Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s December 2018 Market Report

Lake Norman real estate market report

All data is from the Carolina Multiple Listing Service.

Lake Norman’s real estate market ended the year with a thud after setting record high sales for much of the year. Our December sales were down 30% compared to last year but were 9% above last months extremely low sales. This was only the 6th best December since 2005. No matter what factors have contributed to our weakening housing market, we have been battered since September.  How will Lake Norman’s housing market fare in 2019?  My numbers below should provide some deeper insight.

Here are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • Our Lake Norman home sales were down for the fourth consecutive month and we ended 2018 down 5.6% compared to 2017.
  • Our inventory of active listings remains historically low, (44 fewer than last year), as they have been all year.  It is hard to quantify but there is no doubt that the low inventory does have a negative impact on our Lake Norman’s home sales.
  • Our our newest contracts (UCS) are UP for the first time in 4 months!  While January may not post strong numbers due to the low pending numbers we may actually see a slight improvement in February.
  • Waterfront homes moved back to a balanced market slightly favoring sellers.
  • Overall our average price in 2018 was 6.8% higher than 2017, our median price was up 4.1% and our price per-square-foot rose 3.5% in 2018
  • I want to share with you again this great interactive calculator for determining rent vs. own costs from the New York Times!

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes have returned to a balanced market slightly favoring sellers as December’s months of supply dropped back down to 5.8 months from 7.6 last month, 7.13 in November, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in December represented 30.5% of Lake Norman’s total sales while comprising 32.8% of our active listings and only 21.3% of our under contract listings.
    • The average price per square foot of our waterfront homes dropped to $241.43 from last month’s $278.33, October’s $248.70, September’s $256.64, August’s$248.18 and July’s $262.05.  While last month’s high was an anomaly due to several very high sales, December’s is the lowest this year.
    • It took on average 109 days for a waterfront home to sell and they sold for 95% of their listing price.
    • It is important to note that the average price per-square-foot for our waterfront homes has still not returned to 2007’s peak of $283.16.
    • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.
  • 32 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. The average listing price vs sales price of new construction single family homes was 100%. Once again it looks like new homes are selling at full price. That said, always give negotiating a try and don’t forget to ask builders for all of those great upgrades as they usually prefer upgrades over price reductions. We currently have 97 new construction homes under contract in the MLS which is equal to last month’s. The average sales price in December was $457,490.  The months of supply of active listings based on December’s sales dropped back down to 5.8 which puts them in a balanced market slightly favoring the builders.
  •  There were NO distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in December.  We have only 5 under contract and 8 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 40.5% of Lake Norman’s December’s single family home sales were under $400,000.
  • 56.2% of Lake Norman home sales in December were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 225.  This is 9.2% MORE than last year and an impressive 23% higher than 2016’s 183.  This is the first positive sign we have seen for our overall Lake Norman housing market in 4 months. While we may not have a stellar January it does bode well for February.

A closer look at the chart:

  • The number of Active Listings as of today in Lake Norman is down 6% compared to last year’s at this time.  Today we have only 653 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings dropped back down to 5.4.  Lake Norman as a whole is leaning more in favor of sellers which is due at least somewhat to the very low numbers of active listings. Keep in mind, however, within specific price ranges there are dramatic swings from a buyer’s market to a balanced to a seller’s market.  The average listing price of active listings is up 2% and the days on market is down 16%.  (So homes for sale have been on the market 25 fewer days than last year.
  • Under Contract Show (conditional) sales are UP in impressive 20% from this time last year’s.  The average price of our new contracts is down 2% and the days on market is up 5%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent higher future closed sales in February/March.
  • Pending/Under Contract No Show sales are down a substantial 16% compared to last year’s.  The average price of our pending sales is down 32% and these listings/sellers successfully negotiated a purchase contract 7% faster 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 this month or early February.
  • Lake Norman’s closed December home sales in our MLS as of today and as stated above, were 30% below last December’s but 9% higher than last month’s.  The average price of our homes sold was up 19%. It took on average 12 fewer days to sell a home in December 2018 vs 2017.  Despite very low numbers of sales, what did sell sold more quickly than last year.

