This past month of September will not be terribly memorable for our Lake Norman area real estate market nor for our local economic news. Our home sales continued to plod along however there are some signs that the worst may be behind us related to our overall local economy even though our housing market is still struggling:
- Iredell County’s unemployment rate dropped slightly to 11.3% according to the North Carolina Employment Security Commission. (It’s high was 13.8% in February).
- Mark Vitner, senior economist for Wells Fargo in Charlotte, predicts “The Charlotte region, including the Lake Norman area, will rebound faster than the nation as a whole from the economic downturn – although Charlotte area home prices will continue to drop until March 2011.”
So, exactly how did our Lake Norman housing market fare in September?
The total number of Lake Norman single family homes under contract (not yet closed) on September 30, 2010 increased 6% when compared to August and July’s numbers of 157 , and experienced a 2% decline from June’s 169 and a drop of 17% when compared to the 200 at at the end of May.
Let’s take a look at the details:
- Active Listings dropped 13% from a year ago. Based upon our September sales, we now have 17 months of inventory. Our goal of a truly balanced housing market of 6-8 months of supply is still out of reach.. To achieve these numbers given our current inventory levels we will need to sell about 160 homes per month! Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. However, it is very good news that our inventory is shrinking. Note that the average price of our active listings dropped 8.6% compared to August 2009. We continue to see a number of price reductions.
- Contingent Sales, which don’t account for a significant segment of our housing market, dropped 29%. Clearly, fewer sellers are willing to accept an offer contingent upon the sale of a buyer’s home due to the overall weak housing market.
- Conditional Sales increased 41 % this month when compared to September 2009 and were 10% above last month’s conditional sales. These are homes that just went under contract and still have financial and inspection conditions. They will represent closed sales in either late October or November and would seem to indicate that this October and November will meet or even exceed last years numbers and even our current month’s sales as well. A slight glimmer of hope.
- Our pending sales represented a 18% decrease from a year ago and are identical to last month. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of sales in the next few weeks. These numbers would indicate that our closed sales this month will be slightly below or equal to both last month and October 2009. It will depend on how many of the conditional sales mentioned above close this month.
- The number of closed sales dropped 11% from September 2009 and were just slightly down from last month. Every month I do my sales analysis on or about the 5th of the month thus allowing time for agents to input their end of month sales into our MLS database. However, we can count on a few late additions so my guess is our closed sales for September will be about 76 – 77 which is just slightly below last year.
Here is a breakdown by price-range of our September 2010 closed sales:
- $42,000 – $199,999: 11 ( Conditional & Pending = 22)
- $200,000 – $299,999: 18 (Conditional & Pending = 30)
- $300,000 – $399,999: 18 ( Conditional & Pending = 31) (51%)
- $400,000 – $499,999: 9 ( Conditional & Pending = 18)
- $500,000 – $599,999: 4 ( Conditional & Pending = 12) (69%)
- $600,000 – $699,999: 1 ( Conditional & Pending = 13)
- $700,000 – $799,999: 4 ( Conditional & Pending = 5)
- $800,000 – $899,999: 2 ( Conditional & Pending = 7)
- $900,000 – $999,999: 1 ( Conditional & Pending = 4) ($600,000 – $1million = 18%)
- $1,000,000 – $1,999,999: 3 ( Conditional & Pending = 19 WOW!)
- $2 million+ : 1 ( Conditional & Pending = 3) (total conditional, contingent and pending = 164)
65% of our Lake Norman home sales were under $400,000 compared to 57% last month. 83%were under $600,000. The $600,000 – $1 million price range slowed significantly. Each of the last few months we have seen a further increase in the market share of our lower price ranges. However, I decided to look at our Lake Norman properties currently under contract and there is a marked increase in the higher price ranges. I personally have noticed that sellers in the higher price ranges are finally getting sick of waiting and are making, in some cases, significant price reductions. This may help to boosts the $600,000+ sales.
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 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.
I love this chart because it puts our Lake Norman home sales numbers in the context of the past 6 years. For the past two years our September sales actually increased when compared to August but such was not the case this September. I do expect our 4th quarter 2010 to be similar to the 4th quarter of 2009 and stronger than what appears to be our bottom in 2008 and early 2009. However, these are still very weak numbers historically. 2010’s total Lake Norman single family home sales should just about match the totals of 2008 but fall far short of prior years.
Just as I wrote last month, due to our struggling US economy, low consumer confidence and excess inventory, I would encourage Lake Norman home buyers who have been sitting on the fence to consider this winter as an opportunity that may not exist once spring arrives and sellers regain their optimism that our market will improve.
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