Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s September 2017 Market Report

September 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 awesome month, logging in an all time September record of 194 closed sales of single family homes! (See green and yellow chart below).
  • At 1525 closed sales, our first 9 months of 2017 exceeded all previous years in Lake Norman’s history, even exceeding 2005’s previous record high by 7%.
  • My excitement about our luxury market last month has been tempered slightly as we currently has 29 properties over $1 million under contract down from 42 last month.
  • For the second straight month waterfront homes are in a sellers’ market but there are some worrisome signs that this momentum might not be sustained so it will be important to watch this trend going forward.
  • Our trade-up price ranges from $600,000-$999,999 represented almost 1/4 of our sales and our current properties under contract again showing signs of stability after many years of struggling to recover.

In a nutshell, these numbers mean that our overall strong sales are no longer erratic but instead impressively consistent in beating prior year’s numbers month after month.  While there is no guarantee that this will continue long term, they are still tremendous accomplishments for our Lake Norman real estate market.  It looks like 2017 will be the single best year for home sales in Lake Norman’s history. But I am not going to celebrate just yet as I want to watch the waterfront and luxury niches carefully to see if they can finally regain their pre-recession levels.

Let’s take a closer look:

Lake Norman Housing Report September 2017

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • For the first time since the recession (and the second month in a row) waterfront homes are overall in a seller’s market. We currently have only 5.23 months of supply of active listings. That said, the impressive numbers from last month did not fully carry over to this month. All of the following numbers are honestly disappointing:
    • Waterfront sales in September represented 31% of Lake Norman’s total sales while comprising 36.3 % of our active listings.
    • The average price per square foot of our waterfront homes came in at $219.07 significantly down from last month’s 237.77, July’s $247.26, June’s $239.91 and May’s $259.33. (Yet, the average price per square foot of those under contract is $272.25).
    • It took on average 97 days days for a waterfront home to sell and they sold for 95% of the listing price.
    • We currently have 81 waterfront homes under contract comprising only 26.9% of Lake Norman’s total homes under contract.
  • 43 new construction homes closed in September 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, 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 115 new construction homes under contract in the MLS. The average sales price in September logged in at $405,725.  The months of supply of active listings based on September’s sales increased to 5.5 so barely in a seller’s market.
  • Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 1.5% of Lake Norman’s total September home sales with just 3 distressed closed sale for the entire month. 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.  Two of the three closed sales were homes in The Farms and one of the two distressed sales under contract is in The Point.
  • 42.8% of Lake Norman’s September’s single family home sales were under $400,000.
  • 60.9% of Lake Norman home sales in September 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 301.  We have 9.8% more properties under contract today than at the same time in 2016 and 44% more than October 6, 2015! Surely this will translate into some high numbers for the next several months.

A closer look at the chart:

  • The number of Active Listings today in Lake Norman is down 5% compared to last year’s at this time.  After peaking in June at 990 our new listings are starting to drop off as they typically do at this time of year. This drop combined with strong sales means that buyers must act quickly when an especially good property hits the MLS.  Today we have only 865 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings sits at 4.46 which puts us very much 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 24% 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 4%. 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 November/December.
  • Pending/Under Contract No Show sales are actually down 21%.  However, the average price of our pending sales is up a whopping 30%. These listings went under contract on average in 69 days which is 14% 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 November.
  • Lake Norman’s closed September home sales in our MLS as of today and as stated above, were 10% higher than last September’s. And, they are the highest/best September since I have been keeping the records starting in 2005. The average price was also up 13% compared to last year and our days on market was 6% longer (5 days) 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:

  • 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
  • October 6,2015: 209

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

  • $1,000 – $99,999: 0-
  • $100,000 – $199,999: 13
  • $200,000 – $299,999: 35-
  • $300,000 – $399,999: 35-

(These price ranges represented 42.8% of our September home sales compared to 47.3% last month)

  • $400,000 – $499,999:  34+
  • $500,000 – $599,999: 13-

(These price ranges represented 24.2% of our September sales compared to 22.5% last month)

  • $600,000 – $699,999: 21++
  • $700,000 – $799,999: 9–
  • $800,000 – $899,999: 6-
  • 900,000 – $999,999: 10+

(These price ranges represented 23.7% of September’s sales compared to last month’s 24.4% and July’s 17.8%)

  • $1,000,000 – $1,499,999: 11+
  • $1,500,000 – $1,999,999: 5+
  • $2 million+ : 2

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

I love creating this list because it truly highlights our specific strengths and weaknesses each month. In September, our stand out price ranges were the $400,000’s, $600,000’s, $900,000’s and $1 million – $1,999,999. The most interesting category of price ranges was our trade-up $600,000 – $999,999 which has clawed its way back up since the recession. We maintained the 24.5% of total sales logged in August but, instead of the $700,000’s and $800,000’s, in September it was the $600,000’s and $900,000’s.   While the majority of Lake Norman’s sales (67%) were still under $600,000, our trade-up price ranges are continuing to gain market share.

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, for the first time since the recession (and the second month in a row) waterfront homes are overall in a seller’s market. We currently have only 5.23 months of supply of active listings. That said, the impressive numbers from last month did not fully carry over to this month. All of the following numbers are honestly disappointing:

  • Waterfront sales in September represented 31% of Lake Norman’s total sales while comprising 36.3 % of our active listings.
  • The average price per square foot of our waterfront homes came in at $219.07 significantly down from last month’s 237.77, July’s $247.26, June’s $239.91 and May’s $259.33. (Yet, the average price per square foot of those under contract is $272.25).
  • It took on average 97 days days for a waterfront home to sell and they sold for 95% of the listing price.
  • We currently have 81 waterfront homes under contract comprising only 26.9% of Lake Norman’s total homes under contract.

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 2017

* 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 nine months of this year!  We went from a record-breaking high January to an almost record-breaking low in February to a HUGE March, a solid April, a HUGE May, an even HUGER June (Yes, I said
huger which isn’t a real word:-), a very strong July & August and then record-breaking September. Lake Norman’s overall 2017 real estate market is now 16.2% ahead of the first 9 months of 2016 and we logged the highest first 9 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. I can’t wait to fill in the remaining numbers in our 13th column.

Summary and My Insight

Good signs/news:

  • Our record-breaking September sales underscore the strength of our Lake Norman housing market in 2017.
  • 2017 year-to-date we are 16.2% ahead of the same period last year and the highest first 9 months of a year ever.
  • Our current number of homes Under Contract and Pending indicate we should have strong closed sales in October with no slowdown in sight!
  • Our 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.
  • Newer listing 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 remain more erratic than the lower price ranges.
  • Mortgage interest rates, while down a bit are hovering at about 4%.  There is much speculation as to where they are headed. Unemployment sits at 4.2%, 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.
  • 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 2nd 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 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!

 

OTHER ARTICLES of INTEREST

Lake Norman Relocation Resources

10 Things Lake Norman Waterfront Home Buyers Should Know

To receive all of my updates about Lake Norman Real Estate,
subscribe here
Standard

Your comments...