So, the good news is that Lake Norman’s deplorable March closed sales does appear to have been a one-month aberration of what has otherwise been a pretty good year. Last month I wrote “I am positive this dip is short lived because we currently have 297 homes under contract compared to last year’s 272. Clearly we are now on a terror! ” I think it is fair to say that still holds true and then some. Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented only 4.5% of Lake Norman’s total April home sales. With just 6 distressed closed sales for then entire month it is safe to say they really didn’t plan a role in April at all. Distressed active listings currently comprise less than 1% of our current total inventory of Lake Norman homes for sales. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market.
- Waterfront homes continue to struggle. They represented only 23.5% of our April closed sales. At the same time they currently comprise 44.3% of our active listings. The average sales price of a waterfront home in April was $770,957. The average price per square foot came in at $220.48. It took on average 119 days for a waterfront home to sell and they sold for 96% of the listing price. We currently have 108 waterfront homes under contract which seems to indicate growing momentum. Our waterfront homes’ months of inventory stands at 14.2 which puts them very much in a buyers market overall but this varies quite a bit by price range. When really nice waterfront properties hit the MLS they are actually selling fairly quickly compared to the older inventory.
- 30 new construction homes closed in April through our MLS but this does not reflect an accurate picture of new home sales since so many are custom or are purchased directly from the builders and therefore never enter the MLS. (In fact, this segment of the market may be skewing our Lake Norman home sales numbers quite a bit. I read a tax report of all sales in Mooresville, for example, and 1/3 of them were builders selling directly to buyers.). The average listing price vs sales price of new construction single family homes was 99%. There is very little wiggle room in new home prices. We currently have 79 new construction homes under contract in the MLS. The average sales price in April logged in at $433,530. The months of supply of 5.7 puts this group slightly in to a sellers’ market overall.
- 44.5% of Lake Norman’s April single family home sales were under $400,000, down from 55.7% last month.
- 61.1% of Lake Norman home sales in April were under $500,000, also down from 73.2% last month.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 340 is so far above any prior month’s since I have been keeping these records I can’t even guess where our closed sales will be in the next few months but suffice to say they are going to be GOOD!
A closer look at the chart:
- The number of Active Listings today in Lake Norman is still 1% below last year’s. This is the closest we have been to last year’s level of inventory is quite some time. Our absorption rate/months of supply of active listings is 7.0 which puts Lake Norman overall on the cusp of a balanced market favoring neither buyers nor sellers. Within specific price ranges, however, there are swings from a buyer’s market to balanced to a seller’s market.
- Under Contract Show (conditional sales), are UP 9% versus this time last year. The average price of our new contracts is an impressive 11% higher than last year’s and the average price was up 11%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. They represent future closed sales most likely in late May or June. This number would indicate that we should exceed 2015’s sales in the next few months.
- Pending/Under Contract No Show sales are up 8%. These listings went under contract on average in 85 days but the average price is actually 3% lower than last year’s. Pending sales are contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. These would indicate that we should see some strong closed sales in May/June.
- Lake Norman’s closed April home sales in our MLS as of today and as stated above, are up 2% compared to last year’s. This means that 3 out of our first 4 months of 2016 our closed sales exceeded 2015’s. Because of the huge drop in March our total sales for the first 4 months of 2016 is still 2.8% below 2015’s. The average home took 90 days to sell which is 30% faster than last April’s. So, good properties are selling in about 3 months yet our average active listing has been on the market for over 4 months. This is the crux of the problem in Lake Norman. Stale, over-priced listings or listings with weaknesses are sitting and buyers are pouncing on good new listings.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- May 6, 2016: 340 (Wow!)
- April 6, 2016: 297
- March 6, 2016: 234
- February 6, 2016: 207
- Januuary 6, 2015: 176
- December 6, 2015: 202
- November 6, 2015: 222
- October 6,2015: 209
- September 7, 2015: 268
- August 6,2015: 286
- July 6, 2015 287
- June 6, 2015: 304
- May 6, 2015: 313
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- September 6, 2014: 272
- August 6, 2014: 261
- July 7, 2014: 268
- June 5, 2014: 262
- May 6, 2014: 274
Here is a breakdown by price-range of our Januray 2016 closed sales in Lake Norman
- $30,000 – $99,999: 3+
- $100,000 – $199,999: 12+
- $200,000 – $299,999: 22-
- $300,000 – $399,999 22
(These price ranges represented 44.5% of our April home sales)
- $400,000 – $499,999: 22+
- $500,000 – $599,999: 13+
(These price ranges represented back up to 26.5% of April’s sales)
- $600,000 – $699,999: 12++
- $700,000 – $799,999: 11++
- $800,000 – $899,999: 3
- 900,000 – $999,999: 4++
(These price ranges represented 22.7%, double last month’s 11.3%!)
- $1,000,000 – $1,499,999: 6+
- $1,500,000 – $1,999,999: 2-
- $2 million+ : 0
(#Solds $1 million+ = 6 % of our total April sales )
The stand out price ranges in April were most definitely in our trade-up price ranges $600,000 – $999,000. This segment of our market has been dragging for years so it is great to see such an improvement!
Higher-end home sales in Lake Norman
We saw a slight decline in our luxury housing markets in April. With only 8 sales in all of April over $1 Million and no sales above $2 million for the second month in a row, this market is still struggling to gain momentum.