The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:

  • January 6, 2019: 225
  • December 6, 2018: 251
  • November 8, 2018: 255
  • October 8 2018: 281
  • September 8, 2018: 310
  • August 8, 2018: 347
  • July 8, 2018: 345
  • June 8, 2018: 406
  • May 8, 2018: 389
  • April 8, 2018: 334
  • March 8, 2018: 280
  • February 8, 2018: 244
  • January 8, 2018: 206
  • December 8, 2017: 264
  • November 6, 2017: 282
  • October 6, 2017: 301
  • September 6, 2017: 346
  • August 6, 2017: 364
  • July 6 2017: 350
  • June 6, 2017: 370
  • May 6, 2017: 391
  • April 6, 2017: 351
  • March 6, 2017: 295
  • February 6, 2017: 227
  • January 6, 2017: 183

Here is a breakdown by price-range of our December 2018 closed sales in all of Lake Norman

  • $1,000 – $99,999: 0
  • $100,000 – $199,999: 5-
  • $200,000 – $299,999: 23++
  • $300,000 – $399,999: 21-

        (These price ranges represented 40.5% of our December home sales)

  • $400,000 – $499,999:  19-
  • $500,000 – $599,999: 12+

       (These price ranges represented 15.6% of our December sales)

  • $600,000 – $699,999: 8+
  • $700,000 – $799,999: 9
  • $800,000 – $899,999: 6
  • 900,000 – $999,999: 2-

       (These price ranges represented of 20.7% our December sales, 21.1% our November sales, 20.7% of our October sales, 25% in September, 21.1% in August sales,  23.6% in July, 19.1% in June, 19.9% in May, 21.1% in April,12.7% in March, 14.3% in February, 20.4% in January)

  • $1,000,000 – $1,499,999: 12+
  • $1,500,000 – $1,999,999: 4+
  • $2 million+ : 0-

       (#Solds $1 million+ =  13.2% of our December sales, 14.7% of our November sales, 6.7% of our October sales,  12.3% in September, 10.8% in August, 6.2% in July, 8.1% in June, 9% in May, 11.2% in April, 7.4% in March, 8.9% in February, 7.1% in January, 6% in December 2017, 7.86% in November, and 7.8 % last October.)

In my opinion, this price range breakdown is one of the most important resources in my market reports because it goes deeper to define our specific strengths and weaknesses each month. In December our standout price ranges were the $200,000’s, $500,000’s, $600,000’s, and $1,000,000 – $2,000,000’s. Clearly this past month our strong sales were scattered throughout our price ranges.  However, our luxury market had another good month. As I have said so many times, with our Lake Norman real estate market you really need to know specifics about your price niche because there is such disparity within price range sales trends.

Higher-end home sales in Lake Norman

Interesting! Another strong showing for home sales in our $1 million price range.  We did lack any sales at or above $2 million so the hot price ranges are a bit lower.  At 13.2%, they represented the second highest percentage of our overall sales for the past year! Granted, overall our sales were low so it will be interesting to watch this niche as we enter 2019.

Lake Norman’s Waterfront Homes

As I wrote above, waterfront homes have returned to a balanced market slightly favoring sellers as December’s months of supply dropped back down to 5.8 months  from 7.6 last month, 7.13 in November, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in December represented 30.5% of Lake Norman’s total sales while comprising 32.8% of our active listings and only 21.3% of our under contract listings.
  • The average price per square foot of our waterfront homes dropped to $241.43 from last month’s $278.33, October’s $248.70, September’s $256.64, August’s$248.18 and July’s $262.05.  While last month’s high was an anomaly due to several very high sales, December’s is the lowest this year.
  • It took on average 109 days for a waterfront home to sell and they sold for 95% of their listing price.
  • It is important to note that the average price per-square-foot for our waterfront homes has still not returned to 2007’s peak of $283.16.
  • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.

Annual Sales by Month

Lake Norman real estate sales market report

 

* Please note that all of my numbers are for single family homes in what used to be referred to as “Area 13 – Lake Norman. 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. ***Our MLS just merged with two other’s so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that this year’s numbers will be comparing apples to apples. However, I am not going to go back to prior years and adjust.

Another year is in the books! What a fascinating look above at our highs and lows for the past 14 years.  Thanks to our dramatic drop in sales for the past four months, our total sales for 2018 ended up 5.6% LOWER than 2017. That said, 2018 will still be the second highest year of single family home sales in Lake Norman since 2005. It is important to remember that 2017 was a record breaking year for Lake Norman’s housing market so being close to its numbers in 2018 is certainly respectable. With our high number of new contracts we may start to see some stronger closed sales in early spring.

