Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s October 2017 Market Report

October numbers are out! Here are what I feel are the biggest takeaways from last month’s Lake Norman real estate sales numbers:

  • We had another strong albeit not record-breaking month, logging in 167 closed sales of single family homes. (See green and yellow chart below).
  • While our numbers are good compared to the same month last year, there is no doubt that our overall housing market has slowed considerably with lower sales than the past 5 months.
  • At 1695 closed sales, our first 10 months of 2017 exceeded all previous years in Lake Norman’s history, even exceeding 2005’s previous record high by 6.2%.
  • What a freaky month when we look at price ranges.  A whopping 79% of our sales were under $600,000.  Then, seemingly out of nowhere, we had 7 sales OVER $2 million!
  • Our trade-up price ranges from $600,000-$999,999 simply disappeared after last month’s strong showing. So much for stability.
  • Waterfront homes fell back into a buyer’s market after two pretty strong months. Ups and downs and more ups and downs.

In a nutshell, these numbers mean that our overall strong sales in 2017 have been impressively consistent in beating prior year’s numbers month after month.  While there is no guarantee that this will continue long term, 2017 has really been a remarkable year for our Lake Norman real estate market. 2017 will be the single best year for home sales in Lake Norman’s history. That said, we still need to see consistent strength in our waterfront, trade-up and luxury niches for them to regain their pre-recession levels.

Let’s take a closer look:

Lake Norman real estate sales analysis October 2017

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • After 2 months in a  seller’s market, our waterfront homes are back in a buyer’s market with 6.6 months of supply of active listings.
    • Waterfront sales in October represented only 26.3% of Lake Norman’s total sales while comprising 35.2 % of our active listings and only 27.7% of our under contract listings.
    • The average price per square foot of our waterfront homes came in at $241.15 significantly up from last month’s $219.07 and, August’s $237.77 but it fell short of July’s $247.26,and May’s $259.33. 
    • It took on average 126 days days for a waterfront home to sell and they sold for 96% of the listing price.
  • 33 new construction homes closed in October 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, buyers are willing to pay a premium for a new home. (That said, don’t forget to ask for all those great upgrades!) We currently have 108 new construction homes under contract in the MLS. The average sales price in October logged in at $434,167.  The months of supply of active listings based on October’s sales increased to 7.6  so now squarely in a buyer’s market.
  •  There were NO closed distressed sales” (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman’s total in October.  This is a first since before the recession! Distressed active listings currently comprise less than 1% of Lake Norman’s current total inventory of single family homes for sales. Distressed sales continue to play an insignificant role in our Lake Norman real estate market. One interesting note: The current inventory of distressed homes in Lake Norman are almost entirely in our trade-up and luxury price ranges.
  • 49.7% of Lake Norman’s October’s single family home sales were under $400,000.
  • 68.9% of Lake Norman home sales in October were under $500,000.
  • An indication that our strong market will continue relative to the time of year is provided by our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 282.  (see below). We have 2.5% more properties under contract today than at the same time in 2016 and 27% more than October 6, 2015. While more modest than prior months, this should translate into some solid sales numbers for the next several months.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down 2% compared to last year’s at this time.  After peaking in June at 990 our new listings have consistently decreased each month. This drop combined with strong sales means that buyers in hot price ranges and locations should act quickly when an especially good property hits the MLS.  Today we have only 828 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings sits at 4.96 which means we are still overall in a seller’s market. Keep in mind, however, within specific price ranges there are swings from a buyer’s market to a balanced to a seller’s market.
  • Under Contract Show (conditional) sales are up an impressive 16% versus this time last year. The average price of our new contracts is about the same as last year and the days on market actually increased by 6%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent strong future closed sales most likely in December/January.
  • Pending/Under Contract No Show sales are actually down a staggering 26%.  However, the average price of our pending sales is up 18%. These listings went under contract on average in 77 days which is 13% faster than last year.  Coupled with our strong Under Contract Show numbers, these numbers indicate that for the next few months we should continue to post some strong sales compared to the same months last year and previous years.  Pending sales are contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales this month or early December.
  • Lake Norman’s closed October home sales in our MLS as of today and as stated above, were 22% higher than last October’s. And, they are tied for the second best October since I have been keeping the records starting in 2005. The average price was also up 14% compared to last year and our days on market was 1% longer (1 day) than last year’s.

