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 currently two 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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