Lake Norman homes sales in July were oh so close to matching July 2007’s but still were the best July since 2007 . While our closed sales of 142 fell short of last month’s and our record setting high in May, we still logged in some very impressive numbers. At 142 single-family home sales we had the 3rd best month in the Lake Norman real estate market since July 2007 . Once the late comers input their sales into the MLS my guess is that we will have closed 145 contracts last month.
Let’s take a closer look at the numbers to glean some insight into the short term future and exactly where the Lake Norman housing market stands right now.
Here are the July 2013 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
* Note that the Charlotte Regional Multiple Listing Service created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replaced the Contingent, Conditional and Pending categories. Contingent Sales are now joined with Conditional sales in my reports.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REOS), defaults, Short Sales) comprised 11.3% of Lake Norman’s total home sales which is actually up from last month’s 6.9% and May’s 10.6% but below the 14% in April, 20.4% in March, 16.9% in February and January’s 29%. We only had 16 distressed home sales in July. The average price for distressed single family home sales was $288,933 so clearly the very lowest of Lake Norman’s price ranges. Distressed active listings comprise only 3.6% of our total inventory of Lake Norman homes for sale! According to a recent article on Trulia the “normal” delinquency and foreclosure rate for the US is 5.25%.
- 30 %, of our closed sales were waterfront homes which is equal to last month’s. The average sales price of Lake Norman waterfront homes in July was $874,988 which was down slightly from last month’s $990,693 but higher when compared to May’s $778,045. The average price per square foot was $229 which was identical to last months but up from $210 in May and higher than the $202 per square foot in February and $199 per square foot in January. There was an interesting dynamic that can partially explain these numbers. We had 13 sales of waterfront homes over $1 million for the second month in a row.
- 14 new construction homes sold which was 2 less than last month’. The average listing price vs sales price was 101%! Clearly there isn’t a lot if ANY wiggle room on prices of new homes. The average sales price as $417,964. It is important to note that many of the new construction homes you will see driving around the lake are custom homes so will not be included in our Multiple Listing Service numbers.
- 47.9% of Lake Norman’s July home sales were under $400,000…this number is actually slightly lower than last month’s.
- 59.8% of our July home sales were under $500,000 which is down from 65.2% last month and significantly lower than February’s 81.7%, 81% in January, 74 % in December, 75% in November, and 67% in October. While our lower price ranges are still dominating our Lake Norman housing market clearly the higher price ranges are picking up some steam.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 164 was the third month in a row of decline after April’s record high of 319 . It looks like our sales for the next few months will continue to be relatively strong but the Lake Norman housing market has definitely slowed down a bit more each month since May. This is an important trend to watch! Did we peak in May or will we pick up again in late summer?
A closer look at the chart:
- The number of Active Listings in Lake Norman increased 2% compared to last July’s. Our absorption rate/months of supply of active listings today is 6.9 after May’s post recession low of 5.9. We are still within our goal of a balanced 6-8 months of supply in the Lake Norman area (MLS area 13). To put this in perspective of our post recession Lake Norman housing market, in January of 2009 we had 52.5 months of inventory. The average number of days on the market dropped by 4%.
- Conditional Sales, which are now called Under Contract Show, increased for the 18th month in a row when compared to the same month of the prior year, this time by a healthy 21%. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late August/September. Based upon these numbers we might see a slight upswing in September/October since our newest sales contracts are stronger than our soon-to-close pending sales contracts.
- Pending/Under Contract No Show sales dipped to a modest 9% higher than last July’s compared to last month’s healthy 34% higher than June 2012’s. These are the contracts that are past their inspections/ due diligent period and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Between this lower number but the improvement in Under Contract Show/Conditionals it appears our sales may pick up, as I said above, in September/October. I am pretty darn confident that we will again exceed last August’s sales of 121 but with three months of trending downward it looks like Lake Norman home sales in May might be our peak for 2013.
- The number of closed home sales in Lake Norman in May as of today remain strong at 22% higher than last July’s and the average sales price was up 12%. Obviously, the high number of sales over $1 million contributed to the average price increase.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- January 6, 2013: 184
- December 6, 2012: 197
- November 7, 2012: 214
- October 8, 2012: 218
- September 6, 2012: 206
- August 6, 2012: 228
- July 6, 2012: 234
- June 6, 2012: 235
- May 7, 2012: 246
- April 1, 2012: 227
- March 1, 2012: 178
- February 1, 2012: 155
- January 1: 134 (the lowest ALL year)
Here is a breakdown by price-range of our April 2013 closed sales in Lake Norman’s area 13-1 to 13-5:
- $40,000 – $199,999: 13
- $200,000 – $299,999: 35+
- $300,000 – $399,999: 20
(These price ranges represented 47.9% of our July sales.)
