As I anticipated last month, based upon the low numbers for Conditional and Pending home sales in our Lake Norman area, January turned out to be a rather bleak month for Lake Norman home sales. However showings and new contracts have, in fact, picked up since the beginning of the year despite our weather!
A closer look:
- The number of Active Listings continues to shrink, dropping 15% from a year ago. We did NOT see a lot of new listing after the holidays as we normally do which is a positive step towards our recovery. However, due to our low January closed sales, our months of inventory (absorption rate) jumped back up to 23 months. Our goal of a truly balanced housing market of 6-8 months of supply is still out of reach. Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. Despite this set back, it is very good news that our inventory is continuing to shrink to record lows each month. Note that the average price of our active listings dropped 5% compared to November 2009. We continue to see a number of price reductions.
- Contingent Sales, which don’t account for a signifcant segment of our housing market, increased by333% compared to last year but remain about the same as last month. This may be a result of very anxious sellers during the winter who are willing to accept an offer with a buyer’s contingency to sell another home.
- Conditional Sales (and our new “due diligence” catagory) increased 24 % this month when compared to January 2010. These are homes that just went under contract and still have financial and inspection conditions. They represent potential future closed sales most likely in March or even April. This increase would indicate that the sales in Lake Norman, after a possibly flat February, will experience some improvement in March or April.
- Our pending sales represented a 9% decrease from a year ago. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. These numbers would indicate that our closed sales this month will be slightly lower than February of 2010.
- The number of closed sales dropped by 13% compared to 2010 but our average price was up 22%. It is also interesting to note that approximately 33% of our January sales were “distressed sales”. (Foreclosures, shortsales). This is good news as it means that we are getting these properties out of our inventory.
The total number of Lake Norman single family homes under contract (but not yet closed) on January 31, 2010 totaled 142 compared to December 31st’s 141, to November 30, 2010’s 169, to August’s and July’s numbers of 157, and to June’s 169. After ending 2010 on a high note it looks like our first quarter of 2011 will be disappointingly soft.
Here is a breakdown by price-range of our December 2010 closed sales in Lake Norman’s area 13- to 13-5:
- $22,000 – $199,999: 6 (Conditional, Cont & Pending =21 )
- $200,000 – $299,999: 7 (Conditional, Cont & Pending = 33)
- $300,000 – $399,999: 16 (Conditional, Cont & Pending = 22)
- (Solds were 63% compared to 57% last month)
- 400,000 – $499,999: 5 ( Conditional, Cont & Pending = 13)
- $500,000 – $599,999: 4 ( Conditional, Cont & Pending = 11)
- (Solds were 20% compared to 19% last month)
- $600,000 – $699,999: 2 ( Conditional, Cont & Pending = 13)
- $700,000 – $799,999: 1 ( Conditional, Cont & Pending = 5)
- $800,000 – $899,999: 0 ( Conditional, Cont & Pending = 7)
- $900,000 – $999,999: 2 ( Conditional, Cont & Pending = 4)
- (Solds for $600,000 – $1mill = 11% compared to 20% last month)
- $1,000,000 – $1,999,999: 3 ( Conditional, Cont & Pending = 13)
- $2 million+ : 0 ( Conditional & Pending = 0)
- (Solds $1million+ = 6% compared to 11% last month)
- (Total Conditional, Contingent and Pending = 142)
In December, 57% of our Lake Norman home sales were under $400,000 and 76% were under $600,000 so clearly our lower price ranges gained market share in January. However, the trend, based upon our properties currently under contract, is improving for trade-up prices ranges again with the exception of the $2 million+ luxury home market which remains stagnant.
7-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 also adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Above is a snapshot of Lake Norman home sales numbers in the context of the past 7 years. As you can see, our January sales were lower than last year’s and were only an improvement over our very weak 2009 sales.
It looks as if this month will just about match February of 2010 rather than show a double-digit increase as we experienced in November and December. March is going to be a key month to watch as many Lake Norman real estate agents and home owners are expecting our typical Spring bump to hit in March. The big question is will we see a lot of new inventory? For the sake of our Lake Norman housing market, I hope not!
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