*Compiled from the Charlotte Regional Multiple Listing Service’s data, this chart enables you to focus on your specific price range(s) rather than use the broad-brush approach thus allowing you to size up your competition and better position yourself.

How to read this report:

• First choose a price range.
• The next column provides the actual number of listings sold in this price range in the  4th quarter of 2011
• This is followed by the percentage this price range represents of the total number of listings sold
• Next is the number of active listings in this price range
• This is followed by the percentage this price range represents of the total number of active listings
• Finally, the last column represent the absorption rate or the number of months of supply for each price range based upon the number of listings divided by the number of sales.

Some Findings:

• Sales of Lake Norman homes when compared with the amount of inventory remain strongest in the lowest price ranges.  The $0 – $399,999 price range represented 62% of Lake Norman home sales and only 40% of the active listings. Properties up to $399,999 currently have an absorption rate of 6.3 month which is a perfectly balanced housing market!
• The second strongest price range this past 3 months was $900,000- $999,999 which represented 2.94% of Lake Norman home sales AND 2.68% of our active listings with 10.5 months of inventory.
• Our weakest price ranges in the past 3 months were the $500,000?s, $800,000?s and homes over $1,000,000.
• 9.66% of our home sales were at or above  $800,000 compared to 12.92%  last quarter and 14.3% in the 2nd quarter of 2011.  We had 1 closed sale over $2 million this quarter compared to 7 in the 3rd quarter, 6 in the 2nd quarter and only 1 in the 1st quarter. Our luxury housing market certainly slowed down in the fourth quarter and seems to do best in the spring and summer.
• Our overall Months of Supply dropped slightly to a respectable 11.5 due in large part to our shrinking inventory of homes for sale. To put this year in perspective, in the 4th quarter of 2009 we had a staggering 46.4 months of supply of homes for sale in Lake Norman!

As a buyer, the chart above will show you where you might face the stiffest competition and at what price ranges you might see opportunities.  As a seller, you can look at the Lake Norman real estate market’s activity by price range and if you are right on the cusp of, for example, a $500,000 listing price, it would clearly be prudent to price your home in the high $400,000’s  where there were nearly twice as many properties sold (and more buyers) and comparatively less competition.

Just for fun, I also created a sales chart by price range for the past year:

Please note that in all of the price range charts I am actually using data from the 15th of the month so these numbers won’t match perfectly with the monthly or annual sales numbers I provide.

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Let’s face it, we are being bombarded by economic predictions of all kinds this month; so much so that I even hesitated to add my own to the massive pile.  But, since my mission is to provide you with  insight into our Lake Norman housing market and the role the national, state and local economy plays on our successes and weakness, I will once again do my best to assess and make predictions for 2012.

The last line of my 2011 predictions was actually a fairly accurate summary of 2011:

2011 may hold some surprises but for the most part it will be a year of stops and starts; ups and downs and hopefully dwindling inventory.

And, indeed, we did experience a significant shrinking of our inventory of active listings so the 2011 Lake Norman real estate market actually exceeded my expectations.

In some respects, I could pretty much just copy my 2011 predictions for 2012 as I really don’t see many short-term signs that would justify a significant change in either direction. With distressed sales currently representing only 10.8% of our active inventory in my opinion short sales and foreclosures will not drive or dominate our market as they did in the past, particularly 2009-2010.  That said, in the first two weeks of  2012, 46% of the properties that just went under contract were either short sales, pre-foreclosures or bank-owned which underscores the mood of our current buyers…they want bargains when possible.

Before I go into more detail, let’s look at the larger economic issues that will impact our local market.

The Big Picture:

2012 will be about jobs, consumer confidence, stability of the European economy, handling of the backlog of foreclosures not to mention a year of political elections.

• Most economists seem to agree that our country will experience a year of modest growth  in 2012.
• Interest rates are currently at record lows (under 4%) and are expected to rise hand-in-hand with the strengthening US economy but remain historically low.
• “A fresh emphasis on healing the housing sector by…the Federal Reserve, in the Obama administration and in state capitols reflects the view that a healthier real estate market would go a long way in strengthening the economy” according to an article on November 3, 2011 in Reuters. Good news that they are focusing on housing!
• The proposed Feds pilot program turning bank-owned properties into rentals and a proposal that Fannie and Freddie provide an 12-month reprieve or reduced payments for the unemployed are supported as positive efforts that will help stabilize our national housing market.  Home loans will continue to be a very challenging process and will play a role in hindering the ability for our housing market to improve.
• Unlike last year at this time, nationally and locally our unemployment rates are falling.
• Inventory of homes for sale and mortgage delinquencies are dropping nationwide and here in Lake Norman
• Regarding shadow  inventory of properties in the foreclosure process, one pundit summed it up very well: ”Distressed inventory’s impact isn’t so much to lower prices as to prevent them from rising for many years.”
• National Association of Realtors chief economist Lawrence Yun said: “Lower inventory is a signal that price declines are coming to an end….prices have been moving both up and down with no consistent direction since 2009.  In other words: prices have been roughly stable for the past 3 years.”
• The National Association of Home Builders is forecasting GDP growth in 2012 at 2.2-2.4% and single-family housing starts to gain 17% in 2012 “following what was almost the worst year on record in 2011… The bottom line for 2012 is that, while demand for new homes won’t ‘burst forward’, it will slowing improve now that the overall housing market appears to have reached bottom and started back on the path to recovery.”
• An article on 12/11, Money Magazine noted that 2012 is a great year to buy “if appropriate for you” based upon cheap interest rates and a slight uptick in the national housing market
• According to a survey (sponsored by Zillow Inc) of more than 100 economists, real estate experts and investment strategists, Home prices…won’t hit bottom until late 2012 or early 2013.
• An article this week in Kiplinger noted: “The bleeding is just about over, but don’t expect a speedy recovery…the worst is over…this doesn’t mean prices across the nation are poised to rebound any time soon.”  “2012 will be the year that prices finally stabilize, setting the stage for gains in 2013.”

