LAKE NORMAN SINGLE FAMILY HOUSING REPORT

 The news regarding the US housing market has lately seen some positive mixed in with negatives:

• Sales activity has improved in some areas around the country, due in part by the number of foreclosures.
• The National Association of REALTORS is projecting a 1% rise in 2009 home sales.
• By 2010 NAR expects the median price of resale homes to rise 4.1% and sales to increase by 5.8%
• The just released S&P/Case Shiller Home Price Indices through January 2009 “shows continued broad based declines in the prices of existing single family homes across the US.”  They say prices are back to 2003 levels in many areas of the country.

 With so much information gathered by using a variety of sources of information, it can be difficult to know exactly how this news pertains to our local Lake Norman housing market.

Using the data from the Charlotte Regional Multiple Listing Service for the Lake Norman area (13 1-5) as I do every quarter, I have provided you with an overall summary of the 1st quarter of 2009 as well as a detailed breakdown by price range:

 Summary:

• Active Listings have stabilized compared to last year but are still too high!
• Contingent Sales are just down slightly
• Conditional Sales are up 30%!
• Pending sales dropped 43% versus 2008
• The number of Lake Norman homes that sold in the first three months of 2009 dropped 44% versus 2008
• Because our sales volume dropped substantially but our inventory is about the same, the number of months of supply of active listings we have in Lake Norman is up to a whopping 41.8.  If you keep in mind that a balanced market is about 6-8 months of supply we in fact have 7 times the number of homes on the market than we should have given our drop in sales volume.

Lake Norman 1st Quarter Market Report by Price Range

 To read this chart, choose any price range and first note the number of sales compared to the active listings and then look at the % of the total number of listing and sales this price range represents to get an idea of where the strengths and weaknesses are in Lake Norman.

Example #1: The $200,000 – $299,999 price range represents 25.23% of our entire Lake Norman home sales and yet is only 11.83 % of our listings.  This is a very strong price range although with 175 active listings and only 28 sales which is an 18.8 months of supply of active listings there are still about 3 times the number of listings for a balanced market.

Example #2: The $1,000,000 – $1,249,999 price range represents 5.4% of our sales yet only 4.14% of our inventory.  Despite the low sales number and high inventory, this is our hottest price range of home sales above $400,000.

If you are a buyer, look at your price ranges to learn how much inventory there is versus the the number of sales.  This insight will help you better understand the Lake Norman real estate market in your price range and assist you when determining how to write up an offer.

If you are a seller on the cusp of two price ranges, let’s say between the high $300,000s or the low $400,000s you would be well advised to list in the $300,000s where there is slightly less inventory and almost double the number of sales.

It is interesting to note that 61.27% of our Lake Norman homes sales in the first quarter 2009 were under $400,000 and 81.1% under $600,000.  With our conforming loan limits at $417,000, it is clear that those that can get the great interest rates are buying while the difficult jumbo loans have had a negative impact on our higher end homes.

Finally, here is the 5-year comparison by month.  As you can see, March sales were down -41% versus March 2008 and -330% versus March 2007.

5-Year Comparison of Lake Norman Home Sales By Month 

* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.

**While my totals on this chart for 2008 sales is 870, when I search on our MLS for the entire year they give me a slightly higher number of 916 so I will use that as our official number for the sake of this analysis.

I hope these charts provide you with the knowledge you need whether buying or selling here in Lake Norman.  If you have any questions please don’t hesitate to contact me!

January 23, 2009

 Above is a chart with today’s “Hot Sheet” numbers from the Charlotte Multiple Listing Services for single family homes in Lake Norman (Area 13). These numbers represent a snapshot of the past TWO weeks of activity. As always, I have provided a two-week Hot Sheet from each of the prior 5 months for comparison with the exception of November when my blogsite was down. Here are the highlights: 

• New Listings have jumped up to the levels of last July.  At a time of significantly high levels of inventory of homes for sale in Lake Norman, this is not a positive sign.  This indicates that sellers are following traditional trends and putting their homes up for sale for the spring.  Unfortunately, this will only further exacerbate our struggling real estate market.

• The number of homes coming “Back on the Market” remains fairly consistent.  41 homes in the past two weeks came back on the market adding even more homes actively for sale.

• The number of price changes has increased since a drop during the holidays.  Prices are coming down as sellers and Realtors are facing this tough market.

• Pending sales are even lower than in December.  Since Pending sales are an indication of future closings, this would indicate our closed sales for the month of February are not going to increase.

• At 6 solds, I must admit I have checked this number twice.  Could our closed sales have dropped to one sixth of the number sold last month?  My only guess is that these would have been put under contract during the holidays and that closed sales will go back up at least to last months numbers.

• The number of contingent and conditional sales actually increased.  This would indicate that in the past two weeks more than twice the number of homes went under contract than sold. 