Lake Norman’s Waterfront Housing Market
So, this continues to be the reality of Lake Norman’s waterfront housing market today: We have relatively few good, lower priced, waterfront homes, even tear-downs for sale. So, if a good tear-down or waterfront home in good condition comes on the market in the $300,000-$600,000 price ranges they sell fairly quickly. This is supported by the fact that the waterfront home sales closed at 96% of the listing price in 119 days. It is important for potential waterfront buyers to understand that there are fewer good options in the lower and trade-up price ranges so watch for new listings and act quickly. While our waterfront market hasn’t recovered from its peak, it has improved enough that the bargains of the recession are gone. The lowest priced listings are mostly at the end of coves, can’t have docks or are in less desirable locations. I have sold several luxury home buyers waterfront lots this past year as an alternative to settling for a home that doesn’t suit them or needs too much work. My gut is telling me that now that we are in our strongest months of the year and as new listings come on the market they are going to be at higher price ranges because the demand is there. Prices are going up out of circumstances rather than overall market trends. For more details: Lake Norman Waterfront Home Sales 2005 – 2015, Some Interesting Insights.
As of today we have 108 waterfront properties under contract compared to 79 last month which is very good. Our months of supply based on April sales is 13.2. This puts Lake Norman waterfront homes very much in a buyer’s market. That said, there are some good numbers in our 77 “Under Contract” waterfront properties where the highest listed property under contract is $4,399,000 and the average price for all homes under contract is $949,713. It looks like the higher end is recovering, at least in the short term. With our current market momentum it is more important than ever to know your price niche! Waterfront home buyers in the lower price ranges are going to have to lower their expectations and/or be willing to be more flexible. Keep in mind that the only finite property Lake Norman has is waterfront so supply and demand should drive prices up consistently in the future. Seriously, buy as soon as possible…this spring, if you find a waterfront property with good water in an acceptable price range.
12-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers are for single family homes. They come from the Carolina Multiple Listing Service and will not include sales that took place outside of our MLS.** I adjust past months when I do the monthly update as a few more sales are usually input late by agents. ***With our new MLS Matix program there are some variances in numbers but I am not going to go back to prior years and adjust.
I love this now 12-year chart of all of Lake Norman’s sales by month as it really gives us a good sense of where we are today and where we have been over the past 12 years. Look at those recession numbers and you can see just how far we fell and just how much we have recouped. 2015 exceeded all years back to 2006 so in sheer volume our Lake Norman housing market truly has recovered. With 4 months in the books, our 2016 first quarter sales, thanks to March, are still down 2% but look at how impressive our January, February and April numbers are when put in context of the past 12 years. I am very optimistic about the next several months but beyond that it is extremely hard to predict.
Summary and My Insight
Good signs/news remains almost the about the same as last month:
- For the first time our trade-up price ranges seem to be growing some legs!
- Interest rates remain below 4% but are ticking up slightly
- Lake Norman’s continued low inventory of active listings puts pressure on demand and plays a role in firming up prices.
- The number of distressed homes for sale remain so low that they are truly irrelevant and did not play any perceptible role in our Lake Norman housing market.
- New construction is definitely back. Custom and smaller groups of spec homes are popping up all over Lake Norman. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor.
- New listings in the lower price ranges that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Economists are predicting stronger sales in the south this year and Realtor.com even ranks Charlotte as the #8th hottest market in 2016. They predict a 10% increase in sales and a 6.5% increase in the median prices.
- Waterfront tear-downs and lots are selling but are also disappearing in prime locations. More buyers are willing to build or do major renovations if they can get “good” waterfront lots in good locations but with such low inventory it can be frustrating and some find it tough to accept that prices are going up.
- The popularity of new construction in all price ranges may be hurting our re-sale market.
- Our luxury price ranges are still very much in a buyer’s market.
- Lake Norman home prices are increasing in a rather inconsistent pattern and in different locations and price ranges. At the same time, according to economists, home prices in the entire US in 2016 will see only modest gains.
- Existing home sales are being challenged by new construction! In head to head competitions new construction usually wins which hurts resale homes in the same or similar communities.
- Strict loan standards implemented during the recession are still making it more difficult for buyers to qualify despite some easing and modifications.
- Finding the perfect home has become more difficult as sales improve. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling very quickly. Watching the “hot sheet” is once again a part of the buying process for some price ranges and locations. Don’t procrastinate when considering a new listing because they are selling quickly!
- On the flip side, most higher-end properties are simply taking much longer to sell.
- No matter how hard I try to provide you with the most accurate and insightful data, it is critical to know your own niche because there are so many variables in the Lake Norman housing market. Don’t assume all price ranges and locations are equal. You might be facing multiple offers and/or picked over inventory or you might not.
If you are looking in a “HOT” neighborhood and price range be prepared to make an offer quickly. No matter what, have your pre-approval letter in hand before even looking at homes. This is particularly important due to the new TRID closing process that took effect Oct. 2nd 2015. The new mandatory waiting periods during the loan process mean your lender has to be ready to go the minute you sign a contract on a property. I can’t emphasize this enough! Ask your lender and Realtor if they have experienced and are prepared to close using all of the new forms and deadlines. Then get your lender everything they need as soon as possible!
Always keep in ming that the real estate market in Lake Norman is extremely diverse. Make sure you know what is happening right now in your market niche. While your perfect home might come along, don’t wait too long and don’t dismiss a property if it isn’t perfect. Prioritize: Location, quality and depth of water (if waterfront buyer), lot and floor plan. Then, to determine a realistic price, use VERY RECENT comparable sales in your specific market niche. The selection may not be great but with interest rates near all time lows and prices rising it is still a great time to buy. With less than 1% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.If you read my post: Really Cool Real Life Examples of Home Values Trends in Lake Norman you will know that a lot of our new listings are selling VERY quickly and at higher prices. I feel that we have two different markets right now in Lake Norman. There are new listings that are priced right that are selling in just a matter of days and then there are the older listings and high-end luxury estates that are still struggling.
My Mantra: Don’t focus as much on the price as on the future marketability of the property. A bargain that has incurable issues that will make it difficult to sell in the future really isn’t a bargain at all. Be smart!
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