Wow is right! Our Lake Norman’s real estate market which has been impressive since the year began just logged in double digit increases in not just closed sales but in new contracts and pending sales as well! We beat last May’s closed sales by 17%, last month’s closed sales by 24.8% and nearly matched May 2013’s record breaking sales of 165. We also beat May 2005’s closed sales. Once the stragglers log in I predict we will also exceed May 2007’s and perhaps match May 2013’s 165. Our year-to-date 2015 closed single family home sales are 19.6% higher than 2014’s. On top of these impressive numbers, take a look at what’s on the horizon. Our total number of properties currently under contract exceed the past two June 6th’s and are close to our record May 6th’s of 2013. Lake Norman’s housing market got crazy busy (my technical term for it) right after the holidays and unlike previous years has been consistently strong every month so far in 2015. Plus, our new contracts indicate that this trend will continue for at least another month or two. Let’s take a closer look:
Lake Norman Market Report May 2015
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 6.2 % of Lake Norman’s total May home sales. We had just 10 distressed sales with an average price of $196,207. (The highest closed sale price was only $427,000). Distressed active listings currently comprise only 1.96% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes were 23% of our May home sales while they currently comprise 40.8% of our active listings. The average sales price of a waterfront home in May was $919,656 and the average price per square foot was $238.91 It took on average 113 days for a waterfront home to sell and they sold for 96% of the listing price. These numbers are all better than prior months except for the number of closed sales. So, the waterfront homes that are selling are selling more quickly and for higher prices. While, overall, waterfront homes sales still aren’t selling at the rates they were pre-recession, they are improving. We currently have 10.6 months of supply of active listings so overall our waterfront homes remain in a buyer’s market.
- 22 new construction homes closed in May 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 of wiggle room on prices of new homes! We currently have 70 new construction homes under contract in the MLS. The average sales price in May logged in at $366,573. The bulk of our new construction market in the MLS is still in our lower to price ranges.
- 53.4% of Lake Norman’s May single family home sales were under $400,000 which was a bit higher than last month’s.
- 67% of Lake Norman home sales in May were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 304 is down slightly from last month’s but is higher that the past two June 6th’s. Our new contracts indicate our Lake Norman housing market has some serious momentum which is going to carry forward for at least two more months.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is 8% lower than last year’s. Our absorption rate/months of supply of active listings is down to 6.0 which puts us overall in a balanced housing market. Within specific price ranges, however, there are swings from a buyer’s market to balanced to a seller’s market.
- Under Contract Show (conditional sales), are up 16% versus this 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 June/July. This number would indicate that our closed sales should well exceed last June’s. After a bit of a drop off in January, it looks like Lake Norman’s housing market has performed at it’s most consistently strong pace since the recession despite the lack of a good number of fresh new listings. Note that the days on the market for closed sales is down a whopping 17%. If you read my last blog post you will know that a lot of our new listings are selling VERY quickly and at higher prices. I feel that we have two different markets right now in Lake Norman. There are new listings that are priced right that are selling in just a matter of days and then there are the older listings and high-end luxury estates that are still struggling.
- Pending/Under Contract No Show sales are up 17% and these listings went under contract in only 92 days. These are the contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. We are up against a huge June 2014 when we closed 177 listings but our pending and under contract numbers seem to indicate we will match those numbers. We’ll see!
- Lake Norman’s closed home sales in as of today and as stated above, were 17% higher than last year’s! (Don’t forget that this number will go up a bit as slower agents log in their sales.) This also makes it the best second best May since 2006. The average sales price was actually 4% lower than last May’s and the average days on market was down 17%.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- June 6, 2015: 304
- May 6, 2015: 313
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- September 6, 2014: 272
- 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
Here is a breakdown by price-range of our May 2014 closed sales in Lake Norman
- $34,900 – $99,999: 6+
- $100,000 – $199,999: 16
- $200,000 – $299,999: 33++
- $300,000 – $399,999 31+
(These price ranges represented 53.4% of our May home sales which is up slightly from last month’s.)
