A good portion of the properties I have been showing to my Lake Norman homebuyers recently have been waterfront homes on the east side of Lake Norman. This is partially because recent foreclosures and short sales have made good waterfront properties more affordable for those who were previously unable to even consider a waterfront home. It is also because Lake Norman waterfront homebuyers who have been sitting on the sidelines are jumping in when they see a true bargain with good water.
If you have been reading this blog for a while you will know that I am a bit of a data geek. So, I decided that it would be valuable to take a look at the MLS statistics regarding our recent Lake Norman waterfront home sales when compared with past years. This chart represents our waterfront home sales from January 1, 2009 to November 30, 2009:
- The total number of waterfront homes sold in 2009 is identical to the same period in 2008.
- The average sales price of a waterfront home dropped 14% versus 2008
- The average price of a pending waterfront home sale is a whopping $1,770,900 and the conditional sales price average is $1,201,731!
- The average days the home was listed increased 52% versus 2008
- If we take an average of 14 sales per month, we have 33.6 months of supply of inventory of waterfront homes. If we use the highest month of 18 sales we would still have 26 months of active waterfront listings. This number is significantly higher than the accepted 6-8 months of inventory for a balanced housing market and is even higher than our overall months of supply of inventory for all of Lake Norman real estate.
Next, let’s look at our Lake Norman waterfront home sales over the past 5 years:
2005 = 478 @ $213.5 dollars per square foot
2006 = 377 @ $244 dollars per square foot
2007 = 307 @ $270 dollars per square foot
2008 = 165 @ 269 dollars per square foot
2009 = 154 + December or about 166 – 175 (based upon the number of pending and conditional sales we have right now) $214.4 dollars per square foot.
Since 2005 our sales have dropped 65% in volume. During this same period the average price of a waterfront home increased to a high of $270 in 2007 and dropped significantly this year back to the prices of 2005.
25 out of our 33 most recent sales (since October 1) were under $1 million. And, 24 of these sales were on the east side of Lake Norman in Mooresville and Cornelius. There were only 3 sales in Denver and 6 in Sherrills Ford. There were NO sales in area 13/1 which is all of the east side of Lake Norman north of Highway 150.
In summary, our 2009 waterfront homes sales are about equal to last year but the prices per square foot have dropped back to 2005 values. We still have at least 4 times as many active waterfront home listings as a balanced market. For the most part, our sales right now are “bargains”. However, the high prices of the pending and conditional sales indicate that the higher end luxury homes may be starting to move.
For the sake of those of you who might be out looking, it is important to note that there are really two types of waterfront listings right now: The first is the group of homes that have been sitting on the market for over a year and have been reduced to bargain prices due to foreclosures, short sales and sellers who understand our current market. There is also a large percentage of homes that are still over priced for our current market and the sellers are not as motivated to reduce their prices. You might see a home in the $900,000s that is not dissimilar from a home in the $700,000s. The only difference is that the higher priced home may be a seller that is comfortable waiting to get their price.
My best advice is to know the comparable sales and whether the seller’s motivation for selling. There are some great waterfront homes starting as low as the $600,000s!