The Point, with its 13 phases and about 900 home-sites is arguably the most well-known and popular luxury community on all of Lake Norman.  It has been fascinating to watch how the recession initially impacted its home sales and the progress it has made since then. In fact, the numbers today would indicate that The Point is actually leading the Lake Norman real estate market’s recovery.

Back in September of 2008, (see my article: Lake Norman Real Estate:  The Point, A Case Study, Part 2  ) The Point looked like this:

• 123 Active Listings
• A whopping 41-months of supply of homes for sale compared to the overall Lake Norman housing market’s 28-months of supply
• The average days on market for the 9 properties sold was 428 DAYS!

Now fast forward to today and The Point looks like this:

• 38 Active Listings (One third of the amount in 2008)
•  7.86 months of supply of homes compared to over 12-months of supply in all of our Lake Norman housing market
• The average days on market for the 29 properties sold in the past 6 months was 178 days

What a remarkable turn around during a very tough national economic slowdown!  What is so interesting is how The Point went from being significantly worse than our overall Lake Norman market in 2008 to today when it is a bit better off than our overall real estate market.

Here are two charts, one for waterfront homes and one for off-water homes to provide you an overview for the past 10 years.  Keep in mind that 2011 is not completed:

Waterfront Home Sales in The Point 

*Note that the while the number of homes sales this year to date are lower, the average price and $ per square foot are siginificantly higher.

Non-Waterfront Homes Sales in The Point

*Again, while the number of sales is down, the average price and days on market are improving.

This is yet another sign that our Lake Norman real estate market is improving.  Low inventories are key to this trend and they are continuing to fall not just in The Point but throughout our Lake Norman area.

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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 2nd 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 $0 – $399,999 price range.  This group of prices represented 51.73% of Lake Norman home sales and only 39.7 % of the active listings.  Another strong price range was $1million – $1,250,000 which represented 4.63% of Lake Norman home sales and 4.29% of the active listings followed by the $400,000 – $499,999 price range which improved significantly compared to the first quarter.
• Sales of homes when considering the months of supply (absorption rate) were strongest in these same price ranges as above.
• Our weakest price ranges were the $700,000′s, $800,000′s, $900,000′s and homes over $1,500,000.
• 14.3% of our home sales were at or above $800,000 compared to 11% last quarter.  We had 6 closed sales of homes over $2 million this quarter compared to only 1 last quarter showing some improvement in our Lake Norman luxury homes market.

As a buyer, this chart 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 $700,000 listing price, it would clearly be prudent to price your home in the high $600,000’s  where there were twice as many properties sold and comparatively less competition.  And, it would be much better for the seller to list in the $1 million – $1,250,000  to capture the attention of more than double the buyers than in the next price range if, of course, the expected value is close to $1,250,000.

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 The Point  in Mooresville NC is arguably the most prestigious luxury community in all of Lake Norman and it is also the largest with 18 miles of beautiful Lake Norman’s shoreline.  So, when I see interesting changes in housing numbers in The Point I try to put them in context to see if they are in fact an indicator of a significant shift or trend. 

Back on September 18, 2008 I wrote:  The Point in Lake Norman: A Case Study #2.  In this report I noted that we had 123 active listings which translated at the time to a whopping 41-month supply of inventory!  Then, in: Lake Norman Real Estate: Affordable Housing at The Point…Wow! on July 25, 2009 I noted that we had 114 active listings and had sold on 19 homes since the beginning of the year or a 38-month supply of active listings.

Today, the number of active listings in The Point has dropped to 82 or 33% below a year ago September.  In today’s buyers’ market this number alone is good news.  But, it gets even more interesting when you look at the recent sales numbers.  In this past October we had 9 closed sales in The Point which is a significant jump from any month for several years.  This makes for a total of 36 sales year-to-date in 2009 in The Point.  But, as of July 25, 2009 we only had 19 sales so we have almost doubled our sales for the year in The Point in the past 4 months.  At 36 sales we have already surpassed the 2008 sales total for the year of 33.  And, we have 7 pending sales and 5 conditional sales that will most likely close by the end of 2009 for a potential total annual sales of 48 almost half of which will have been in this winter 4th quarter.  If we average 5 sales per month we would have dropped to about a 16-month supply of active listings. While still high, this number is less than half of the 41 months we had in September of 2008. 

What does such a strong fourth quarter mean?  

While it is still clearly a buyer’s market in The Point, I think these numbers are significant enough to indicate a positive trend.  Inventory is dropping and sales are increasing.  While half of the inventory and sales are homes priced under $1million, there are FOUR homes priced well over $1million currently under contract and poised to close.  It would seem that some of our luxury home buyers are jumping off of the fence, enticed by some great price reductions and perhaps a sense that now is a good time to buy.

One example of an incredible bargain is a waterfront lot foreclosure that closed this past week in The Point for $400,000.  This lot sold for about half the market value.  It has very good water and views and is about an acre of a flat to gently sloping lot…just what most home buyers and builders are seeking.  At our peak this lot was probably worth over $1million.