- $400,000 – $499,999: 22
- $500,000 – $599,999: 16++
(These price ranges represented 23.6% which is about equal to last month’s )
- $600,000 – $699,999: 11
- $700,000 – $799,999: 9+
- $800,000 – $899,999: 1-
- 900,000 – $999,999: 5+
(These price ranges represented 16.1% which is about equal to last month’s )
- $1,000,000 – $1,499,999: 7
- $1,500,000 – $1,999,999: 1
- $2 million+ : 3+
(#Solds $1 million+ = 6.8% compared to last month’s 7.0%)
The stand out price ranges in May in all of Lake Norman were the $200,000’s, $500,000’s, the $700,000’s and the $900,000’s.
Higher-end home sales in Lake Norman
So far in 2015 our closed home sales above $1 million in the Lake Norman area have been lackluster. That said, there are currently 28 properties listed over $1 million that are under contract and 41 properties between $700,000 -$995,000 under contract compared to last month’s 29. It looks like our trade-up price ranges have heated up significantly but our $1 million+ still aren’t selling as they should.
Lake Norman’s Waterfront Housing Market
Our waterfront housing market is still overall in a buyer’s market. As of today we have 79 waterfront properties under contract which is just equal to last month’s. I have been showing waterfronts in all price ranges and I am noticing quite a bit of activity especially on new listings. With the inventory so low buyers may be realizing that prices are going up and that they better act before they are priced out of reach again. We currently have 395 waterfront homes actively listed for sale on Lake Norman. With 37 closed sales of waterfront homes in May this means Lake Norman currently has 10.7 months of inventory of waterfront homes for sale so this niche remains overall in a buyer’s market but within certain price ranges and with new listings it is getting quite heated.
In the meantime, new construction on the water is everywhere. Folks are gobbling up waterfront tear-downs and now even considering older homes that need renovations. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of this low period as it is hard to predict what will come later this spring.
11-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 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. ***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.
I love this chart of our sales by month since 2005 as it really gives us a good sense of where we are today and where we were over the past 11 years. In 2009 we had a total of only 187 sales in the first 4 months compared to this year’s 419. Notice the crazy high sales in 2005! We are out performing 2014 handily so it will be very interesting to watch as 2015 continues after such a strong start. Will we be able to reach last year’s strong 4th quarter numbers?
Summary and My Insight
- Lake Norman’s inventory of active listings remains low although it is getting closer to last year’s numbers as sellers realize this may be the time for them to sell after waiting through the recession. Hopefully our inventory will remain low which will help balance our market.
- 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.
- New construction is definitely back. 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.
- Waterfront tear-downs and lots are selling. More buyers are willing to build or do major renovations if they can get “good” waterfront lots.
- New listings that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Economists say that continued housing improvement depends on fundamentals like job growth, rising incomes and low vacancy rates all of which the greater Lake Norman and Charlotte area are experiencing.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Long term mortgage remain lower than early predictions. Jumbo loan interest rates are still LOWER than conforming loan’s.
- I have personally experienced a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman since the early January.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 now than in the past 5 years.
- Lake Norman has a fair number of “stale” listing that we really need to sell so that our inventory is fresh and our overall days on market drop even lower.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales are still struggling.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges. At the same time, according to economists, home prices in the entire US are expected to rise about 4.5%.
- 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.
- Where are interest rates headed?
- Strict loan standards are still making it more difficult of buyers to qualify despite some easing and modifications.
- 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 very quickly. Watching the “hot sheet” is once again a part of the buying process. Don’t procrastinate when considering a new listing because they are selling quickly!
- 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 buyer is to focus on location, neighborhoods and lifestyles that best suit you and/or your family and friends. With bargains gone and sales up now is the time to act quickly when you find a home that suits you. If you are looking in a “HOT” neighborhood and price range be prepared to make an offer or you just might loose out. These are new times so make sure you know what is happening right now in your market niche! 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 still a great time to buy. With less than 3% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.
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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