Lake Norman’s 4th Quarter 2009 Housing Market Overview
While my monthly and bi-weekly market reports for Lake Norman Real Estate provide a good pulse of our housing market, my quarterly summary (as above) and price range analysis (see below) provide some invaluable insight into important trends that aren’t readily available.
As you can see, our Lake Norman 4th quarter 2009 numbers are dramatically different from a year ago:
- The number of active listings decreased by 20% while our number of sales of single family homes increased by 19%. This resulted in a drop of our months of supply of active listings to 16.8 from 25.1. Obviously, if this trend continues our buyer’s market will ultimately transition to a more balanced market. (A balanced market is 6-8 months of supply).
- The average price of homes that went Conditional, Pending and Sold this past quarter increased for the first time in many months. While our market was driven by the first-time buyer price ranges there has been some movement in our luxury and waterfront homes as well.
- The number of contingent, conditional and pending sales, which are a barometer of our future month’s closings, increased substantially compared to 2008. While we are up against a very weak first quarter 2008, it does look as if we will see significant improvement in our housing market in the first quarter of 2010 compared to 2009.
Inventory Down + Sales UP = an improving Lake Norman real estate market. This is the exact opposite of what I reported for the 4th quarter 2008. The big question is:
Is this a false bottom and will our market drop further in 2010 or are we beginning what is likely to be a slow and bumpy recovery?
Lake Norman 4th Quarter Sales Analysis by Price Range
If you can take the time to really study it, this chart will provide you with some incredibly detailed insight into our Lake Norman housing market. I have to manually compile these numbers using our Charlotte Regional Multiple Listing Service’s data. This is particularly meaningful to buyers and sellers because you can isolate your price range 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. (column 1-3)
- The next column provides that actual number of listings sold in this price range in the 4th quarter
- 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
- The next column represents the average number of days on the market for listings sold in this price range.
- Finally, the last two columns 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.
- Sales of homes up to $300,000 reflect the strongest price niche. However, compared to last year, our Lake Norman market saw a marked improvement of our trade-up price ranges up to $800,000.
- Sales of homes that fall within the FHA conforming loan rate of $417,000 represented about 60% of our overall Lake Norman home sales.
- 90% of our home sales were under $800,000.
- Of the remaining 14 higher priced sales, 2 sold for over $3 million and 5 over $2 million. While still weak, our high-end luxury home market has vastly improved over last year.
- Homes price at or above $900,000 represented 7.6% of our sales while they make up 27% of our inventory. A significant number of luxury homes have been withdrawn from the market this past fall. The big question is: are the remaining sellers running out of time and going to become distressed sales, will we see significant price reductions in the $800,000+ listings or will these sellers simply wait out the market?
- Observation: The uptake in the trade-up price ranges includes many short sales and foreclosures of homes that were originally price at or above $900,000 and ended up selling for hundreds of thousands of dollars less than their initial asking price. Will this trend continue? It depends on how many of the remaining sellers of listings at or above $900,000 are facing financial difficulties.
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 activity by price range and if you are right on the cusp of, for example, a $900,000 listing price, it would clearly be very important to price your home in the $800,000’s or even lower depending on your neighborhood comparable sales as you will find more buyers are willing to buy in these price ranges and you may be significantly over priced.
In Part 3 of this series I will provide annual sales statistics for Lake Norman real estate and take a stab at making some predictions for 2010.