Lake Norman’s strong January home sales increased our streak to 13 months in a row where we exceeded sales from the same month in the prior year and all years since 2008. Our Lake Norman real estate market is very active for what are traditionally our slowest months of the year. However, there is a caution in these numbers because nearly three-fourths of our sales last month were under $400,000. Our Lake Norman housing market has some strengths which make us look good over all but there are some very weak price ranges as well.
Let’s take a closer look at the numbers to glean some insight into the short term future and exactly where the Lake Norman housing market stands right now.
Here are the January 2013 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
* Note that the Charlotte Regional Multiple Listing Service has created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replace the Contingent, Conditional and Pending categories. Contingent Sales are now joined with Conditional sales in my reports.
Some significant additional statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 29% of our total sales up slightly from last month and about equal to January 2012 when they represented 31% of our Lake Norman single family home sales. The average price for distressed sales was $442,071 indicating that these sales are primarily in our very lowest price ranges. Distressed active listings currently make up only 6.92% of our inventory of Lake Norman homes for sale. Clearly we are not being bombarded by foreclosures and shortsales as some had predicted. While buyers are looking for bargains they simply don’t exist in the numbers we experienced in the past several years and are now primarily in the lowest price ranges.
- 30% of our closed sales were waterfront homes which was about equal to the past several months. The average sales price of waterfront homes in January was $704,020 or $199 per square foot.
- We had 5 new construction homes sold compared to only 2 in .January of 2012. It is important to note that many of the new construction homes you will see driving around the lake are custom homes so will not be included in our Multiple Listing Service numbers. I counted 11 single family homes under construction on Barber Loop on the Brawley School Rd. peninsula alone!
- 71% of Lake Norman’s January home sales were under $400,000 compared to 61% last month.
- A whopping 81% of our January home sales were under $500,000 compared to 74 % last month, 75% in November, 67% in October, 70% in September, 66% in August, 60% in July, 72 % in June, 70% in May, 49% in April, 61% in March sales. Clearly our lower price ranges are still dominating our Lake Norman housing market.
- Our “Under Contract Show” AND “Under Contract No show”/Pending numbers were up substantially from last January (41% and 50% respectively, see chart above). This serves as further support that our Lake Norman’s housing market is maintaining the strong upswing of sales we enjoyed in the entire year of 2012 and that our late winter sales will remain relatively robust.
- As of today, the number of active listings for all of Lake Norman total 756, up from 708 last month but down from 790 in November, 834 in October, 876 in September and are 8% lower than the same time last year. Considering how low our number of active listings in Lake Norman have been for about a year, I am actually surprised to see they are still dropping. I do see more homes coming on the market but only about enough to match our sales. To put this number in even greater context, back in June of 2008 we had 1789 active listings!
A closer look:
- The number of Active Listings in Lake Norman dropped 8% from last month’s. Our absorption rate/months of supply of active listings on February 1 was 10.8 up from 7.8 last month. While this puts our market temporarily above our goal of a balanced 6-8 months of supply in the Lake Norman area (MLS area 13), January is historically our smallest number of home sales so I expect to see this number come back down in the next few months. Back in January of 2009 we had a 52.5 months of inventory!
- Conditional Sales, which are now called Under Contract Show, increased for the twelfth month in a row, this time by an incredible 41% compared to last year. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late February/March. Based upon these numbers we should see relatively strong closed sales in the next few months.
- Pending/Under Contract No Show sales were a whopping 50% higher than January 2012’s. These are the contracts that are past inspections and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Given that we had 97 pending sales last month as well I am pretty confident that we will exceed last February’s 59 closed sales substantially. Not only a great way to start the new year but a continuation of our remarkably CONSISTENT sales growth after so many years of erratic ups and downs.
- The number of closed home sales in Lake Norman in January 2013 were an impressive 44% above January 2011’s and the best January since 2007. Once the few additional belated sales are reported to our MLS I think we will most like have at least 70 sales. While our Lake Norman home sales slowed since the seasonal summer peak they haven’t fallen off as much as we have seen in past winters.
