You had to have been completely out of touch with the world not to know that this past month our US economic news was a bit bleak. Talk of a double-dip recession was bantered about based upon weak numbers, most importantly jobs.
Here in the greater Lake Norman communities, particularly Mooresville, there are actually a number of new small business, restaurants and service providers. And, according to Business Facilities.com North Carolina ranks fourth in the US for Economic Growth Potential, sixth for Best Business Climate, seventh for Biotechnology Strength and sixth for Biofuels Manufacturing Research Leaders. They also ranked Charlotte 5th in their Top 10 of Metro Areas with the strongest Economic Growth Potential.
I am confident that our long-term future is very bright for our Lake Norman communities. I wish I could say the same about our current housing market!
The most stunning and shocking news hit my email on September 3rd. Simonini Builders, one of our best and most forward thinking builders, unexpectedly announced they are “winding down” all of their current building and will not be taking any new orders for custom homes. After much fanfare about their new Preserve at Robbins Park community representing the future of our Lake Norman housing including a focus on energy efficiency and smaller, more effective floorplans AND the fact that they are the only builder participating in our annual HomeArama featured in the September issue of our Lake Norman Magazine, it appeared that Simonini was going to lead our local builders out of the recession. Instead they are closing their doors permanently.
August has been a relatively weak month of the year for Lake Norman home sales. This past August our sales were almost flat compared to 2009:
The total number of Lake Norman single family homes under contract on August 31, 2010 were identical to our numbers of 157 when compared to the end of July, a 7% decline from June’s 169 and a drop of 15.5% when compared to the 200 at at the end of May.
Let’s take a look at the details:
- Active Listings dropped 11% from a year ago. . Based upon our August sales, we now have 19 months of inventory. Our goal of a truly balanced housing market of 6-8 months of supply is still out of reach.. To achieve these numbers given our current inventory levels we will need to sell about 175 homes per month! Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. Note that the average price of our active listings dropped 11% compared to August 2009. We continue to see a number of price reductions.
- Contingent Sales, which don’t account for a significant segment of our housing market, dropped 14%.
- Conditional Sales increased 37% this month compared to August 2009 but were about equal to last month. These are homes that just went under contract and still have financial and inspection conditions. They will represent closed sales in either late September or October. October 2010 will most likely be slightly below our October 2009 sales.
- Our pending sales represented a 22% decrease from a year ago and a 12% drop from the end of July. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of sales in the next few weeks. These numbers would indicate that our closed sales this month will be below September 2009 and below last months’ as well.
- The number of closed sales were up 3% from August 2009 and down 8% from last month.
Here is a breakdown by price-range of our August 2010 closed sales:
- $42,000 – $199,999: 10
- $200,000 – $299,999: 19
- $300,000 – $399,999: 11
- $400,000 – $499,999: 8
- $500,000 – $599,999: 4
- $600,000 – $699,999: 7
- $700,000 – $799,999: 2
- $800,000 – $899,999: 4
- $900,000 – $999,999: 0
- $1,000,000 – $1,999,999: 3
- $2 million+ : 2
57% of our Lake Norman home sales were under $400,000 compared to 46% last month. 75%were under $600,000 and 84% were under $700,000. The $700,000 – $1 milllion price range has slowed significantly.
6-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.
**I have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009 and 2010 and the totals in the prior calendar year. The columns may not add up but I do my best with what I have to work!
I love this chart because it puts our Lake Norman home sales numbers in the context of the past 6 years. For the past three years our August sales dipped after July yet going back to 2005 – 2007, August was actually a much stronger month for Lake Norman homes sales. It looks like we will have decent sales numbers for this October especially when compared to 2008. The 4th quarter of 2008 and first quarter of 2009 which was during the US financial crisis, may represent the weaked sales number for our Lake Norman housing market which is a good thing. However, our recover as been very slow.
With our luke warm US economy and low consumer confidence, I actually think that this fall and winter will be a good time if you are a Lake Norman home buyer. Sellers should have real concerns about the short-term future and should be willing to negotiate more seriously!
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