- 400,000 – $499,999: 17
- $500,000 – $599,999: 18+
(These price ranges represented 24.6%)
- $600,000 – $699,999: 5
- $700,000 – $799,999: 12 (compared to 4 last month)
- $800,000 – $899,999: 7 (compared to 3 last month)
- 900,000 – $999,999: 2
(Solds for $600,000 – $999,999 = 18.3)
- $1,000,000 – $1,499,999: 8 (compared to 5 last month)
- $1,500,000 – $1,999,999: 4 (compared to 6 last month)
- $2 million+ : 1 (compared to 4 last month)
(Solds $1 million+ = 11.2% compared to 10.4% last month, 4.4 % in May and 7.5% in April)
The most improved price ranges in June were the $200,000’s, the $700,000’s + $800,000’s and the luxury $1 million – $1,999,999. All of the other price ranges logged in lower numbers/percentages than last month.
Higher-end home sales in Lake Norman
This is the second month in a row that we have seen notable sales in the $1 million + price ranges. I have read that the luxury housing market nationwide is improving as well. It will be interesting to watch this niche going forward.
9-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.
As you can see in our Lake Norman sales by month and year chart above, Lake Norman’s home sales for the first seven months of 2013 exceeded 2012’s by 27% and were the best since 2007.
Summary and My Insight
- The Lake Norman real estate market, while trending downward slightly, is still posting some very strong numbers historically. It looks like we may see slightly lower closed sales this month but then experience a slight increase in Sept/October. I have absolutely no doubt that Lake Norman’s housing market hit bottom and is well on its recovery path.
- Lake Norman has been enjoying consistently higher closed sales for well over a year. Prices have not only stabilized but are actually increasing in some areas. However, I can not yet say that our prices have increased across the board. Rather, 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.
- Lake Norman homes are selling quicker (see the Days on Market above) and at higher list-to-sale percentages. With low inventory demand is higher and I would expect all price ranges to slowly improve.
- The number of distressed homes for sale are so low they are almost irrelevant in 2013 and the numbers are still dropping.
- New construction is definitely back. Not only did we sell 14 new homes last month but we have 128 new homes listed for sale in our MLS. New housing communities are popping up now as well as custom and smaller groups of spec homes. There is a new Tru Homes subdivision down Isle of Pines in the $300-$500,000 range and Lennar just put up a sign that they will be developing the last phase of The Farms by Woodland Heights Elementary. A great example of the quantity of new construction is in The Farms in Mooresville where a number of builders are buying up lots and building custom and some spec homes as well. Interesting note: New construction homes are selling for 101% of the listing price!
- Lake Norman’s inventory of homes for sale is at a stable 6.9-month supply. This means overall Lake Norman is pretty balanced between a buyer’s and seller’s market. Again, this depends a lot on location and price.
- Interest rates have stabilized a bit after shooting up last month. There is still concern over potential increases which may, in fact, serve as a motivator for buyers who thought they could wait to buy but now feel they should to jump off the fence before it is too late.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- According to the May Case-Shiller report, Charlotte area home prices increased 7.1% in May. Nationwide home prices have returned to spring 2004 values.
- Finding the perfect home has become more difficult with so fewer listings to chose from and the fact that the older inventory has been picked over.
- Mortgage rates have jumped up more than 1% from their lows earlier this year. While this may motivate qualified homebuyers to jump off the fence it will negatively impact buyers as to what they can afford and even if they can now afford to buy.
- I still have some concerns, but not as strongly as earlier this year, about Lake Norman sellers and listing agents being overly optimistic not only when they initially price their properties but also during negotiations. With the increase in showings many sellers are expecting higher offers so are not as willing to work with good but lower offers by qualified buyers.
- I also have concerns for Lake Norman home buyers. A good number are still in the old mind set that they have plenty of time to consider new listings and that they should start really low. Right now good properties are selling quickly, sometimes with multiple offers. It is critical to know comparable sales activity in your price range and act quickly if/when a good listing comes on the market.
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. 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 rising and prices low but rising it is a great time to buy. With less than 4% of Lake Norman’s current listings being “distressed sales” don’t expect the “bargain” to come along at an unrealistic price. Low-balling, except on distressed properties, really isn’t a great strategy nor will it result in a lower price. Get it in your head that the Lake Norman housing market is the strongest it has been in years and that prices are going up. 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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