Just as I predicted, our Lake Norman home sales broke through 100 in June, thanks in good part to the June 30th deadline for the home-buyer tax credits. Keeping this in mind, there are reasons to be cautious when assessing our current Lake Norman housing market:
- The total number of Lake Norman single family homes under contract on June 30, 2010 dropped 15.5% to 169 when compared to the 200 at beginning of the month. This is the second month in a row when our total combined sales contracts dropped in double digits when compared to the prior month. This would leave me to conclude that our closed sales have peaked for this season and perhaps for the rest of 2010. This peak can most certainly be attributed to the home-buyers tax rebate program that initially expired on June 30th. While the deadline was extended by Congress to September 30th, this only helps currently active contracts that were opened by April 30th.
Let’s take a look at the details:
- Active Listings dropped 13% from a year ago. However, they were up 2% from last month. Based upon our June sales, we now have only 13.3 months of inventory. This is the lowest number I have calculated during the past two years of doing these sales analysis. However, this is not good enough to achieve a truly balanced housing market of 6-8 months of supply. To reach these numbers given our current inventory levels we will need to sell about 160 homes per month! While we are trending in a positive direction, we need to sustain higher sales numbers through the second half of 2010 all the while hoping that we don’t have too many new listings coming on the market. Of course, buyers would love to see new listings! Note that the average price of our active listings dropped 13%. We continue to see a number of price reductions.
- Contingent Sales declined. A 40% drop in these isn’t significant in itself but it does appear that sellers, whether banks or homeowners, are less willing to accept an offer when it is contingent upon a buyer’s home selling.
- Conditional Sales increased 52% this month compared to June 2009 after dropping to a 27% increase last month and compared to a whopping 149% two months ago. These are homes that just went under contract and still have financial and inspection conditions. The good news is that these are not sales related to the tax credit so we are seeing a modest continuation of our improved sales when compared to last year that are because buyers simply want to move to Lake Norman!
- Our pending sales represented a 2% increase over a year ago. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of future sales and help substantiate that we are on track to meet or exceed the July 2009 sales number of 91 but may NOT exceed the July 2008 sales numbers.
- The number of closed sales were 20% higher than June 2009.
Note that our average sales price increased by 20%. Like the past few months, we also saw increases in the average price of conditional and pending home prices. This does not mean our prices are increasing. Rather, it means that our higher priced listing sales are improving. Because of the nature of our Lake Norman housing market, we really can’t use the average sales price to determine if our prices are increasing or decreasing because our inventory ranges from under $100,000 to $9 million. Our average prices vary with the prices of the homes sold. We are seeing more luxury home sales which can skew our average prices substantially.
Here is a breakdown by price-range of our June 2010 closed sales:
- $42,000 – $199,999: 15
- $200,000 – $299,999: 16
- $300,000 – $399,999: 20
- $400,000 – $499,999: 13
- $500,000 – $599,999: 11
- $600,000 – $699,999: 5
- $700,000 – $799,999: 7
- $800,000 – $899,999: 4
- $900,000 – $999,999: 1
- $1,000,000 – $1,999,999: 7
- $2 million+ : 4
51% of our Lake Norman home sales were under $400,000 and 75% were under $600,000. But, we had THREE sales over $3,000,000!
6-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers 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 and 2010 and the totals in the prior calendar year. The columns may not add up but I do my best withwhat I have to work with!
I love this chart because it truly tells the whole story. While our sales trends are positive, you only need to take a look at the sales back in 2006 and 2007 to realize how far we have fallen.
As predicted last month, our June sales did exceed both 2009 and 2008. Yes, in sales volume, our market appears to have turned a corner and in this respect we probably hit bottom last winter.
Foreclosures, shortsales and other types of distressed properties plus first-time home-buyers are still a good portion of our market. But, relative bargains are also inspiring higher priced buyers to jump off of the fence. For the first time in several years I am seeing multiple offers or very fast sales of non-distressed sales. There is still a serious disparity between the prices of many of our closed sales when compared to similar active listings. But, I have noticed more sales at slightly higher prices than the prior foreclosure/shortsale lows.
One last note: 30-year fixed conforming loan rates are as low as 4.1%! Hopefully, these low rates will inspire more buyers to jump off the fence and into the lake!
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