Lake Norman’s real estate market remains robust after a lethargic winter and early spring. Following exceptionally strong closed home sales in June, we slowed a bit in July but are managing to keep up with 2013’s record breaking numbers.
Let’s take a look at the July 2014 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area real estate market:
* All data is from the Charlotte Regional Multiple Listing Service. **Please note that the MLS started using an entirely new program in March which did away with Area 13 so my numbers may vary slightly from the past but I have made it as close as possible.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REOS), defaults, Short Sales) represented only 8.4% of Lake Norman’s total home sales. We only had 12 distressed home sales in July. The average price for distressed single family home sales was $592,016. Distressed active listings comprise only 2.3% of our total inventory of Lake Norman homes sale. Clearly distressed sales no longer play a significant role in our Lake Norman real estate market and this is very good news!
- 26.8% of our July home sales were waterfront homes which is lower than our typical month. (Waterfront homes represent 40% of our active listings). The average sales price of a Lake Norman waterfront home in July was $869,536. Our average price per square foot, at $210.68 compared to 223.66 last month and our peak of $229 last summer. Waterfront homes just aren’t selling at the rates they were in past years. We have an 11.6 month supply so overall waterfront homes are very much a buyer’s market.
- 16 new construction homes closed in July 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 100%. Clearly there isn’t a lot if ANY wiggle room on prices of new homes. We currently have 53 new construction homes under contract in the MLS. The average sales price in July logged in at $473,782.
- 52.1% of Lake Norman’s June single family home sales were under $400,000. This is up quite a bit from last month.
- 61.2% of the entire Lake Norman home sales in July were under $500,000 up slightly from last month.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 261 were down slightly from last month’s 268. At 261 Lake Norman has just under July 2013’s 264 on this exact date. For the second time this year we are nipping at the heals of our strong 2013 sales numbers!
A closer look at the chart:
- The number of Active Listings in Lake Norman is 11% higher than last July’s. Our absorption rate/months of supply of active listings today is 7.7 up from 6.2 last month. Last May 2013, Lake Norman hit our post recession low of 5.9 months of suppy. Using the nationally defined goal of 6-8 months of supply for a balanced housing market we can safely say that our Lake Norman real estate market is balanced over all for the second month in a row. I will continue to watch our number of active listings since they continue to creep up while our closed sales are creeping down.
- Under Contract Show (conditional sales), were up 3% compared to this same 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 August/September. This number would indicate that our closed sales will remain strong this summer and that we might even beat 2013’s sales again in one of the next few months.
- Pending/Under Contract No Show sales are down again, this time by only 7% making this the 11th month in a row of declines. 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. Based upon this I predict that we will most likely not exceed 2013 closed sales numbers this month but we will come close.
- Lake Norman’s closed home sales in as of today and as stated above, were compared to last year’s. Please note that my annual sales chart has 151 closed sales in July 2013 but under our new MLS Matrix program they show us having 142. The average sales price was slightly lower but the average days on the market were down an impressive 27%. The average house in Lake Norman sold in 84 days.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- 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
Here is a breakdown by price-range of our July 2014 closed sales in Lake Norman
- $17,500 – $99,999: 3
- $100,000 – $199,999: 13+
- $200,000 – $299,999: 29+
- $300,000 – $399,999 329-
(These price ranges represented 52.1% of our July home sales.)
- $400,000 – $499,999: 14- – –
- $500,000 – $599,999: 17 –
(These price ranges represented 21.8% compared to 32.2% )
- $600,000 – $699,999: 9-
- $700,000 – $799,999: 10
- $800,000 – $899,999: 5-
- 900,000 – $999,999: 1-
(These price ranges represented 17.6 compared to 21% last month)
- $1,000,000 – $1,499,999: 5-
- $1,500,000 – $1,999,999: 4+
- $2 million+ : 2+
(#Solds $1 million+ = 7.7% compared to 6.4% last month, 6.1% in May, 7.6% in April, 8.75% in March, 4.3% in February, 6% in January, 9.5 % in December, 4.5% in November, 3.1% in October, 5.7% in September, 4.7% in August, 11.2% in July, 10.4% in June 2013)
The most improved price ranges in July were our very lowest, the $100,000’s and $200,000’s and the very highest over $1,500,ooo.
