December 2011 home sales in Lake Norman continued the downward trend started in November. After relatively strong sales since June, our Lake Norman housing market slowed considerably in the last two months of 2011. At 60 closed sales, Lake Norman single family home sales were down 20% compared to last month’s 75.
It is important to note that these numbers are only as good as the agents who report them. Expect an adjustment in our 60 sales in December upward by the end of the month since it takes some Realtors several weeks to actually input their sales into our MLS. I create these reports early in the month while the information is still very fresh so always pad the sales upward just a bit.
Here are the December numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some significant additional interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 36,7% of our closed sales in December which was nearly identical to the 36% last month compared to 19.8% in October, 10% in September, 16.8 in August, 18.5% in July, 25% in June and 27% in May. Our active buyers right now are clearly folks looking for bargains! The good news is that only 10.9 % of our active listings are distressed.
- 33% of our closed sales were waterfront homes up from 19% last month, 28% in October and 38% in September.
- 56.7% of our December sales were under were under $400 and 81.6% were under $600,000. Clearly our lower priced homes are still driving the market.
- On January 1 our active listings for all of Lake Norman were 752, the lowest number since I started these reports in 2007. To put this number in context, back in June of 2008 we had 1789 active listings. Today our inventory is a bit higher at 774. We should see an increase of new listings as we do every spring.
A closer look:
- The number of Active Listings in Lake Norman dropped another 14% from last month and 26% from December 2010. Our absorption rate/months of supply of active listings stands at 12.5%. Our shrinking inventory is helping but at this lower pace of sales we are still almost twice as high as a balanced 6-8 months of supply in Lake Norman area (MLS area 13). With only 10.9% of Lake Norman’s current listings being “distressed sales”, the “shadow inventory” hasn’t impacted our market significantly. At this pace, our market will remain at a rocky bottom of sorts with a continuation of the erratic ups and downs in 2012.
- 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 extremely low most likely because sellers are unwilling or unable to take on the risk of waiting for the buyer’s home to sell before closing.
- Conditional Sales actually increased 11% this month when compared to December 2010 but were 12% lower than last month’s. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late January/February. It looks like our dip in sales will continue well into the new year but not worsen.
- Pending sales were identical to December 2010 and dropped only slightly from last month. 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 you are reading in the news about the national increase in pending sales here in Lake Norman our pending sales are actually down. As has been the case, the Lake Norman housing market does not mirror the national markets.
- The number of closed home sales in Lake Norman dropped a substantial 29% compared to December 2010′s and were 20% lower than last month. It is important to remember that we had a particularly strong November and December 2010 and our drop in sales these past two months is actually more in line with our typical seasonal slow down. That said, this December’s closed sales of 60 were the second lowest December since the recession. (See the annual chart below). Yet another sign that our Lake Norman housing market is continuing its erratic nature.
Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- January 1: 134 (the lowest ALL year)
- December 1: 147
- November: 169
- October: 193
- September: 183
- August: 193
- July: 178
- June: 199,
- May: 173
- April 195,
- March: 163
- February: 142
With only 134 properties under contract in all of Lake Norman, we are at the lowest level of sales activity in all of 2011. We started 2010 with a whimper, then the market picked up, and now we have closed out the year with a whimper as well. Unpredictable? Yes. Yet our low inventory bodes well for the overall health of the Lake Norman housing market.
Here is a breakdown by price-range of our December 2011 closed sales in Lake Norman’s area 13-1 to 13-5:
- $67,000 – $199,999: 16
- $200,000 – $299,999: 9
- $300,000 – $399,999: 9
(These price ranges represented 56.7% of December’s sales )
- 400,000 – $499,999: 8
- $500,000 – $599,999: 2
(These price ranges represented 16.6% compared to 19.4% last month)
- $600,000 – $699,999: 5
- $700,000 – $799,999: 5
- $800,000 – $899,999: 2
- 900,000 – $999,999: 0
(Solds for $600,000 – $1mill = 20% compared to 9.7% last month, 16% in October)
- $1,000,000 – $1,999,999: 4 (The highest sale in November was only $1.375 million)
- $2 million+ : 0
(Solds $1million+ = 6.6% )
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.
