A whopping 74% increase of closed sales this May compared to May 2011 puts an exclamation point on Lake Norman’s improving housing market in 2012! Not only was this best May since 2007 but it is also the highest number of sales in a single month since August of 2007!
Despite positive trends, even I didn’t predict numbers this high. Can we sustain this trend through the rest of 2012 and beyond? Hard to say but we are likely to see at least a typical seasonal slowdown in the summer. 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 May 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
Some significant additional interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised only 18.58 % of our closed sales in May compared to the US average of 26%. The price range of these distressed sales was $165,000 – $4,385,000. Our percentage of distressed active listings dropped to 7.1% from 8% .Our number of distressed properties remains very low which is very encouraging. We are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
- 32.7% of our closed sales were waterfront homes which is slightly lower than last month but about average.
- 53% of Lake Norman’s April home sales were under $400,000 compared to 43% last month.
- 70 % of our April sales were under $500,000 compared to 49% in April, 61% in March sales. Higher price ranges are selling at about the same rate while we saw a marked increase in sales in the $200,000 – $400,000’s.
- Our average prices were down all the way across the board. (See chart above). While this may seem bad, it indicates to me that our prices are bottoming out.
- Our average days a home is on market was down all the way across the board as well. This is very good news. Properties are selling more quickly.
- As of today, the number of active listings for all of Lake Norman totaled 990 so they are still trending upward but remain 17% below May 2011. To put this number in even greater context, back in June of 2008 we had 1789 active listings.
A closer look:
- The number of Active Listings in Lake Norman increased 3.7% from last month but are 17% lower than May 2011. While our number of active listings is still increasing, the rate of increase is shrinking. Our absorption rate/months of supply of active listings stands at 8.7. This is by far the lowest since the downturn!!!! Our shrinking inventory and rising sales have brought us so close to a balanced 6-8 months of supply in Lake Norman area (MLS area 13). But, with a seasonal slowdown of the number of monthly sales in the months ahead I expect this number to go up again. Still, it is amazing to see us reach this new low!
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home)which don’t account for a significant segment of our housing market, have actually been on an upswing. This could be because sellers are more willing to take a risk because more buyers have homes already under contract before they put in an offer. I currently have several contracts where the buyers’ properties are under contract and ready to close. Note the huge decline in the number of days on the market this year compared to May 2011: -62%.
- Conditional Sales increased for the fifth month in a row, this time by a 32%. This number is actually lower than last month’s which indicates that we will most likely experience a slowdown in July which is quite typical in the summer. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late June/July/August. Based upon these numbers our closed sales this month might equal last month’s and should be the best June since 2007 but it will be closer since we are up against the June of 201o when the housing rebate ended.
- Pending sales were equal to May 2011’s. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. Given that we had 101 closed sales last June we will most likely exceed 100 sales this month which is excellent.
- The number of closed home sales in Lake Norman in May were 74% higher than May 2011’s. Great numbers!
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- June 6, 2012: 235 ( not bad when put in context)
- May 7, 2012: 246
- April 1, 2012: 227
- March 1, 2012: 178
- February 1, 2012: 155
- January 1: 134 (the lowest ALL year)
- December 1: 147
- November: 169
- October: 193
- September: 183
- August: 193
- July: 178
- June: 199,
- May: 173
- April 195,
- March: 163
- February: 142
We are clearly seeing a marked upward trend after a lag at the end of 2011. This uptick in sales coupled with our low inventory bode well for the overall health of the Lake Norman housing market.
Here is a breakdown by price-range of our April 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $135,000 – $199,999: 9 (slightly lower)
- $200,000 – $299,999: 25 (twice as many as last month)
- $300,000 – $399,999: 27 (also twice as many as last month)
(These price ranges represented 54% of May sales compared to 42.8% of April sales!)
- 400,000 – $499,999: 19 (3 times last month’s 6)
- $500,000 – $599,999: 11 (equal to last month’s)
(These price ranges represented 26.5% compared to 21.4% last month)
- $600,000 – $699,999: 3 (compared to 11 last month!)
- $700,000 – $799,999: 4 (compared to 3 last month)
- $800,000 – $899,999: 1 (compared to 2 last month)
- 900,000 – $999,999: 2 (compared to 4 last month)
(Solds for $600,000 – $1mill = 8.8 % compared to 23.8% last month)
- $1,000,000 – $1,999,999: 10 (compared to 9 last month)
- $2 million+ : 2 (compared to 1 last month). ($4,385,000 sale of the foreclosure estate on Alexander Island)
(Solds $1million+ = 10.6% compared to 11.9 % last month)
8-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 have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009, 2010 and the totals in the prior calendar years. The columns may not add up but I do my best with what I have to work! I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Summary and My Insight
The Positives and the Negatives:
- Lake Norman home sales year-to-date are up 24.9% over 2011!!!
- Lake Norman’s inventory of homes for sale remains low.
- Number of properties currently under contracts indicate that our Lake Norman housing market will sustain our good closed sales numbers for the next several months.
- The number of distressed homes for sale remain a small percentage of our total inventory and sales.
- There are a lot of home buyers out looking around all of the Lake Norman area. Properly priced listings are selling more quickly and sometimes with multiple offers.
- We are seeing more and more new construction popping up (Not spec homes).
- Interest rates are at all time lows…
- National real estate news includes some price increases including a chart by S&P Case-Shiller which shows Charlotte with a .4 increase in sales prices in March and Zillow’s article” Home Values See Highest Monthly increase since 2006″ published on 5/25/12.
- The purchase by Donald Trump of The Point Golf and Tennis Club continues to get media attention and seems to have had a positive impact on sales in The Point.
- Sales prices remain low (in the US we are down to mid 2002 price levels) and I don’t see any signs of them going up. Rather, properties are selling once they are priced low enough to attract offers and then they may even get multiple offers.
- With a shrinking inventory of active listings, buyers have fewer options.
- Home loans, especially construction loans, are still a very challenging process, particularly underwriting and appraisals.
- Global economic turmoil and US economic uncertainty.
As I wrote for the past several months:
I am more convinced than ever that our Lake Norman housing market has hit its bottom in terms of annual sales volume. However, this has not translated to higher sales prices. Prices are low and buyers continue to be very picky; not willing to pay a higher price than past comparable sales.
The gossip among Realtors is how dramatically our activity has increased. Despite low inventories, the number of buyers out actively looking has increased substantially. Real estate firms are touting their sales increases and talk as if we are going to sustain these strong numbers. I am a bit more cautious. While the worst is most likely behind us, we have a long way to go and most expect that it will be a very slow recovery.
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) and floorplan. 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 at all time lows and prices low it is a good time to buy. With only 7%of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale to come along at an unrealistic price. If you insist on low-balling, at least have some comparable sales to justify your number. 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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