A bang. A BIG bang. After a significant slowdown in November, our Lake Norman real estate market ended 2014 with an explanation point by posting a 20% increase in sales over December 2013 and 25% higher than last month’s. With 120 closed sales, December 2014 didn’t just cream last year’s but all prior Decembers’ since 2006 and might even meet that month’s sales once our few stragglers are posted to our MLS in the next few days. Unfortunately, this trend probably won’t continue into January 2015. Let’s take a closer look:
Lake Norman Market Report December 2014
* All data is from the Charlotte Regional Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 7.5% of Lake Norman’s total home sales. We had just 9 distressed sales in December with an average price of $352,597 (The highest closed sale price was only $675,000). Distressed active listings comprise only 3.5% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes were 23.3% of our December home sales while they currently comprise 40% of our active listings. The average sales price of a waterfront home in December was $874,611 and the average price per square foot was $225.42 (Up from last month’s 212.84 but down from our prior peak of $229 last summer). It took on average 166 days for a waterfront home to sell and they sold for 94% of the listing price in December. Overall, waterfront homes just aren’t selling at the rates they were in past years. We currently have 10.75 months of supply of active listings which puts waterfront homes in a buyer’s market.
- 21 new construction homes closed in December 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). The average listing price vs sales price of new construction single family homes was 100%. Clearly there isn’t a lot of wiggle room on prices of new homes! We currently have 48 new construction homes under contract in the MLS. The average sales price in December logged in at $390,032. The bulk of our new construction market is still in our lower to middle price ranges.
- 55.83% of Lake Norman’s December single family home sales were under $400,000 which is about equal to last month’s.
- 66.67% of Lake Norman home sales in December were under $500,000 which is lower than last month’s 72.83% but more in line with the rest of 2014.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 154 is down substantially from last month’s and even one lower than last year at this time. While December was exceptional, new activity in our Lake Norman housing market slowed down fairly rapidly in the past month and is now more in line with typical seasonal trends for 2014 and 2013.
A closer look at the chart:
- The number of Active Listings in Lake Norman is 4% higher than last Decembers’. Our absorption rate/months of supply of active listings today is 6.6 compared to 9.3 last month and 6.0 in October. Using the nationally defined goal of 6-8 months of supply for a balanced housing market, after a one-month dip we are back in a solidly balanced market to make this 6 out of the past 7 months. Within specific price ranges, however, there are swings from buyer’s market to balanced to even a few in a seller’s market. (See below)
- Under Contract Show (conditional sales), are up 3% versus this time last year.These are homes that just went under contract (have an accepted offer) and still have financial and inspection conditions. They represent future closed sales most likely in late January/February. This number would indicate that our closed sales will just about match last January’s. While we ended 2014 on a high note, it looks like we will start 2015 barely matching January 2014. Note that the average price is actually down slightly for both Under Contract Show and our Pending sales
- Pending/Under Contract No Show sales were down again slightly after 2 strong months. These are the contracts that are past their inspection/due diligent periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. I feel that we will just match last January’s sales numbers and enter 2015 without the momentum of the second half of 2014 .
- Lake Norman’s closed home sales in as of today and as stated above, were up a whopping 20% last month. And, there were up 25% from last month’s (November) sales! The average sales price was about equal to December 2013’s and the average days on market were down 19%. The average house in Lake Norman sold in about 100 days. Clearly Lake Norman’s housing market had a great December and year-end 2014.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- April 6, 2014: 243
- March 6, 2014: 187
- February 6, 2014: 185
- January 6, 2014: 155
- December 6, 2013: 197
- November 6, 2013: 207
- October 6, 2013: 207
- September 6, 2013: 218
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- January 6, 2013: 184
Here is a breakdown by price-range of our November 2014 closed sales in Lake Norman
- $44,000 – $99,999: 3
- $100,000 – $199,999: 15+
- $200,000 – $299,999: 26
- $300,000 – $399,999 23++
(These price ranges represented 55.8% of our December home sales.)
- $400,000 – $499,999: 13-
- $500,000 – $599,999: 12+
(These price ranges represented 20.8% which is lower than last month’s )
- $600,000 – $699,999: 6
- $700,000 – $799,999: 7+
- $800,000 – $899,999: 4
- 900,000 – $999,999: 2
(These price ranges represented 15.8% which is up slightly from last month’s)
- $1,000,000 – $1,499,999: 7+
- $1,500,000 – $1,999,999: 0
- $2 million+ : 2
(#Solds $1 million+ = 7.5% )
The stand out price ranges in December in all of Lake Norman were the $300,000’s, $500,000, $700,000’s and the $1,000,000 – $1,499.000.
Higher-end home sales in Lake Norman
Mercurial and unpredictable continues to come to mind when trying to describe our luxury housing market. August was such an improvement over the past years’. We even had two sales at or above $3,000,000. In September our numbers were back down with only 2 sales above $2 million and in October we had a nice increase in the $1,000,000 – $1,999,999 but we only had one sale over $2 million. In November they sank back down fairly dramatically in all price ranges above $700,000. This past month we saw a jump in the $1,000,000 – $1,499,999 price range but one two sales above that price. For all of 2014 we had 188 closed sales at or above $800,000 compared to 169 in 2013 and these homes averaged 245.83 per square foot versus $236.92 in 2013 so we did experience a modest improvement in our luxury market over all this past year. I REALLY want to see more consistency in this niche!
