lake norman real estate

Lake Norman Real Estate’s March 2018 Market Report

We are now entering our most active months for our Lake Norman area’s housing sales. After a dip in January and a jump up in February our Lake Norman real estate market once again took a hit in March when compared to March 2017’s sales. However, to be fair, this was expected due to March 2017’s exceptionally strong month so while 134 closed sales are disappointing they are certainly respectable when compared to previous month’s since the recession.

Here are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • March’s closed sales were 29% lower than March 2017 but 17.5% higher than last month’s.
  • Our inventory of active listings remains alarmingly low; currently 3% below last year’s which were also historically low.  It is hard to quantify but there is no doubt that low inventory does have a negative impact on Lake Norman’s home sales.
  • After a strong February, as I predicted, we didn’t come close to meeting March 2017’s huge, record-breaking 188 closed sales.
  • What the heck is going on with our waterfront market? Yikes!  (See below)
  • Our trade-up ($600,000 – $999,000) and luxury price ranges were once again weak after a slight uptick last month. The only thing consistent about our higher price ranges is their constant roller coaster ride of ups and downs.

Let’s take a closer look:

Lake Norman Real Estate Home Sales Analysis

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • Waterfront homes fell further back in to a buyer’s market in March with a now 9.7 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in March represented only 21.6% of Lake Norman’s total sales (down from 22.3% last month and 31.6% in January) while comprising 34.6% of our active listings and 28% of our under contract listings.
    • The average price per square foot of our waterfront homes increased to $244.03 which is an improvement over last month’s $221.09 but below January’s $271.81, December’s $253.94, and slightly higher than November’s $241.15.   
    • It took on average 112 days for a waterfront home to sell and they sold for 95% of their listing price.
    • Overall, these numbers are quite weak across the board. Our waterfront homes are now unequivocally in a buyer’s market and their small percentage of our total Lake Norman sales, low inventory and prices are very concerning.  We will watch this trend closely!
  • 45 new construction homes closed in March through our MLS but this does not reflect a 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 100% so they are selling for their asking prices! 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 97 new construction homes under contract in the MLS. The average sales price in March logged in at $344,857.  The months of supply of active listings based on March’s sales is 4.9 which is, not surprisingly,  a seller’s market.
  •  There were NO closed distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in March. We have 8 under contract and only 1 distressed active listing as of today. One interesting note: the average price of distressed properties is $614,644 so these properties are not in our lower price ranges. Clearly, distressed sales continue to play an insignificant role in our Lake Norman real estate market. 
  • 57.5% of Lake Norman’s March single family home sales were under $400,000.
  • 73.9% of Lake Norman home sales in March were under $500,000.
  • An indication that our market may face some challenges meeting last spring’s very strong sales is the fact that our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 334 is below last year’s for the second month in a row.  (see below). We have 4.8% fewer properties under contract today than at the same time in 2017 but 12.5% more than April 6, 2016. We are up against 2017’s record-breaking sales and it looks like we may be facing a rocky path.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down 3% compared to last year’s at this time.  As expected, they are up slightly from last month’s but at this time of year we should see more new listings than we have so far. 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 814 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings is 6.07. Technically this means we are overall in a balanced market favoring neither buyers nor sellers.Keep 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 1% lower than last year’s.
  • Under Contract Show (conditional) sales are equal to this time last year. The average price of our new contracts is up 15% and the days on market is down 11%.  This indicates that slightly more higher priced homes are under contract and that they are selling more quickly which is good news. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent relatively modest future closed sales in May/June.
  • Pending/Under Contract No Show sales are down a whopping 17% for the second straight month.  The average price of our pending sales is up 25% and these listings have been on the market 10% longer than last year’s. These numbers indicate that in the next month or so we will struggle to match last year’s record-breaking pace.  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 May.
  • Lake Norman’s closed March home sales in our MLS as of today and as stated above, were 29% LOWER than last March’s. While a discouraging number, as I have already mentioned, last March has a particularly high month for closed sales. That said, 134 closed sales is also only the 5th best March since 2005.  The average price was down 1% and it took on average 2 more days to sell a home in March 2017 vs 2017.