The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:

  • November 6, 2017: 282
  • October 6, 2017: 301
  • September 6, 2017: 346
  • August 6, 2017: 364
  • July 6 2017: 350
  • June 6, 2017: 370
  • May 6, 2017: 391
  • April 6, 2017: 351
  • March 6, 2017: 295
  • February 6, 2017: 227
  • January 6, 2017: 183
  • December 6, 2016: 237
  • November 6, 2016: 275
  • October 6, 2016: 274
  • September 6, 2016: 288
  • August 6, 2016: 325
  • July 6. 2016: 313
  • June 6, 2016 344
  • May 6, 2016: 340
  • April 6, 2016: 297
  • March 6, 2016: 234
  • February 6, 2016: 207
  • January 6, 2015: 176
  • December 6, 2015: 202
  • November 6, 2015: 222

Here is a breakdown by price-range of our October 2017 closed sales in Lake Norman

  • $1,000 – $99,999: 1
  • $100,000 – $199,999: 12
  • $200,000 – $299,999: 25-
  • $300,000 – $399,999: 45++

(These price ranges represented 49.7% of our October home sales compared to 42.8% last month)

  • $400,000 – $499,999:  32
  • $500,000 – $599,999: 17+

(These price ranges represented 29.3% of our October sales compared to 24.2% last month)

  • $600,000 – $699,999: 10–
  • $700,000 – $799,999: 4-
  • $800,000 – $899,999: 5
  • 900,000 – $999,999: 3–

(These price ranges represented 13.2% of October’s sales compared to last month’s 23.7 and August’s 24.4%)

  • $1,000,000 – $1,499,999: 4—
  • $1,500,000 – $1,999,999: 2–
  • $2 million+ : 7+++

(#Solds $1 million+ = 7.8% of October’s sales compared to 9.3% in September, 6.3% of August’s sales,10.6% of July’s and 6.2% in June)

I love creating this list by price because it truly highlights our specific strengths and weaknesses each month. In October, our stand out price ranges were the $300,000’s, $500,000’s and the $2 million+. Now this is quite a variety of price ranges!  We nearly completely lost our trade-up and luxury market price ranges ($600,000 – $1999,999) but had a whopping 7 properties close that were priced over $2 million! While the huge majority of Lake Norman’s sales (79%) were still under $600,000, our very highest priced homes did remarkably well.  As I have said so many times, with our Lake Norman real estate market you really need to know specifics about your price niche because there is such disparity in price range sales.

Higher-end home sales in Lake Norman

Properties above $1 million represented 9.3% of our total closed sales in September.  And, at 29 under contract and pending sales, I think we can maintain this level but overall I am a bit disappointed after we had what I thought was finally a rebirth of our luxury housing market.  While much improved, we have farther to go.

Lake Norman’s Waterfront Homes

As I wrote above, after 2 months in a  seller’s market, our waterfront homes are back in a buyer’s market with 6.6 months of supply of active listings.

  • Waterfront sales in October represented only 26.3% of Lake Norman’s total sales while comprising 35.2 % of our active listings and only 27.7% of our under contract listings.
  • The average price per square foot of our waterfront homes came in at $241.15 significantly up from last month’s $219.07 and, August’s $237.77 but it fell short of July’s $247.26,and May’s $259.33. 
  • It took on average 126 days days for a waterfront home to sell and they sold for 96% of the listing price.

As this market evolves post recession, prices have gone up somewhat but have not fully recovered.  Almost all of my waterfront buyers have had to increase their price range when they realize how much better the options are when they do so. Or,  I have had some higher-end waterfront buyers turn to off water properties when they can’t find something desirable in their price range. New listings with good water are selling more quickly than in the past, (especially in Cornelius), while the rest are languishing.  It is important for potential waterfront buyers to understand that there are fewer good options in the lower and trade-up price ranges so watch for new listings and act quickly.  In the past month or two I have noticed a new trend: dated homes that are on great lots with exceptional water are selling within two weeks.  Waterfront buyers seem to be more willing now to do major remodels or even tear down million dollar homes if the lots and locations are special. The lowest priced listings are mostly at the end of coves, can’t have docks or are in less desirable locations and they are what negatively impact the overall waterfront numbers.  

13-Year Comparison of Lake Norman Home Sales By Month

Lake Norman home sales by month since 2005

* Please note that all of my numbers are for single family homes in what used to be referred to as “Area 13 – Lake Norman. 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.

What a fascinating look at our highs and lows, especially the first ten months of this year.  We had 5 record-breaking months, 4 strong months and one abysmal month of February. Lake Norman’s overall 2017 real estate market is now 17% ahead of the first 10 months of 2016 and we logged the highest first 10 months of home sales since I began this chart back in 2005. Note that we ended 2016 with over double the total sales of 2008 and 2009.

