Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s January 2018 Market Report

January numbers are out and based on these we unfortunately launched our new year out on a rather modest note. Below are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • January sales fell 11%  when compared to last year, logging in only 98 closed sales of single family homes. This is the first month since February 2017 that a monthly total sales fell below the prior year’s.
  • Our inventory of active listing remain very low; currently 7% below last year’s which were also low.  It is hard to determine how much but there is no doubt that very low inventory does have of a negative impact on home sales.
  • The average home price of properties sold in January in Lake Norman was down 8% reflecting a weakness in the higher end segment of our market.
  • Our trade-up price ranges jumped back up in January.  The only thing consistent about this niche is their constant roller coaster ride of ups and downs.
  • Waterfront homes remain overall in a buyer’s market for the second month in a row after two pretty strong months over the summer. Waterfront home prices have NOT recovered completely from their prerecession highs.

Wow, after a consistently strong month over month year in all of 2017, our Lake Norman real estate market started out 2018 without 2017’s gusto.  But, keep in mind that last January was a record-breaking month. Our January closed sales and average sales price were down and our average days on market was up a whopping 24%. That said, our numbers of under contract and pending sales may lead to some improved closing sales in the next few months.

Let’s take a closer look:

Lake Norman real estate market report January 2018

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • Waterfront homes remain in a buyer’s market for a second month in a row with 7.8 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in January represented 31.6% of Lake Norman’s total sales while comprising 34% of our active listings and 27.5% of our under contract listings.
    • The average price per square foot of our waterfront homes came in at $271,81 which actually is a new monthly high since the recession and up from last month’s $253.94, October’s $241.15, September’s $219.07 and August’s $237.77.  If this trend continues for several months then it will substantiate that while our number of sales are modest, prices are going up on the good properties that are selling. 
    • It took on average 105 days days for a waterfront home to sell and they sold for 94% of their listing price.
    • Overall, these numbers are sending us mixed messages given our strong price per square foot and days on market but with our current inventory/number of sales indicating our waterfront homes are in a buyer’s market. Interesting to watch in the next few months!
  • Only 19 new construction homes closed in January 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 99%. 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 81 new construction homes under contract in the MLS. The average sales price in January logged in at $355,940 down from $436,873 last month.  The months of supply of active listings based on January’s very low sales jumped up to 13.4.  I am wondering if this past month’s sales were impacted by builders trying to close as many as possible at the year end of 2017?
  •  There were NO closed distressed sales” (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in January!  And, there is only one distressed active listing as of today. Clearly, distressed sales continue to play an insignificant role in our Lake Norman real estate market. 
  • 52% of Lake Norman’s January single family home sales were under $400,000.
  • 63.3% of Lake Norman home sales in January 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 244.  (see below). We have 7.5% more properties under contract today than at the same time in 2017 and 17.9% more than February 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 trends.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down 7% compared to last year’s at this time.  As expected, they are up slightly from our low of 697 last month but not close to our peak last June at 990. 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 712 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings jumped up to 7.3 from last month’s 4.2 because of our drop in sales. Technically this means we are very much overall in a buyer’s marketKeep 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 7% lower than last year’s.
  • Under Contract Show (conditional) sales are up 8% versus this time last year. The average price of our new contracts is up 8% and the days on market is unchanged.  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 March/April.
  • Pending/Under Contract No Show sales are up 7%.  However, the average price of our pending sales is up a whopping 56%! These listings went under contract on average in 97 days which is 33% slower than last year.  Coupled with our strong Under Contract Show numbers, these numbers indicate that in the next few months we should post some stronger sales than this past month.  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 March.
  • Lake Norman’s closed January home sales in our MLS as of today and as stated above, were 11% lower than last January’s. But, looking on the bright side, they were the third highest January since 2005. Because last January was a record-breaking month if we put this January’s sales in context they were actually pretty good. That said, the average price was down 8% compared to last year and our average days on market number was 24% slower 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:

  • 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
  • February 6, 2016: 207

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

  • $1,000 – $99,999: 0-
  • $100,000 – $199,999: 10
  • $200,000 – $299,999: 15-
  • $300,000 – $399,999: 26+

(These price ranges represented 52.0% of our January home sales compared to 46.1% last month)

  • $400,000 – $499,999:  11–
  • $500,000 – $599,999: 9-

(These price ranges represented 20.4% of our January sales compared to 33.3% last month)

  • $600,000 – $699,999: 3–
  • $700,000 – $799,999: 10++
  • $800,000 – $899,999: 2–
  • 900,000 – $999,999: 5+

(These price ranges represented 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: 5+
  • $1,500,000 – $1,999,999: 1–
  • $2 million+ : 1

(#Solds $1 million+ = 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 January, our stand out price ranges were the $300,000’s, $700,000’s, 900,000’s and the $1,000,000 -$1,499,999. With 42% fewer sales than last month, almost all price ranged dipped below last months numbers so these price ranges truly stood out.  It is interesting to look at how each group of prices did compared to last month. The most significant drop was in the $400,000-$600,000 while our trade up price ranges from $600,000 – $999,999 improved again. They literally have gone up and down every other month! The majority of Lake Norman’s sales (72.4%) 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 within price range sales.

Higher-end home sales in Lake Norman

Properties above $1 million represented 7.1% of our total closed sales in January.  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 remain in a buyer’s market for a second month in a row with 7.8 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)

    • Waterfront sales in January represented 31.6% of Lake Norman’s total sales while comprising 34% of our active listings and 27.5% of our under contract listings.
    • The average price per square foot of our waterfront homes came in at $271,81 which actually is a new monthly high since the recession and up from last month’s $253.94, October’s $241.15, September’s $219.07 and August’s $237.77.  If this trend continues for several months then it will substantiate that while our number of sales are modest, prices are going up on the good properties that are selling. 
    • It took on average 105 days days for a waterfront home to sell and they sold for 94% of their listing price.
    • Overall, these numbers are sending us mixed messages given our strong price per square foot and days on market but with our current inventory/number of sales indicating our waterfront homes are in a buyer’s market. Interesting to watch in the next few months!

Lake Norman real estate home sales 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. ***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 one month in to 2018. As you can see, despite our lackluster January closings of 98, when you compare them to all prior January’s before last year we actually logged some very respectable sales.

Summary and My Insight

Good signs/news for 2018:

  • Our current number of homes Under Contract and Pending indicate we should have decent closed sales in February and March
  • While baby steps, there are signs that our waterfront home sales are reaching towards our prerecession highs
  • 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 and there are such concerns about the future pace of this increases that the stock market has reacted with dramatic volatility
  • 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.  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 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 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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