Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s January 2019 Market Report

Lake Norman Real Estate's January 2019 Market Report

All data is from the Carolina Multiple Listing Service.

Lake Norman’s real estate market started 2019 with encouraging signs that we have turned a corner after a rough end to 2018. Our January sales are down just 1% as of today compared to last year but we are likely to get a couple more stragglers reported so I think we will end up matching last year’s sales. January sales were down 21% compared to December’s but January is historically our slowest month of the year for closed sales so this was expected. 96 sales is the 5th best January since 2005. My numbers below should provide some deeper insight into where we are headed as well as details regarding this month’s sales.

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 started out 2019 at about the same pace as 2018. That said, average prices are lower across the board and 75% of our sales in January were under $600,000
  • Our inventory of active listings is even lower than last year’s. (26 fewer than last year). Every single month for several years we have seen a decline in active listings. It is hard to quantify but there is no doubt that our low inventory has had a negative impact on our Lake Norman’s home sales.
  • Our newest contracts (UCS) are UP 12% and pending sales (UCNS) are up 3% which further substantiates that we are starting the year off with a modest upswing.
  • