While I wrote last month that the Lake Norman real estate market was on a bit of a roll, this month I can now say that it is down right strong. Not only did we exceed last month’s relatively strong numbers but our August 2011 Lake Norman home sales were the second highest month since our peak in 2007!
Based upon our relatively strong numbers of new contracts (Conditional, Active Due Diligence Pending sales) it looks as though this positive trend will continue into September and perhaps into fall.
Here are the August numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some additional interesting statistics for you:
- Only 16.8% of our closed sales were “distressed sales” ( Foreclosures (REOS), defaults, Short Sales) compared to 18.5% last month, 25% in June and 27% in May. This is extremely important because if we don’t have a new wave of foreclosures then our Lake Norman market truly is healing!
- 21% of our closed sales were waterfront homes down from 33% last month.
- 57% of our August sales were under $400,000.
A closer look:
- The number of Active Listings in Lake Norman remains well below last year’s and is continuing to drop. Our absorption rate/months of supply of active listings dropped to the lowest level since the recession: 10.5 months! For the first time since 2007 we are just shy of a goal of a truly balanced housing market of 6-8 months of supply in Lake Norman area (MLS area 13). This is truly a remarkable achievement given the weak national housing numbers and global economic problems. It is likely that we will see a slowing down in the fall and winter months but perhaps not as painful a slowdown as the nation as a whole.
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home)which don’t account for a significant segment of our housing market, remain fairly low most likely because sellers are unwilling to take on the risk of waiting for the buyer’s home to sell before closing.
- The combined total of Conditional Sales and our new “Due Diligence” category increased 23% this month when compared to August 2010. These are homes that just went under contract and still have financial and inspection conditions. They represent potential future closed sales most likely in late September/October. These are the numbers that give me the most encouragement as they indicate our current pace of Lake Norman home sales may be sustained through early fall at least. (Please note that I decided to separate Conditional from the new Active Due Diligence category because it has become increasing difficult to provide good insight into the average prices and days on market).
- Our Lake Norman Pending sales are also up 23% from August 2010. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. While we may not match this month’s 101 closed sales, all indications are that we will continue to outpace our 2010 numbers and may again post record monthly highs since 2007 in September and October.
- The number of closed home sales in Lake Norman were a whopping 29% above August 2010’s. One important note: The average price of homes sold were only 2% lower than last August 2010.
The total number of Lake Norman single family homes under contract (but not yet closed) on September 1, 2011 was 183, compared to August 1st’s 193, June 30th’s 178. May 31st’s 199, April’s 173 March 31st’s 195, February 28th’s 163 and January 31st’s 142. Last August we had only 157 so this month’s are 16.5% higher; another indication that the next few months will be stronger than 201o. More good news!
Here is a breakdown by price-range of our June 2011 closed sales in Lake Norman’s area 13- to 13-5:
- $45,000 – $199,999: 13
- $200,000 – $299,999: 30
- $300,000 – $399,999: 15
(These price ranges represented 57% of August’s sales compared to 45.7% of July ‘s total sales)
- 400,000 – $499,999: 13
- $500,000 – $599,999: 13
(These price ranges represented 25.7% compared to 29% last month)
- $600,000 – $699,999: 4
- $700,000 – $799,999: 2
- $800,000 – $899,999: 3
- 900,000 – $999,999: 1
(Solds for $600,000 – $1mill = 10% compared to 19% last month)
- $1,000,000 – $1,999,999: 4
- $2 million+ : 3
(Solds $1million+ = 7% compared to 6% last month)
7-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 2011 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.
Above is a snapshot of Lake Norman home sales numbers by month for the past 7 years. As you can see, our August sales were the best since 2007! As opposed to most of the courtry, our Lake Norman real estate market has had 3 good months in a row and I anticipate several more to come! This is the longest string of positive monthly sales numbers in quite some time.
So, what am I seeing as I am out selling?
- First and foremost, good properties that have been sitting for several years and have been reduced in price are selling, sometimes with multiple offers! My buyers who have been watching their own niche for years are seeing many of the properties selling and not much if anything coming on to replace them.
- With fewer distressed properties, the “screaming bargains” are few and far between. Buyers are now concentrating on getting a good price but for the most part not expecting huge price concessions
- Once a listing is reduced to an appropriate price it will most likely sell fairly quickly depending on the price-range.
- With construction loans nearly impossible to get, lots, especially waterfront, are still sitting.
- Prices are inching up in certain price niches particularly in communities like The Farms and The Point
- Our inventory of homes for sale is shrinking so there are fewer options for buyers.
In my opinion, overall our home prices may in fact have hit bottom. The ability to find more “screaming bargains” will depend on how many more distressed homes come on the market in the future. How much “shadow inventory” do we have in our Lake Norman area? Will we see more distressed properties coming on the market later this year or next year? The fact that distressed properties only accounted for 16.8% of August’s sale shows how this portion of the Lake Norman real estate market continues to shrink. My guess is that while they will continue to exist they will no longer dominate our market. My advice to Lake Norman home buyers at this point is to look for homes that are relative bargains and not wait for the screamingly low ones. Carpe Diem!
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