After a great ride, November applied the brakes on our Lake Norman real estate market. While we exceeded our closed sales for November 2013 we only had the third best November since 2005 after logging record sales monthly since June. Let’s take a closer look:
Lake Norman Market Report November 2014
* All data is from the Charlotte Regional Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 6.5% of Lake Norman’s total home sales. We had just 6 distressed sales in November with an average price of $190,734. (The highest closed sale price was only $349,000!). Distressed active listings comprise only 3.2% 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 27.17% of our November home sales while they currently comprise 39% of our active listings. The average sales price of a waterfront home in November was $743,233 and the average price per square foot was $212.84. (Up from last month’s 203.21 but down from our prior peak of $229 last summer). It took on average 95 days for a waterfront home to sell and they sold for 96% of the listing price in November. Overall, waterfront homes just aren’t selling at the rates they were in past years. We currently have 13.5 months of supply of active listings which puts waterfront homes in a buyer’s market.
- 16 new construction homes closed in November 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 99%. Clearly there isn’t a lot of wiggle room on prices of new homes. We currently have 652 new construction homes under contract in the MLS. The average sales price in November logged in at $451,487. The bulk of our new construction market is in our lower to middle price ranges.
- 55.43% of Lake Norman’s November single family home sales were under $400,000. This is slightly higher than last month’s.
- 72.83% of Lake Norman home sales in November were under $500,000 which is higher than last month’s and just about the highest I have seen since creating these reports.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 204 is down substantially from last month’s but they are still 3.5% higher than last year at this time. While October was exceptional, our Lake Norman housing market slowed down fairly rapidly in the past month and is now more in line with typical seasonal trends.
A closer look at the chart:
- The number of Active Listings in Lake Norman is just about equal to last Novembers’.Our absorption rate/months of supply of active listings today is 9.3 compared to 6.0 last month. Using the nationally defined goal of 6-8 months of supply for a balanced housing market we unfortunately have swung back to a buyers’ market after 5 months of being in a balanced housing market. Within specific price ranges we are definitely in a buyer’s market but in a few we are actually in a seller’s market. (See below)
- 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 December/January. This number would indicate that our closed sales might actually pick up a bit next month. There is NO doubt that Lake Norman, unlike the rest of the U.S., WILL exceed our 2013’s sales in 2014. Note that the average price is actually down slightly for both Under Contract Show and our Pending sales
- Pending/Under Contract No Show sales were down again slightly after 2 strong months. 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. I feel that we will have slightly higher closed sales this month than last December and end the year looking very good overall.
- Lake Norman’s closed home sales in as of today and as stated above, were up just 2% after a whopping 52% last month. They dropped 44% from last month’s sales! The average sales price was 7% lower and the average days on market were down 2%. The average house in Lake Norman sold in about 112 days. As you can see, the Lake Norman real estate market put on its brakes in November after some truly dynamic months.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- January 6, 2013: 184
- December 6, 2012: 197
Here is a breakdown by price-range of our November 2014 closed sales in Lake Norman
- $42,001 – $99,999: 2-
- $100,000 – $199,999: 9–
- $200,000 – $299,999: 25=
- $300,000 – $399,999 15–
(These price ranges represented 55.4% of our November home sales which is up slightly.)
- $400,000 – $499,999: 16-
- $500,000 – $599,999: 7-
(These price ranges represented 25% which is higher than last month’s )
- $600,000 – $699,999: 6+
- $700,000 – $799,999: 3–
- $800,000 – $899,999: 3–
- 900,000 – $999,999: 1–
(These price ranges represented 14.1% which is down slightly from last month’s)
- $1,000,000 – $1,499,999: 4-
- $1,500,000 – $1,999,999: 0–
- $2 million+ : 1=
(#Solds $1 million+ = 5.4% compared to 8.2% last month)
The strongest relative price ranges in November in all of Lake Norman were the $200,000’s and the $600,000’s.