North Carolina:

Our Lake Norman housing market is also going to be impacted significantly by regional economic components, especially jobs.

• “Economists are predicting a sluggish economic recovery for North Carolina and the nation in 2012″ according to an article in the Charlotte Observer on 1/4 2012.    According to attendees at the recent Economic Forecast Forum sponsored by the NC Chamber and NC Bankers Association, “don’t expect dramatic improvements in the state unemployment rate this year.”
• Predictions for North Carolina: N.C. Jobless rate will drop to 9.3% from 10% in 2012. N.C. economic growth for 2012 will be 2% and N.C. will gain 40,000 jobs in 2012 compared to about 21,000 in 2011.
• North Carolina is still a destination for many from around the country ranking among the fastest-growing states according to the U.S. Census Bureau.  Altas Movers also ranked North Carolina in the top ten “inbound” states where more people move into the state than move out.  Good news for our long term market!
• North Carolina also ranked at the very top for the number of retiree’s moving to the state by the U.S. Census Bureau.
•  Forbes and Site Selection both ranked North Carolina 3rd in the best states for business/best business climate and in 3rd place on the list of migration to rather than from the state.
• North Carolina ranks among the states with the lowest number of foreclosures, coming in at 34 according to a Charlotte Observer article on 11/11/11.

My Predictions:

• Buyers will continue to expect bargains sometimes unjustifiably so.  With such low inventory, I am seeing properties that have been sitting selling at prices that are higher than the past few years. Sellers will need to steel themselves for low-ball offers as buyers continue to feel the need to attempt to get a very low price.  This will change as prices stabilize and consumer confidence rises.  It is important to note that this varies greatly by price range and neighborhood.
• Foreclosures and short sales will continue to make up about 1/3 of our Lake Norman sales but represent only about 10% of our inventory. We will continue to see active listings slowly evolving into short sales or foreclosures and new foreclosures coming on the market as the shadow inventory is cycled into our market.  These will sell at a disproportionately higher rate that non-distressed properties.
• Shadow Inventory?  One of the biggest questions I have again this year is just how many Lake Norman homeowners are either waiting to sell until they see a turn in the market or have withdrawn their homes from the market while planning to bring them back on the market once they see signs of improvement.  Our inventory is currently at record lows and we are closing in on our goal of 6-8 months of supply. The question is will a large number of sellers who have been waiting now jump into the market as they see sales improving thus weakening our recovery?  And, how many foreclosures are coming?
• More of the same?  Yes and no.  We are starting out 2012 with weak sales numbers but significantly lower inventory as well.  In 2012 I think we will continue to experience erratic monthly highs and lows in sales.  Foreclosures and shortsales will continue to keep our overall average prices down but will not dominate our prices in every price range or neighborhood. As pent-up home-buyers begin to accept that our Lake Norman housing market is stabilizing, they will take advantage of the low interest rates and jump off the fence when they find the right home that suits their needs.
• With inventory so low, I predict that our sales will remain at about 900 in 2012 which is about equal to the past two years.  Our overall average prices will stabilize but there will be many fluxuations within price ranges, neighborhoods, waterfront properties.  I feel pretty confident that 2012 is the year to buy waterfront properties as I watch the inventory of nice homes with good water at great prices disappearing and not being replaced.  It is going to more important than ever for buyers and sellers to know their specific niche’s recent comparable sales and not to rely on old data.
• Be informed, be smart and be realistic!

I would love to hear your thoughts and predictions. Please leave a comment!

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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:

• Erratic
• Fits and Starts
• Hopeful
• Comeback
• Cautious
• Rocky Bottom
• A light at the end of the tunnel
• The worst is over
• Price declines are coming to an end
• Home prices won’t hit bottom unitl the end of 2012 or early 2013
• Prices are stabilizing
• Shadow inventory could stall the market’s recovery
• Foreclosures May delay housing rebound to 2013

I will focus on 2012 in my annual forecast in the next few weeks!

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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!

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