Summary and My Insight
The Good News and the Bad:
Very Good:
- Inventory is way down
- Number of distressed homes for sale remains at about 10%
- We are finally seeing some new construction popping up (Not spec homes)
- Interest rates are at all time lows
- Unemployment rates are dropping locally and nationally
Bad:
- Monthly sales are still trending down since November. The erratic nature of our Lake Norman real estate market continues with no end in sight
- 41.7 % of our Lake Norman sales were under $300,000!
- Distressed sales comprise a larger percentage of our sales than our inventory. Buyers are still looking for bargains!
- Our highest closed sale last month was $1.375 million. Our luxury home market seems almost non-existent with only 6 sales over $800,000.
- With a shrinking inventory of active listings, buyers have fewer options. With fewer “screaming bargains” will buyers sit back a bit this winter or will they buy as they did over the summer? The national news reports about a potential onslaught of foreclosures may keep buyers from taking advantage of our low prices right now.
- With construction loans nearly impossible to get, lots, especially waterfront, are still sitting
I still believe that, overall, our home prices have stabilized. I’m not seeing, for instance, the extremely low prices of waterfront home sales with good water that I did two years ago. The future of our Lake Norman real estate market still depends primarily on these two things:
1. 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? I showed a home priced slightly over $1 million this past week that had a notice of default filed in 2008 yet the bank still hasn’t foreclosed. How many more of these properties are out there?
2. Consumer confidence based upon the national/global economy.
My advice to Lake Norman home buyers at this point is to look for homes that are in good locations and have most of the priorities on your list. Then, to determine a realistic price, use VERY RECENT comparable sales. The selection may not be great but with interest rates at all time lows and prices for the most part having hit bottom it is a good time to buy. Just make sure you know your market niche!
OTHER ARTICLES of INTEREST
Lake Norman Relocation Resources
Lake Norman Sports Resource Guide
How to get the Lastest Lake Norman News, Events and Coupon Savings!
Lake Norman’s 2011 real estate market was, well, okay.
So, when all is said and done, our Lake Norman single family housing market was just okay in 2011. We didn’t quite match 2010 sales but at least we didn’t have a double dip back to our abysmal 2009 numbers! 5 months in 2011 were either equal to or better than 2010 while 7 months were lower compared to 2010. With the exception of March, the first half of 2011 was pretty tough but then we had a string of strong months (look at August!) before dipping back down in November/December. As you can see, there is really no consistent pattern by month:
Lake Norman Monthly Sales Chart for 7 Years
*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!
Price trends since 1998:
As you can see, our volume of Lake Norman home sales peaked in 2005 while our average sales price and price per square foot peaked in 2007. But, since our significant drop in 2009, our average sales price for all homes in Lake Norman has remained fairly stable while our number of home sales has increased about 16%.
This past year’s average price per square foot of $136 is not that far off of 2005′s $144 despite a drop to half the number of home sales.
Another interesting trend is the average days a home was on the market in Lake Norman (DOM which is the last column on the right). This number has consistently increased since 2006.
Of course, this is a very broad generalization including so many variables related to waterfront home sales, luxury homes sales etc. but it is important to see our annual trends to get a better overview of our Lake Norman home sales and price trends.
Waterfront home sales trends since 2006:
Waterfront homes have experienced more steady rises and falls in both volume an prices. After peaking in 2006 in volume, the number of sales plummeted 57% by 2008 and since then have steadily increased by a total of 72%. At the same time our average sales price and price per square foot peaked in 2007/2008 and have been consistently falling since that time. Since their peak, the average sales price has dropped 22% and the average price per square foot has dropped 29%. Finally, the average days on market has increase 3 fold since 2008.
Our waterfront market has such a diversity of types of properties, from luxury estates to single-wide mobile homes and from open main channel water to end of tiny coves that to truly understand your own market you will need to look at the sales by price-range and by age of the property as well. But, this overview is a good indication of our overall waterfront housing trends.
I would agree that most of the common terms to describe the current national housing market also apply to our Lake Norman real estate market:
I will focus on 2012 in my annual forecast in the next few weeks!
Learn More About Life in Lake Norman:
Lake Norman Relocation Resources
Relocating to Lake Norman
Lake Norman Participation Sports Resource Guide
Lake Norman, Our Inland Sea