Higher-end home sales in Lake Norman
Mecurial and unpredictable comes to mind when trying to describe our luxury housing market. We really didn’t see any real improvement in June but we did have more high-end closed sales in July. There is truly no real trend established yet!
Lake Norman’s Waterfront Housing Market
As goes our higher end sales so goes our waterfront home sales. We currently have 440 waterfront homes actively listed for sale. With 38 closed sales of waterfront homes in June that means Lake Norman currently has 11.6 months of inventory of waterfront homes for sale which puts this niche very much in a buyer’s market. I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman but I do think there are some signs of sustained improvement so hopefully we will keep this up. Folks are gobbling up waterfront teardowns and 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.
10-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.
Thanks to our strong June sales, Lake Norman’s year-to-date home sales are only 3.7% below 2013’s! The national sales are also trending below 2013’s so it will be interesting to see their July numbers and whether they were as strong has Lake Norman’s.
Summary and My Insight
- July’s 142+ closed sales are the second highest Lake Norman single family home sales since June 2007.
- Given the high numbers of newly under contract, sales the next few months should continue this positive trend after our slight dip in July which I predicted last month.
- The average number of days Lake Norman properties took to sell was down 27%.
- Our Lake Norman home values are stable and slowly 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. In addition, the lack of distressed sales has led to higher overall average prices. The “bargains” are all but gone. What I really want to see is measurable increases in Lake Norman home sales in ALL price ranges.
- There are pockets of “hot” home sales in the greater Lake Norman area, notably the off-water popular and moderately priced communities in Huntersville, Cornelius and to a lesser extent Mooresville where inventory is very low and multiple offers are not uncommon.
- The number of distressed homes for sale are so low they are truly irrelevant and will not play much of a role in our Lake Norman 2014 sales. Prices have increased enough overall that 83% of homeowners actually have equity in their homes again. Nationally, 23% of homeowners are underwater.
- New construction is definitely back. While we only sold 16 new homes last month through the MLS, we have 53 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. New housing communities as well as custom and smaller groups of spec homes are popping up all over Lake Norman. As I noted above, new construction homes are selling on average for 100% of their listing price.
- Charlotte’s 2013 impressive home price gains have been linked to a significant number of investors taking advantage of low prices in “middle class neighborhoods” and turning them into rentals. They therefore have “inflated” prices. Since Lake Norman didn’t enjoy this surge, our sales are more reflective of a truly stable and slowly improving real estate market based on owner-occupied rather than investors and we are already standing on our own.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Homeowners who went through short sales/foreclosures several years ago are now re-entering the market.
- Thanks to rising prices, there are an increasing number of homeowners with increased equity in their homes. In the US housing equity increased 30% this past 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 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 opening in Huntersville! This was one of their key signs of positive economic futures!
- Lake Norman’s inventory of active listings continues to creep up despite slowing sales. As our seasonal slowdow approaches if our inventory doesn’t adjust accordingly we will be facing a buyers’ market again this fall/winter
- Our trade-up price ranges slowed last month and have yet to gain true momentum unlike the lower price ranges.
- Waterfront home sales continue to be weaker than tradional patterns in Lake Norman.
- Lake Norman’s luxury home sales are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices are stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- Interest rates are expected to continue to rise in 2014 with some economists predicting they will reach 5% or higher by the end of the year.
- Tightened credit, tougher loan standards and increasing interest rates are expected to impede home sales in 2014
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- hear buyers and agents complaining that our inventory of homes for sale is “stale”, especially higher prices on the water. Even new listings are many times homes that were on the market off and on for several years. As has always been the case here in Lake Norman, most buyers want new or move-in condition homes. 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
- 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.
- 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 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 a great time to buy. With less than 3% of Lake Norman’s current listings being “distressed sales” don’t expect a “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. To the contrary, it usually serves to offend the sellers and gets the negotiations off on the wrong foot.
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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