Lake Norman’s Waterfront Housing Market
Our waterfront home sales in the trade-up price ranges showed some improvement in December. We currently have 301 waterfront homes actively listed for sale on Lake Norman. With 28 closed sales of waterfront homes in December this means Lake Norman currently has 10.75 months of inventory of waterfront homes for sale which puts this niche in a strong buyer’s market.
Overall in 2014 Lake Norman had 415 waterfront sales compared to 403 in 2013. The average waterfront property in 2014 took 85 days to sell, sold for 95% of the listing price and cost $222.93 per square foot. The average waterfront property in 2013 took 112 days to sell, sold for 94% of the listing price and cost an average of $217.59. Waterfront home values in 2014 improved by a modest 2.4%.
I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman. Folks are gobbling up waterfront tear-downs. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. New construction in every price range is beating existing homes in popularity. On my tiny street there are 3 waterfront homes under construction…the first since we moved here in 2005. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of this low period as it is hard to predict what will come next spring.
10-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 Charlotte Region 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.
Thanks to our sustained higher sales in the second half of 2014, Lake Norman’s total 2014 home sales were 7.9% HIGHER than 2013’s! We have not seen the national 2014 sales numbers yet but I believe that Lake Norman had a better year overall than the entire US.
Summary and My Insight
- In sheer number of home sales, 2014 was our best year since 2006 even exceeding 2007!
- December was a great month for closed sales in Lake Norman helping to close the year out 7.9% higher than 2013.
- What I loved seeing this year is 8 strong months of closed sales rather than one great month like May 2013 and then a major drop off in the fall.
- For the year, Lake Norman homes sold more quickly (in 71 days vs 83 days in 2013) and the average price per square foot went from $144.64 to $149.50 for a 3.6% increase.
- The sales average price for 2014 was $494,981 compared to $$475,030 for a 4.2% increase.
- Lake Norman’s inventory of active listings continues to drop at about the same rate as last year. We are now in the slowest few months of the year so it is important that our number of active listings remain low. That said, buyers are complaining about the lack of new listings!
- Our Lake Norman home values are stable and consistently improving overall. There are pockets of strengths and relative weaknesses which result in fluctuating average sales prices when combined for the entire Lake Norman real estate market. The lack of distressed sales has also contributed to higher overall average prices. The “bargains” are all but gone. What I really want to see is consistent measurable increases in Lake Norman home sales in ALL price ranges.
- There are still pockets of “hot” home sales in the greater Lake Norman area, notably the popular off-water and moderately priced communities in Huntersville, Cornelius and Mooresville where inventory is very low and multiple offers are not uncommon. This is also true of new construction subdivisions like Lennar’s phase of The Farms in Mooresville.
- The number of distressed homes for sale are so low they are truly irrelevant and did not play any perceptible role in our Lake Norman 2014 sales.
- New construction is definitely back. While we only sold 21 new homes last month through the MLS, we have 48 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. I have been showing in several new housing communities and they are booming! Custom and smaller groups of spec homes are popping up all over Lake Norman.
- Economists say that continued housing improvement depends on fundamentals like job growth, rising incomes and low vacancy rates all of which the greater Lake Norman and Charlotte area are experiencing.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Long term mortgage rates just hit their lowest level since May 2013. What is really amazing is that Jumbo loan interest rates are currently LOWER than conforming loan’s.
- I am personally experiencing a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman this year. Because sales and prices are up in many states that feed relocating buyers to our Lake Norman area, more homeowners are able to sell and move now than in the past 5 years.
- According to a July 1 article on Trulia Pro Blog, of their “7 signs of a Soon-to-Be Super Hot Market”, Lake Norman definitely has 4 of them including the new Whole Foods Market that opened on November 4th in Huntersville. This was one of their key signs of positive economic futures!
- Finally, housing forecasts for 2015 are almost all optimistic with some predicting significant gains and others more moderate but all that I have read expect gains in 2015. New construction is expected to experience a resurgence of about 25% and many are also predicting a return of first-time home buyers which have been at historic lows for several years.
- Our new contracts (Pending and Under Contract Show) are down indicating that our short term home sales will be modest.
- The rest of this list below are the same as prior months:
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges unlike many areas in the country where they are seeing consistent price increases.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- Interest rates are expected to increase in 2015 and reach as high as 6% by 2016.
- Tightened credit, tougher loan standards and increasing interest rates have made it harder for buyers this year.
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of re-sale listings is “stale”, especially higher prices on the water. Even new listings are many times homes that were on the market off and on for several years. As has always been the case here in Lake Norman, most buyers want new or move-in condition homes. Since new construction pretty much disappeared after the recession, we are now looking at an aging inventory of homes which is why buyers are turning more towards building or remodeling than in past years. Or, they are buying new construction or lots and building, especially on the water.
- Finding the perfect home has become more difficult because much of the older inventory has been picked over. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling quickly. Watching the “hot sheet” is once again a part of the buying process.
- On the flip side, 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.
My advice to Lake Norman home buyers has changed only slightly. I still emphasize the importance of good locations and prioritizing your list of features you want in your home and lot. But, if you are looking in a “HOT” neighborhood and price range or if you can’t find your perfect, move-in condition home, be open minded about homes that need some work. If the floor-plan is good, perhaps having to do some painting, new flooring etc. is your best option. 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 low but rising it is still a great time to buy. With less than 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price. Low-balling, except on over-priced properties, really isn’t a great strategy nor will it result in a lower price. To the contrary, it usually serves to offend the sellers and gets the negotiations off on the wrong foot.
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 resale, really isn’t a bargain at all. Be smart!
OTHER ARTICLES of INTEREST