Lake Norman’s October 2012 residential real estate sales number should makes it ten months in a row that we have exceeded all prior months’ sales since 2007. However, as of today, we are tied with last year’s 88 total sales. As always a few more agents will be late in recording their sales. When all the numbers are for October we should have recorded at least 90 or more. So, yes, we will make it 10 but it will be a squeaker! However, because October 2011’s sales were unusually high beating that number still supports my belief that we hit bottom in 2011 here in the Lake Norman housing market and have had fairly robust sales consistently in 2012. Yes, we are clearly seeing our typical seasonal slowdown but the fact that October sales will most likely equal September’s, at this point it still looks like our Lake Norman real estate market has moved into sustained positive territory.
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 October 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
* Note that the Charlotte Regional Multiple Listing Service has created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replace the Contingent, Conditional and Pending categories. Contingent Sales are now joined with Conditional sales in my reports.
Some significant additional interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised only 13.6% of our totals, down from 19.3% last month. The average price for distressed sales was $473,583 Distressed active listings currently make up only 6.2% of our inventory of Lake Norman homes for sale. Clearly we are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted. While buyers are looking for bargains they simply don’t exist in the numbers we experienced in the past several years.
- 26% of our closed sales were waterfront homes which was down slightly from 27% last month. (There were only 3 distressed waterfront sales out of 23).
- We had 12 new construction homes sold which represents 13.6%! We actually had as many brand new homes sold as distressed sales…what a turn around for Lake Norman!
- 49% of Lake Norman’s October home sales were under $400,000 compared to 53% last month.
- 67% of our October home sales were under $500,000 compared to 70% last month, 66% in August, 60% in July, 72 % in June, 70% in May, 49% in April, 61% in March sales. Clearly our lower price ranges are still dominating our Lake Norman housing market.
- Our “Under Contract Show” AND “Under Contract No show”/Pending numbers were up substantially from last October. (See chart above). This serves as further support that Lake Norman’s housing market is on the mend and that our late fall/winter sales will remain robust. Another very positive sign is that our average days homes were on market before selling were down again in every category but one. Properties are definitely selling more quickly.
- As of today, the number of active listings for all of Lake Norman total 834 down from 876 last month, 917 last month and 10% lower than October 2011. The number of homes for sale in Lake Norman has been lower than 2011 every month this year. Ask any home buyer or Realtor and you will hear complaints about how few homes are on the market. 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 dropped 5% from last month’s and are 10% lower than September 2011’s. Our absorption rate/months of supply of active listings now stands at 9.5. While we are once again above the goal of a balanced 6-8 months of supply in Lake Norman area (MLS area 13) we are not nearly as high as the past few years!
- Conditional Sales, which are now called Under Contract Show, increased for the ninth month in a row, this time by a healthy 37% compared to last year. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late November/December. Based upon these numbers our sales in November and December should be stronger than 2011.
- Pending/Under Contract No Show sales were 23% higher than October 2011’s. These are the contracts that are past inspections and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Given that we had only 75 closed sales last November I am pretty confident that we will exceed this number. It looks like we will close out 2012 with at least 20% higher sales than 2011 and 12 months of increases in a row!
- The number of closed home sales in Lake Norman in October 2012 were just about equal to September’s and October 2011’s.
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- November 7, 2012: 214 (Good, solid number considering we are heading into our slowest months of the year).
- October 8, 2012: 218
- September 6, 2012: 206
- August 6, 2012: 228
- July 6, 2012: 234
- June 6, 2012: 235
- 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
Here is a breakdown by price-range of our October 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $40,500 – $199,999: 11
- $200,000 – $299,999: 17
- $300,000 – $399,999: 15
(These price ranges represented 48.9% of October’s sales.)
- 400,000 – $499,999: 16
- $500,000 – $599,999: 9
(These price ranges represented 28.4% of our sales)
- $600,000 – $699,999: 8
- $700,000 – $799,999: 2
- $800,000 – $899,999: 0
- 900,000 – $999,999: 2
(Solds for $600,000 – $1mill = 13.6 % )
- $1,000,000 – $1,499,999: 5
- $1,500,000 – $1,999,999: 2
- $2 million+ : 1
(Solds $1million+ = 9% which is double last month’s 4.5%)
The most improved price range was the $1,000,000 – $1,499,999.
Higher-end home sales in Lake Norman
Sales in the $700,000- $999,000 range continued to be extremely slow all over Lake Norman as they had been for most of 2012. In my opinion the good waterfront bargains in the $600,000s peaked two years ago and in the $700,000-$900,000 last summer. At the same time, there has been a significant spike in activity in properties $700,000+ in the past 6 weeks. Of our 214 homes currently under contract, 32 are over $700,000 and 11 are $1 million-$1.5 million .
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
- Lake Norman is experiencing consistently improved closed sales as well as stabilizing average prices and lower days on the market.
- Lake Norman home sales year-to-date are up 20.6% over 2011!!!
- Lake Norman’s inventory of homes for sale remains low.
- The number of properties currently under contract indicates that our Lake Norman housing market will sustain our strong closed sales numbers for the next several months.
- The number of distressed homes for sale has dropped to 6.2% of our overall inventory…clearly no longer playing a significant role in our housing market.
- New construction is back! Not only did we sell 12 new homes last month but as I drive and cycle around I am amazed at how many new construction homes are breaking ground.
- Serious home buyers are out looking around all of the Lake Norman area. Properly priced listings in very good condition are selling more quickly and sometimes with multiple offers even in our $1 million+ price ranges.
- Interest rates remain low.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Positive national housing news this month was pervasive. Almost every economist and pundit has now declared that the national housing market is improving and even seeing small price increases: In the Wall Street Journal, “ The housing market overcame a listless economy this summer, and several data points on Wednesday (September 19th) show it is finally beginning a long climb out of a deep hole”. Inman News: “Economists bullish on housing recovery“, CNN Money: “Economists: Housing recovery finally here”.
- Sales prices, while improving, remain historically low
- Our mid to higher-end property sales are still inconsistent and relatively weak despite some recent activity.
- With a shrinking inventory of active listings, buyers have fewer options. There aren’t that many “good” homes on the market so buyers are watching the new listings and jumping on most of the good ones if they are priced properly. So, Lake Norman has a lot of “leftovers” on the market that have been reduced a number of times and have more negatives including being dated. are in less desirable locations or not having good water.
- Home loans, especially jumbo and construction loans, are still a very challenging process, particularly underwriting and appraisals.
- Global economic turmoil and US economic uncertainty.
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 near all time lows and prices low it is a good time to buy. With less than 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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