The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:

  • April 8, 2018: 334
  • March 8, 2018: 280
  • 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

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

  • $1,000 – $99,999: 3+
  • $100,000 – $199,999: 10
  • $200,000 – $299,999: 22+
  • $300,000 – $399,999: 42++

        (These price ranges represented 57.4% of our March home sales compared to 50.1% last month)

  • $400,000 – $499,999:  22
  • $500,000 – $599,999: 8-

       (These price ranges represented 22.3% of our March sales compared to 25.9% last month)

  • $600,000 – $699,999: 9+
  • $700,000 – $799,999: 5
  • $800,000 – $899,999: 1-
  • 900,000 – $999,999: 2

       (These price ranges represented 12.7% of our March sales, 14.3% of February sales, 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: 4–
  • $1,500,000 – $1,999,999: 5++
  • $2 million+ : 1

       (#Solds $1 million+ = 7.4% of our March sales, 8.9% of February sales, 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 March, our stand out price ranges were the $200,000’s, $300,000’s, 600,000’s, and the $1,500,000 -$1,999,999. It is interesting to look at how each group of prices did compared to last month. The most significant drop was in the $500,000’s, $800,000’s and $1.000,000 – $1,499,999’s again reflecting the volatility in our trade-up and luxury price ranges. They literally have gone up and down every other month! The majority of Lake Norman’s sales (79.7%) 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 only 7.4% of our total closed sales in March.  We did see some strong sales in the $1.5 millions but overall 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 fell further back in to a buyer’s market in March with 9.7 months of supply of active listings.  (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in March represented only 21.6% of Lake Norman’s total sales (down from 22.3% last month and 31.6% in January) while comprising 34.6% of our active listings and 28% of our under contract listings.
  • The average price per square foot of our waterfront homes increased to $244.03 which is an improvement over last month’s $221.09 but below January’s $271.81, December’s $253.94, and slightly higher than November’s $241.15.   
  • It took on average 112 days for a waterfront home to sell and they sold for 95% of their listing price.
  • Overall, these numbers are weak across the board. Our waterfront homes are now unequivocally in a buyer’s market and their small percentage of our total Lake Norman sales, low inventory and prices are very concerning.  We will watch this trend closely!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 3 months in to 2018.  Our combined total of 345 is 6.2% lower than the first quarter of last year but higher than most March’s back to the beginning of the recession. Take a look at the huge numbers we are up again in the rest of 2017.  This is going to be a tough year!

Summary and My Insight

Good signs/news for 2018:

  • With three months in the books we are actually doing better than most prior years including last year.
  • 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:

  • Mortgage interest rates are higher and and there are concerns about the future pace of these increases and potential inflation based on announcements by the Federal Reserve.
  • Supply and demand are mismatched. Inventory levels are still very low and could be a deterrent to sales if they don’t increase substantially as is typical in the spring.
  • The new tax bill according to a recent NY Times article is “Messy” and is predicted to negatively impact our country’s housing market. “Overall Moody’s Analytics estimates that the tax law will reduce home transaction prices by 4%, a number that reflects both the direct impact of tax changes and higher interest rates caused by larger deficits.”
  • The big picture: “Even as the housing market is chugging forward, hamstrung by low inventory…NAR thinks 2018 will be challenging. The group revised its 2018 forecast to show that sales will be flat compared to 2017.”
  • Locally, our waterfront homes posted weak numbers again this month which has given me reason to feel uncertain about where they are headed.
  • Our trade-up and luxury home sales continue to be erratic unlike the lower price ranges.
  • 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 really good 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.  I will be writing my 1st quarter 2018 price range analysis in a few weeks.  In the meantime, See my price range analysis for the 4th quarter of 2017.   

Final thoughts: 

As I wrote last month:

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.  At the same time, 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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