Clearly, the Lake Noman housing market is struggling even more than in prior months.  Today’s Charlotte Observer Headline article:  “Plunge in home building getting deep in region”  provides even greater perspective on our regional housing market.  The silver lining is that with so little new construction our inventories are now about 2/3 resale homes.  Once we get those inventory numbers down and sales up, builders can begin to build. 

 RELATED ARTICLES

Lake Norman Real Estate’s 4th Quarter Sales Analysis

Lake Norman Real Estate’s December 2008 Sales Analysis

Lake Norman Real Estate’s 3rd Quarter 2008 Sales Analysis 

Wow, what a year!  After a significant drop in closed sales in November, we actually had a pretty strong December when compared not only with November 2008 but with December 2007.  And, we in the Lake Norman area were not alone.  December seemed to be a better month for communities all over the country.  Speculation is that the drop in interest rates bumped the sales up.  It is hard to know how long this bump will last but it’s sure nice to have some halfway good news to report!

Active Listings:  The good news is that our number of active listings is still dropping. However, at a 24.6 months of supply of active listings if we continued at our current sales rates, we still have a serious surplus of listings.  Remember that a balanced real estate market should have between 6-10 months of supply.

Contingent Sales:  This number is identical to our November contingent sales.

Conditional Sales:  This number is down from 22 in November or a decrease of 23%

Pending Listings Sales:  At the end of November we had 74 pending sales.  At 55 in December, pending sales have dropped 26%.  Since these are the homes most likely to close in January this is a sign that our January closed sales will be down.

Closed Sales:  Compared to our dismal 46 sales in November, we actually had a 24% Increase in the number of homes sold!

2008 Lake Norman Home Sales Summary

* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.

**While my totals on this chart for 2008 sales is 870, when I search on our MLS for the entire year they give me a slightly higher number of 916 so I will use that as our official number for the sake of this analysis.

The number of homes sales in Lake Norman in 2008 dropped 38.6% compared to 2007.  This compares to an overall drop in the entire Charlotte Regional MLS area of 29.5%. 

Summary:  There is no doubt that 2008 was a very difficult year for Lake Norman home sellers, both builders and resale homes.   In my opinion, the key to a true sign that the worst is behind us in the Lake Norman real estate market will come only when our inventory of homes for sale, both new construction and resale, drops to about 10 months of supply.  This will happen with some combination of a significant increase in the number of home sales and a consequent decrease in the number of active listings.

RELATED ARTICLES

Lake Norman Real Estate: November Sales…Oh my!

Lake Norman Real Estate: A Reality Check

This morning I got a glowing email from a real estate agent referring to the article today in the Charlotte Observer. Yippee! “Area home prices are showing signs of life….Overall, the Charlotte market is holding up better than many others around the U.S.”

Darn that S&P/Case Shiller Home Price Index. And you, Office of Federal Housing Enterprise Oversight, with your numbers showing that Charlotte area home prices rose 5.2%. Can we talk? First of all, both of you are talking about a 12-month period ending June 30th. A lot has changed in our housing market in the past two months, so exactly how valuable is a 12-month report dated June 30th? Second of all, one of you doesn’t include “subprime lending, many government-backed loans and the largest mortgages.” Aren’t these kind of important in this current real estate market?

So, our area housing marekt is “showing signs of life”? In Lake Norman we currently have 1763 active listings and a total of 82 homes sold in the past 30 days. This means we have a 21.5 month supply of active listings. A balanced market has 6-8 months of inventory. In the same period last year we had 143 home sales. Is 3-times the number of listings and a 42.6% decrease in the number of home sales your idea of showing signs of life?

If you go on to read the Charlotte Observer article you will find that they do note a 37% regional sales drop in home sales, a decline of 52% in Mecklenburg County building permits…the lowest since “at least 1998? and a few other insights that might challenge their optimistic headline.

All of you that read my blog regularly know the statistics about the Lake Norman real estate market. Frankly, they are not showing signs of improvement but there is some indication that we are leveling off. The reality is that until our inventory of homes is back down to a 6-8 month of supply on hand we are going to see downward pressure on prices.

I have been through the recession in the early 1990’s. I know our Lake Norman market will come back to life. We will again be THE destination for so many looking for the perfect place to live and when it does I will be the first to let you know! Until then, please read the small print!

RELATED ARTICLES

Finding the Truth about Lake Norman’s Real Estate Market: A Case Study

Lake Norman Real Estate: What are the Experts Saying?

Lake Norman’s 2nd Quarter 2008 Real Estate Sales Analysis

Lake Norman Real Estate: Is New Construction Slammed by Housing Slump?

It’s Official: The Number Of Newcomers has Slowed

Lake Norman Waterfront Home Sales Update

Lake Norman Relocation Resources