Here are some interesting statistics related to homes at The Point: 

Active Listings:

•  82 today  (months of supply = 9.8 if use the past 30 days or 16.5 if use last 3 months)
• 114 in July of  this year  (months of supply = 38)
• 123 in September of 2008 (months of supply = 41)
• Peak of about 140

Pending Sales:  7

Conditional Sales: 5

Contingent Sales: 2

Solds:

• Since October 1, 2009:      9  (25 % of this year’s sales were in October!) 
• Past 3 month or since 8/11/09:      14
• Same 3-month period in 2008:     7
• Same 3-month period in 2007:     14 
• Year-to-date 2009:      36
• All of 2008:      33
• All of 2007:      76

Price ranges of homes currently on the market:

• $500,000:   5 
• $600,000:   9
• $700,000:  6
• $800,000:  15
• $900,000:  4

Contingent Sales:

• $699,000
• $2,199,000

Conditional Sales:

• $749,000
• $899,000
• $1,495,000
• $2,750,000
• $3,950,000

Pending Sales:

• $578,500
• $695,000
• $749,900
• $779,500
• $1,599,000

Waterfront homes on Lake Norman NC are selling.  I know because I have been selling them.  That’s the good news.  Depending on your own perspective, the bad(?) news is that of the last three waterfront homes I have sold, two were distressed sales where the sellers lost money and one was a foreclosure.

In my opinion there are currentlytwo categories of waterfront homes for sale:

• Distressed sales such as short sales, pre-foreclosures, foreclosures and bargains where sellers are able to price at the current market or below
• Over-priced listings where in sellers have negative equity or they simply aren’t motivated enough to lower their prices to sell in this market

After a  little research on the Charlotte MLS, I came up with some numbers of interest:

Lake Norman Waterfront 5-Year Sales Analysis

Here are some critical numbers:

• As of today, we currently have 27.8 months of supply of waterfront homes for sale which is almost 5 times the amount we should have in a balanced real estate market.
• While the number of  waterfront homes sold the past three months increased by 22% when compared to the same period last year, our waterfront homes sales have plummeted by -65% from their high in 2005.  Still, it is important to see that waterfront home sales are improving.
• The average sales price of a waterfront home increased until 2009.  Since the beginning of the year they have dropped -12%.
• While our average sales price is about equal to 2006, the average dollars per square foot for a waterfront home is back to our 2005 prices after peaking in 2007.  The price per square foot has dropped 20% since their highs just one/two years ago.

The average price of a waterfront home currently for sale is $1,098,431 which figures out at $275 per square foot or 30% higher than the average sales price per square foot.  Granted, the very high-end homes do skew these numbers a bit but the trend is clear.  Bargains are selling and over-priced homes are sitting.

When I first calculated these numbers I was not surprised but none the less taken a back by how they supported my recent experiences to the T.  As a rule of thumb, I had found that prices were back to 2005 so when I pull tax records for my buyers or sellers and I see a purchase date more recent than 2005 I already know that there is a good chance the sellers have negative equity in their home.

While we read that much of the country’s housing markets are improving, my discussions with brokers and lenders throughout the country and my research indicate that Lake Norman home sales trends are about 10 months behind much of the country. 

I can’t emphasize enough how important our levels of active listings are to our recovery.  In states like California, where the recession hit early and hard, they are experiencing multiple offers on their distressed/foreclosed properties and their months’ supply of for-sale inventory was 4.2 in September compared to our 18 months in Lake Norman over all. (And our 27.8 months of supply of waterfront homes).

This is a GREAT time to be shopping for waterfront homes.  (If you are a regular reader of this blog you will know that I don’t think I have said this once in the past two years). While a good portion of the homes are still overpriced, there are some incredible bargains popping up.  And, while these bargains are selling at a reasonable pace, we are not yet experiencing multiple offers so it is even possible to negotiate prices down on foreclosures!

In the next two reports I am going to analyze New Construction and Luxury Homes over $1million.  Stay tuned!

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If you hadn’t read my title for this article, you might think this photograph would be introducing a post about the beautiful luxury homes at The Point in Mooresville, Lake Norman.  In fact, this estate is currently one of the bank-owned properties at The Point.  The listing price is $875,000 for this approximately 5500 square foot newly constructed but only 90% completed home.  Not exactly what one would picture when thinking foreclosures! 

This morning’s Charlotte Observer article, “Foreclosed Homes Draw Hefty Crowd, ‘Scary’ prices”  highlighted a “mega-auction” of 500 homes held this past Saturday at the Metrolina Expo in Charlotte.  Some notable comments and statistics:

• Most of the 1000 attendees were real estate investors
• Some high-dollar homes went for as little as one-third of their previous price
• Mecklenburg County accounted for almost one in six of North Carolina’s 54,000 filings last year
• Charlotte-area sales prices declined 7.2% in December compared to December 2007
• Many of the auctioned properties were subject to seller approval.

No Lake Norman homes were mentioned in this article so I thought I would provide you with a little insight into our higher priced foreclosures and short sales. 

Right next door to the estate above is this home which is also bank owned.  Both homes are about 90% complete as the builder lost these properties before he completed them.

In our Charlotte MLS I found 5 short sales in the The Point ranging from an astoundingly low $499,000 to $1,075,000.  Interestingly, while there have been a number of significant price reductions in properties over $1.5 million, I did not see any mention of short sales or foreclosures in The Point itself in the highest priced listings. 

What I did see, however, were three estates with offers of seller financing.  Because jumbo loans have been so difficult to get, (above $417,000) it makes sense that an able seller might offer their own financing.

The key to a recovery of our normally dynamic Lake Norman housing market is a lowering of our inventory.  Unfortunately, every foreclosure and short sale instantly becomes the most recent comparable sale for any property in the neighborhood when it closes thus lowering the bar for all future appraisals/sales. 

This is the challenge we will continue to face until the number of active listings in Lake Norman drop back down to about an 8-month supply.  Hopefully with the incredibly low interest rates and the loosening up of credit as the incentives kick in, buyers who have been on the fence will have the confidence to move forward, take advantage of these low prices and interest rates and help our market head to a recovery!

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