Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s January 2012 Sales Analysis: Things are looking up!

While I anticipated weak sales before an upswing this month, January wasn’t actually too bad.  We squeaked by just equaling our January 2011 sales

It is important to note that these numbers are only as good as the agents who report them. Expect an adjustment in our 46 sales in January upward perhaps two more sales by the end of the month since it takes some Realtors several weeks to actually input their sales into our MLS.  I create these reports early in the month while the information is still very fresh so always pad the sales upward just a bit.

Here are the January 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:

 

Some significant additional interesting statistics for you:

  • “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 31.1% of our closed sales in January which was a slight drop from the 36.7% last month, 36% in November, 19.8% in October, 10% in September, 16.8 in August,  18.5%  in July,  25% in June and 27% in May. Our active buyers right now are clearly folks looking for bargains. The good news is that our number of distressed active listings dropped to 9.5% of our total number of homes for sale in Lake Norman compared to 10.9 % in December which indicates that our ratio of distressed new listings is actually decreasing.  We are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
  • 22% of our closed sales were waterfront homes down from 33% last month, 19% in November,  28% in October and 38% in September.
  • 60.9 % of our January sales were under were under $400 and 71.7% were under $500,000. Clearly our lower priced homes are still driving the market.
  • Our average prices are down in our pending and closed sales but I believe this is more a reflection of our weaker higher end sales than actual price declines. Note that the average price of our conditional sales is 15% higher!
  • On February 1st the number of active listings for all of Lake Norman totaled 811, up from 752 on January 1st which was the lowest number since I started these reports in 2007.  To put this number in context, back in June of 2008 we had 1789 active listings.  Today we have 843 active listings in all of Lake Norman (area 13).

 

A closer look:

  • The number of Active Listings in Lake Norman increased 7.8% from last month but were 23% lower than last January. It should be expected that our inventory will continue to rise this spring but hopefully we will remain well below last year’s numbers. Our absorption rate/months of supply of active listings increased from 12.5% last month back up to 17.6% thanks to our low January sales.  Our shrinking inventory  is helping but at this lower pace of sales we are still twice as high as a balanced 6-8 months of supply in Lake Norman area (MLS area 13).

 

  • Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home)which don’t account for a significant segment of our housing market, remain extremely low most likely because sellers are unwilling or unable to take on the risk of waiting for the buyer’s home to sell before closing.

 

  • Conditional Sales increased for the second month in a row, this time 16%  when compared to January 2011  and  19.7% higher than last month’s. Our Lake Norman housing market has definitely picked up! These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late February/March. Based upon these numbers our closed sales in this month and next should exceed the same months in 2011.

 

  • Pending sales were also up compared to January 2011 AND last month as well.    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. While you are reading in the news about the national increase in pending sales here in Lake Norman our pending sales have been down so it is significant to see them picking up again!

 

  • The number of closed home sales in Lake Norman in January were just about equal to January 2011.  While we didn’t reach January 201o’s 53 sales it is good to see us at least equal to last year’s. (See the annual chart below).

 

Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:

  • February 1, 2012: 155 (much better than the past two months!)
  • January 1: 134 (the lowest ALL year)
  • December 1: 147
  • November: 169
  • October: 193
  • September: 183
  • August: 193
  • July: 178
  • June: 199,
  • May:  173
  • April 195,
  • March: 163
  • February: 142

We are now trending upward again after a lag of several months.  This uptick in sales coupled with our low inventory bode well for the overall health of the Lake Norman housing market.

 

Here is a breakdown by price-range of our January 2012 closed sales in Lake Norman’s area 13-1 to 13-5:

  • $42,000 – $199,999:  11        
  • $200,000 – $299,999: 11 
  • $300,000 – $399,999: 6

(These price ranges represented 60.9% of  January’s sales )

  • 400,000 – $499,999:  5
  • $500,000 – $599,999: 1

(These price ranges represented 13% compared to 16.6% last month)

  • $600,000 – $699,999:  4
  • $700,000 – $799,999: 2
  • $800,000 – $899,999: 3
  • 900,000 – $999,999:  2

(Solds for $600,000 – $1mill = 23.9% compared to 20% last month)

  • $1,000,000 – $1,999,999: 1  (The highest sale in January was only $1.075 million!)
  • $2 million+ : 0

(Solds $1million+ = 2% )

 

 8-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 have made an adjustment of  the totals reflecting the ACTUAL  sales  every month in 2009, 2010 and the totals in the prior calendar years.  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.

 

Summary and My Insight

The Good News and the Bad:

Very Good:

  • Inventory is way down
  • Conditional and Pending sales are up!
  • Number of distressed homes for sale remains low and is actually decreasing as a percentage of our total inventory
  • We seeing more and more new construction popping up (Not spec homes)
  • Higher-end waterfront lots are selling again. Another sign that construction is returning
  • Interest rates are at all time lows
  • Unemployment rates are dropping locally and nationally

Bad:

  • 47.8 % of our Lake Norman sales were under $300,000!
  • Distressed sales comprise a larger percentage of our sales than our inventory.  Buyers are still motivated by bargains.
  • Our highest closed sale last month was $1.075 million.  Our luxury home market was hit hard in the past three months but seems to be improving.
  • With a shrinking inventory of active listings, buyers have fewer options.  With fewer “screaming bargains” will buyers sit back a bit this winter hoping for for another wave of foreclosures or will they buy as they did over the summer realizing that those days are behind us? The national news reports about a potential onslaught of  new foreclosures may keep buyers from taking advantage of our low prices right now.
  • Home loans, especially construction loans, are still a challenging process.

I still believe that, overall, our home prices have stabilized.  I’m not seeing, for instance, the extremely low prices of waterfront home sales with good water that I did two years ago. The future of our Lake Norman real estate market still depends primarily on these two things:

1. How much ”shadow inventory” do we have in our Lake Norman area?  Will we see more distressed properties coming on the market later this year or next year? So far this hasn’t been the case.

2.  Consumer confidence based upon the national/global economy.

My advice to Lake Norman home buyers remains this: Look for homes that are in good locations and have most of the priorities on your list.  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 at all time lows and prices for the most part having hit bottom it is a good time to buy.  With only  9.5% of Lake Norman’s current listings being “distressed sales”,  the “shadow inventory” hasn’t impacted our market.  At this pace, I think our market will remain at a rocky bottom of sorts with a continuation of the erratic ups and downs in 2012.

 

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