 listed and sold another home with multiple offers which can be completely attributed it to the renovations and staging.  How do I know this?  The seller had it listed last year is it’s dated condition with no staging and it sat on the market.  We are under contract about $20,000 above where they were before! Also, remember that 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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