Higher-end home sales in Lake Norman
Mercurial and unpredictable continues to come to mind when trying to describe our luxury housing market. August was such an improvement over the past years’. We even had two sales at or above $3,000,000. In September our numbers were back down with only 2 sales above $2 million and in October we had a nice increase in the $1,000,000 – $1,999,999 but we only had one sale over $2 million. In November they sank back down fairly dramatically in all price ranges above $700,000. I REALLY want to see more consistency in this niche!
Lake Norman’s Waterfront Housing Market
This month only 4 of our 25 waterfront home sales were above $1 million compared to 13 last month. Our waterfront home sales in the trade-up price ranges slowed as well. 10 sales were under $600,000 and 11 were $600 – $$900,000’s. We currently have 338 waterfront homes actively listed for sale on Lake Norman. With 25 closed sales of waterfront homes in November this means Lake Norman currently has 13.5 months of inventory of waterfront homes for sale which puts this niche in a strong buyer’s market. I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman. Folks are gobbling up waterfront tear-downs. 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. On my tiny street there are 3 waterfront homes under construction…the first since we moved here in 2005. 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 next spring.
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 sustained higher sales all summer, Lake Norman’s year-to-date 2014 home sales are now 6.5% HIGHER than 2013’s! The national sales were up in September but are trending below 2013’s so it will be interesting to see their year-end numbers and whether they are as strong as Lake Norman’s.
Summary and My Insight
- November brought our Lake Norman real estate market back in line with typical seasonal sales trends. However, while the drop in momentum was pretty significant, we are still trending slightly better than the same time last year.
- What I loved seeing this year is 7 strong months of closed sales (before this last month’s slowdown) rather than one great month like May 2013 and then a major drop off in the fall.
- Our new contracts (Pending and Under Contract Show) while down from last month are still higher than last November’s and bode well for the rest of 2014.
- The average number of days on the market of our most recent contracts was down 25%. Properties that are selling right now are getting acceptable offers relatively quickly.
- Lake Norman’s inventory of active listings continues to drop at about the same rate as last year. As our seasonal slow down approaches it is important that our number of active listings drops accordingly. That said, buyers are complaining about the lack of new listings!
- 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. The lack of distressed sales has also contributed to higher overall average prices. The “bargains” are all but gone. What I really want to see is consistent measurable increases in Lake Norman home sales in ALL price ranges.
- There are still pockets of “hot” home sales in the greater Lake Norman area, notably the popular off-water and moderately priced communities in Huntersville, Cornelius and Mooresville where inventory is very low and multiple offers are not uncommon. This is also true of new construction subdivisions like Lennar’s phase of The Farms in Mooresville.
- The number of distressed homes for sale are so low they are truly irrelevant and have not played any perceptible role in our Lake Norman 2014 sales.
- New construction is definitely back. While we only sold 16 new homes last month through the MLS, we have 65 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. I have been showing in several new housing communities and they are booming! Custom and smaller groups of spec homes are popping up all over Lake Norman.
- The national economy AND North Carolina are experiencing solid job growth which should translate to housing growth in 2015 and beyond.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Long term mortgage rates just hit their lowest level since May 2013. What is really amazing is that Jumbo loan interest rates are currently LOWER than conforming loan’s.
- Homeowners who went through short sales/foreclosures several years ago are now re-entering the market.
- 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.
- Consumer Confidence is up.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- 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 that opened on November 4th in Huntersville. This was one of their key signs of positive economic futures!
- Finally, housing forecasts for 2015 are almost all optimistic with some predicting significant gains and others more moderate but all that I have read expect gains in 2015. New construction is expected to experience a resurgence of about 25% and many are also predicting a return of first-time home buyers which have been at historic lows for several years.
- Lake Norman’s real estate market experienced a significant slowdown in November.
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges unlike many areas in the country where they are seeing consistent price increases.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- Interest rates are expected to increase in 2015 and reach as high as 6% by 2016.
- Tightened credit, tougher loan standards and increasing interest rates have made it harder for buyers this year.
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of re-sale listings 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. Or, they are buying new construction or lots and building, especially on the water.
- 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 only 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 still a great time to buy. With less than 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price. Low-balling, except on over-priced 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!
OTHER ARTICLES of INTEREST