Summary and My Insight

Good signs/news:

  • Our strong October sales underscore the strength of our overall Lake Norman housing market in 2017.
  • 2017 year-to-date we are 17% ahead of the same period last year and the highest first 10 months of a year ever.
  • Our current number of homes Under Contract and Pending indicate we should have decent closed sales in November
  • Our very high-end waterfront/luxury markets are showing some hopefully signs of life for the first time in years.
  • 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. Interesting that they are in higher price ranges.
  • Sellers in lower price ranges are making money!  I have had 3 listings in the past few months where my sellers (formally my buyers) made nice profits on their homes.  It is important to note that in every case they spent a great deal of money staging their homes with new carpet, refinished or new hardwood floors in main living areas, fresh paint in the popular grey and white tones and spruced up landscaping and curb appeal.  2 of the 3 painted their old wood kitchen cabinets white and they looked wonderful. All sold for slightly over asking with multiple offers.
  • New construction is definitely back in a consistent way. 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.
  • New listings in the lower price ranges that are in good condition and in desirable locations are selling with multiple offers within days of hitting the MLS.
  • Move-in condition, updated listings in the trade-up price ranges and homes on exceptional waterfront lots are selling quickly
  • Forbes ranks North Carolina second on best states for business list.
  • “We will continue to see folks and businesses moving here,” according to Mark Vitner, senior economist at Wells Fargo.

Challenges/Weaknesses:

  • Inventory levels are still relatively low and dropping.
  • Our trade-up and luxury home sales Under Contract numbers continue to be erratic unlike the lower price ranges.
  • Mortgage interest rates, while down a bit are hovering at about 4%.  This is actually good news.  However, there is much speculation as to where they are headed. Unemployment sits at 4.1%, the stock market is setting records on a regular basis and experts expect the Federal Reserve to raise their rates one more time this year. Beyond this, economists can’t seem to agree on much of anything else. Where our interest rates will be in 12 months is pure speculation due to so may variables.
  • Initial proposals in the US budget would limit or take away much of the mortgage interest deductions which would negatively impact our country’s housing market according to the National Association of Realtors and the National Association of Home Builders.
  • 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 except in lower price ranges where there simply isn’t enough inventory.
  • Strict loan standards implemented during the recession are still making it more difficult for buyers to qualify despite some easing and modifications.  Here is another big unknown related to our current administration.  There has been discussion about paring back on the Dodd-Frank Act. Some think removing these regulations will ease the mortgage loan process, especially for first-time buyers.
  • Finding the perfect home can be challenging. 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 for some price ranges and locations.  Don’t procrastinate when considering a new listing because they are selling quickly!
  • 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. See my price range analysis for the 3rd quarter of 2017. 

Final thoughts: 

My family moved to Lake Norman from California in 2005 seeking a better quality of life and a lower cost of living.  I have watched our area grow immensely over the past 12+ years. There is no doubt that Lake Norman is still a very appealing destination for folks from all over the country. We now can compete with many trendy cities throughout the country with our amazing number of new restaurants, breweries and entertainment.  But, with the passing of time, our pre-recession “new” homes are now a bit dated and will be needing new HVAC sysems, water heaters and roofs. With a complete halt to new construction during the recession years we are now lacking the number and type of homes that appeal to many of today’s buyers.  For this reason new construction and remodeled homes are selling more quickly than ever.  It is more of a challenge for our “dated” homes and subdivisions where open floor plans are rare and kitchens and bathrooms are in less appealing woods and materials.  The result has been the willingness of sellers to do updating before listing and buyers, especially waterfront, are more willing to do remodeling after they purchase IF they feel they got a good “deal”. Today, the bottom line comes down to price, location, condition, updates and proximity to desired amenities.

Buyers today in the lower price ranges should be prepared to act fast when a new listing that has been updated comes on the market. Or, if you want a more affordable option in any price range, be prepared to be more flexible.  This means a willingness to do your own updating, and, if possible, be more flexible about locations based upon our limited inventory.  I just represented a buyer who won the bidding war by using what is referred to as an “escalation clause” where we stated that we would offer $1000 higher than their best offer up to $5000. In multiple offer situations, be prepared to go over the listing price.  If you really love the home, be aggressive! My Mantra as always: Don’t focus just on the price but also on the future marketability of the property. A bargain that has incurable issues that will make it difficult to sell in the future really isn’t a bargain at all. Be smart!  

Sellers should watch a lot of HGTV and, if possible, be prepared to do painting, new flooring, painting kitchen cabinets white when feasible and staging to attract buyers.  As I wrote above, I just sold several homes with multiple offers where in one case the seller tripled his investment in staging and preparing his home for the market and all three made money. Buyers can be reluctant to buy a home knowing they will need to replace a roof, the AC and heating etc. in the first few years they are living there so, if possible, put on that new roof, replace the HVAC units while you are updating.  ALWAYS offer home warranty plans to buyers!

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