Summary and My Insight

Good signs/news for 2018:

  • New contracts are UP for the first time in 4 months
  • The number of distressed homes for sale are still extremely low and they still don’t play any perceptible role in our Lake Norman housing market.
  • Despite very low inventory of active listings overall we are in a balanced market favoring neither buyers nor sellers.
  • Buyers are moving into the driver’s seat in some price ranges yet homes are still selling faster than last year.
  • Multiple offers are still possible in nearly all price ranges and even in our waterfront properties if a property is particularly special.
  • New listings in the lower price ranges that are in great condition and in desirable locations may sell with multiple offers within days of hitting the MLS.
  • Move-in condition, updated listings in the trade-up price ranges and homes on exceptional waterfront lots are also selling quickly.  (Note our days on market numbers in the top chart.)
  • New construction feels like it is everywhere. 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 and good buildable lots. Note that lumber prices are sky high which is causing construction costs to go up as well.
  • Our overall future is very positive. People are still moving to Lake Norman from all over the country to escape high taxes and cost of living, extreme weather, and myriad other reasons in order to enjoy our beautiful area, mild (?) 4 seasons, vibrant communities and better quality of life.

Challenges/Weaknesses for 2018/2019:

  • With 2018 in the books we ended up 5.6% below 2017’s exceptional numbers which was due to an abysmal last 4 months.
  • Record-breaking low inventory of active listings continues to provide a headwind for our Lake Norman housing market.
  • Consumer confidence may be weakening due to recent hefty drops in the stock market, rising interest rates and a national downward trend of the housing market.
  • Much of our housing inventory is becoming more and more dated so it will be incumbent upon sellers to do more significant updating and staging to compete with new homes.  Of course, the alternative is to drop their sales price but most buyers are not willing to buy a home here that needs a lot of work.
  • Finding the perfect home can be challenging. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are still selling quickly despite our slower market.
  • 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.   See my price range analysis for the 3rd quarter of 2018.   
  • Economists are projecting that the 2019 US housing market will be a calmer and steady market. The crazy markets like San Francisco are predicted to experience a marked slowdown while steady markets like Charlotte should remain stable.

Final thoughts: 

As I wrote the past six months:

My family moved to Lake Norman from California in 2005 seeking a better quality of life and a lower cost of living.  I have watched our area grow immensely over the past 13+ years. There is no doubt that Lake Norman is still a very appealing destination for folks from all over the country. We now can compete with many trendy cities throughout the country with our amazing number of new restaurants, breweries, entertainment and job growth.  But, with this growth has come increased traffic which is now just a fact of life on I-77. With the passing of time, our pre-recession “new” homes are now a bit dated and will be needing new HVAC sysems, water heaters and roofs. With a complete halt to new construction during the recession years we are now lacking the number and type of homes that appeal to many of today’s buyers.  For this reason new construction and remodeled homes are selling more quickly than ever.  It is more of a challenge for our “dated” homes and subdivisions where open floor plans are rare and kitchens and bathrooms are in less appealing woods and materials.  The result has been the need for sellers to do updating before listing and buyers, especially waterfront, need to be more willing to do remodeling after they purchase IF they found a home on a great waterfront lot or in a great location. Today, the bottom line comes down to price, location, condition, updates and proximity to desired amenities.

Buyers today need to know their price range’s.  Are they in a buyer’s or seller’s market? No matter what, be prepared to act fast when an exceptional new listing that has been updated comes on the market. Or, if you want a more affordable option in any price range, be prepared to be more flexible.  This means a willingness to do your own updating if you can’t afford an updated home, and, if possible, be more flexible about locations based upon our limited inventory.  At the same time, if you really love the home, be aggressive with your offer! Come in high and with very clean terms. My Mantra as always: Don’t focus just on the price but also 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!  

Sellers, while our lack of inventory may help, you may have work to do!  Watch a lot of HGTV and, if possible, be prepared to do painting, new flooring, painting kitchen cabinets white when feasible and staging to attract buyers. Your efforts will pay off with quicker selling times and higher sales prices.  I listed and sold another home with multiple offers which can be completely attributed to the renovations and staging.  How do I know this?  The seller had it listed last year in it’s dated condition with no staging and it sat on the market.  We sold it after updating and staging for about $20,000 above where they were before! Also, remember that buyers can be reluctant to buy a home knowing they will need to replace a roof, the AC and heating etc. in the first few years they are living there so, if possible, put on that new roof, replace the HVAC units while you are updating.  ALWAYS offer home warranty plans to buyers!

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