Lake Norman has come to life in the past month; the water is warm, school is out and the boats, jet skis and water sports of all kinds are going on throughout the lake!
I am now having a continual flow of out-of-state buyers, especially from the Midwest and Northeast, coming to see our waterfront homes for sale. Of course, the million dollar question is: Is this a good time to buy a waterfront home?
During the past two years, the overall Lake Norman real estate market has slowed significantly. The only price ranges that have good activity are those that meet the conforming loan limits of $417,000. Our mid to high-end luxury home price ranges have slowed to a crawl which includes almost all of our waterfront homes.
Before our downturn in mid-2007 waterfront homes were increasing in value at a far greater rate than the rest of our homes. So, it would stand to reason that this niche would also have the greatest vulnerability to loose value. At our peak, the average waterfront home sold for about $300 per square foot. Today, the average waterfront homes are selling at about $206 per square feet. Here is a chart breaking the numbers down by our Multiple Listing Services areas:
Overview: We currently have 587 waterfront homes for sale and have sold 28 since January 1, 2009. If we were to keep up this trend, it would take 56 months for us to sell all of our waterfront homes. If we are generous and assume that about 23 homes will close in the next month based upon the number of pending sales as of today, we would currently have 26 months of supply. This compares to 18.5 months of supply for all of our Lake Norman real estate market. But, as you can see above, these numbers vary greatly by the area.The average sales price when compared to the average final listing price was about 90%. In other words, the average listing price was 10% higher than their sales price.
Area 13/1: This is the area North of Highway 150 on up to Statesville. With only one pending sale, this area has not picked up in sales and still has 58 months of inventory. The average sales price is $694,666 and the average dollars per square foot is $191. This area does not have as many luxury homes and was just experiencing their building boom when the market slowed. Builders have been hit particularly hard in this area because of the number of spec homes they had just built.
Area 13/2: This is South Iredell County/Mooresville from Highway 150 down to Langtree Rd at the new Exit 32. Included in 13/2 would be the luxury community of The Point. With 9 pending sales, right now we can estimate that we have about 22.5 months of supply. The average sales price is $1,004,757 and the average dollars per square foot is $211.
Area 13/3: This is Mecklenburg County including Davidson, Cornelius and Huntersville. Included in this area would be the luxury community The Peninsula. With 11 pending sales we can estimate that we have about a 12-month supply of waterfront homes. The average sales price is $833,363 and the average dollars per square foot is $215.
Area 13/4: This is Lincoln County including the unincorporated town of Denver. Included in 13/4 would be the Crescent community of Sail View and several smaller luxury home communities. With 4 pending sales, we can estimate that we currently have a 24-month supply of waterfront homes for sale. The average sales price is $784,050 and the average dollars per square foot is $184 which is the lowest of the 5 areas.
Area 13/5: This is Catawba County including Sherrills Ford and Terrell. Included in 13/5 would be the Crescent community of Northview Harbour. With 2 pending sales, we can estimate that we currently have a 50-month supply of waterfront homes for sale. The average sales price is $505,448 which is the lowest of the entire Lake Norman area. However, the average dollars per square foot is $204.6.
If there is one trend I can see, it is that the older communities are fairing better than the newer communities that still have new construction and/or are a bit more remote rather than being in the heart of Mooresville or Cornelius. This may be because our builders have been the first to be hit hard with foreclosures. Will there be a next wave of foreclosures before our market stabilizes? It would certainly make sense. Until jumbo loans are more available and affordable I still see our waterfront home market struggling. So, to answer my million dollar question: Is it a good time to buy a Lake Norman waterfront home? It depends. It depends on the location, the motiviation of the sellers and the season. Right now we are in our peak season for home sales, but once fall hits, I expect to see a significant slowdown that will last at least through winter 2010. Of course, this is only my opinion:)
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