LAKE NORMAN HOUSING REPORT
We have just closed the books on the 1st quarter 2008 of home sales in Lake Norman and as one might expect, the numbers certainly substantiate a continued buyers market with a very large inventory of active listings compared to the number of homes sold.
As I stated last quarter, there is no doubt that our Lake Norman home sales have been greatly impacted by the number of ˜transplants who traditionally relocate to our area in the spring as they are still struggling to sell their homes in the Northeast, Midwest, California and Florida.
Home buyers considering Lake Norman are also quite nervous about the housing market so are ˜sitting on the fence waiting for a sign that the downturn has stabilized. Despite very low interest rates, and a substantial inventory from which to choose, the lack of consumer confidence continues to impact Lake Norman home sales.
Here is a summary of the Lake Norman 1st Quarter real estate sales:
- Number of Active Listings = 1572. This is the highest since I have been doing these market reports a year ago. On January 1, 2008 we had 1259 active listings so we have 21.2% more active listings at the end of this quarter.
- Number of Contingent, Conditional and Pending sales = 167 compared to 153 in the last quarter of 2007 which is an increase of 9%. This shows current sales are up slightly from the end of the fourth quarter 2007.
- Number of homes sold = 200 compared to 357 in the 1st quarter of 2007 which is a -44% decline.
- The average sales price of a home declined just 2% versus the same quarter in 2007
- Our months of supply of inventory has increased to a whopping 23.5 months. (A healthy, balanced housing market should have 6-8 months of supply of active listings).
- The average number of days a property is on the market increased by 13%
In a nut shell, sales have dropped by 44%, but the average sales prices has declined only 2%. This may be partially due to the number of price reductions taken before a property has sold. Most importantly, however, we currently have significantly more homes for sale than the current demand.
As always, I think it is critical to look at our Lake Norman real estate statistics by price range for the 1st quarter in order to get a better idea of what is selling and where our strengths and weaknesses are most obvious:
* All of this data is from the Charlotte Regional MLS
To read this chart, choose any price range and first note the number of sales as compared to the number of active listings.
Example # 1: In the $200,000 – $299,999 price range 37 homes sold and there are 158 active listings. This price range represents 18.5% of our sales and 10.05% of our inventory of homes for sale. There is an 8.4 months of supply and the average days a property is on the market is 125. Overall, this is a very strong price range.
Example # 2: In the $400,000 – $499,999 price range 22 homes sold and there are 237 active listings. This price range represents 11% of our sales but is 15% of our inventory. The months of inventory at this pace of sales is 22.6 or almost three times as many months of supply of the homes prices under $400,000. Clearly, this is a very weak price range right now
Example # 3: In the $1 million – $1,249,999 price range 9 homes sold and there are 58 active listings. This price range represents 4.5% of our sales but is only 3.69% of our inventory. There is a 14.2 months of supply which is actually quite a bit better than most price ranges, especially compared to the next price bracket where there were no sales this past quarter.
If you are a seller, look at your price range to determine how best to position yourself. If you are on the cusp of $400,000 it would be wise to list your home just under $400,000 where there are fewer homes for sale as compared to the number of buyers. Or if you were on the cusp of $1,250,000 is is clearly better to price your home UNDER $1,250,000. This same concept can be applied to any price range.
If you are a buyer, look at the price ranges to see how much competition you have versus the amount of listings to determine where you might have the best opportunity to negotiate a lower purchase price.
The Bottom Line: The overall Lake Norman real estate market has slowed down versus the same period last year and inventory is quite high which would indicate we are still in a Buyers Market. However, this varies by price range and may change as we enter our historically very strong 2nd Quarter.
I provide all of this information so that you can be a more informed buyer or seller. However, it is important to remember that a real estate purchase is usually about finding a home. If you are planning to stay in this home for a number of years then this truly is a great time to buy. I urge you to consult with your Realtor to determine what is best for your specific wants and needs!
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