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- February 7, 2013: 219 (Up from the past two months and 18.7% higher than last beginning of February’s 2012 numbers)
- January 6, 2013: 184
- December 6, 2012: 197
- November 7, 2012: 214
- October 8, 2012: 218
- September 6, 2012: 206
- August 6, 2012: 228
- July 6, 2012: 234
- June 6, 2012: 235
- May 7, 2012: 246
- April 1, 2012: 227
- March 1, 2012: 178
- February 1, 2012: 155
- January 1: 134 (the lowest ALL year)
Here is a breakdown by price-range of our December 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $30,000 – $199,999: 7
- $200,000 – $299,999: 23
- $300,000 – $399,999: 19
(These price ranges represented 71% of January’s sales.)
- 400,000 – $499,999: 7
- $500,000 – $599,999: 2
(These price ranges represented 13% of our sales)
- $600,000 – $699,999: 3
- $700,000 – $799,999: 2
- $800,000 – $899,999: 2
- 900,000 – $999,999: 0
(Solds for $600,000 – $1mill = 10.1% )
- $1,000,000 – $1,499,999: 2
- $1,500,000 – $1,999,999: 1
- $2 million+ : 1
(Solds $1million+ = 5.8%)
The most improved price range was the $200,000 – $299,999. With a whopping 71% of our sales under $400,000 it is clear that for the most part only our lowest priced homes are actually doing well. The trade-up price ranges from $500,000 to $1 million are terribly slow!
Higher-end home sales in Lake Norman
Sales in the $500,000- $999,000 range remain slow all over Lake Norman as they have been for most of 2012. In my opinion the good waterfront bargains in the $600,000s peaked two years ago and in the $700,000-$900,000 last summer. Of our 219 homes currently under contract, only 11 are $700,000- $999,000 and 13 are above $1 million.
9-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.
Summary and My Insight
- Lake Norman is experiencing consistently higher closed sales as well as evidence that prices have not only stabilized by are actually increasing in some cases. Our average price of closed sales increased 4% last month.
- Lake Norman’s inventory of homes for sale remains low.
- The number of properties currently under contract indicates that our Lake Norman housing market will sustain our strong closed sales numbers for the next several months.
- The number of distressed homes for sale represent only 6.9% of our overall inventory…clearly no longer playing a significant role in our housing market.
- New construction is back! Not only did we sell 5 new homes last month but as I drive and cycle around I am amazed at how many new construction homes are breaking ground.
- Serious home buyers are out looking around all of the Lake Norman area. Properly priced listings in very good condition are selling more quickly and sometimes with multiple offers even in our $1 million+ price ranges.
- Interest rates remain low despite ticking up a bit and are predicted to remain low in 2013.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Positive national housing reports and economic analysis continue to headline news about the US housing market both now and predictions for 2013.
- Our mid to higher-end property sales are still inconsistent and relatively weak despite some recent activity. We clearly have an unbalanced housing market right now with our lowest priced homes dominating our sales.
- I am concerned that both potential home sellers and Realtors are overly optimistic about our Lake Norman housing market and may fall into our old trap of overpricing listings and having unrealistic expectations of the value of their homes/listings which dominated our weakest years in the past. Sure, our market is improving, but our prices are not going up that much that quickly. When presenting offers these past several weeks I heard from more than one seller/agent that they are sure that they will get their high price once we hit the historically hot spring market. I am not convinced that this will be true.
- With a shrinking inventory of active listings, buyers have fewer options. There aren’t that many “good” homes on the market so buyers are watching the new listings and jumping on most of the good ones if they are priced properly.
- Home loans, especially jumbo and construction loans, are still a very challenging process, particularly underwriting and appraisals.
- Global economic turmoil and US economic uncertainty continue to reign in consumer optimism and the confidence of potential home buyers to a certain degree although not to the extent as last year.
My advice to Lake Norman home buyers remains this: Look for homes that are in good locations and have most of the priorities on your list. 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 it is a good time to buy. With less than 8% of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale to come along at an unrealistic price. If you insist on low-balling, at least have some comparable sales to justify your number. 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!
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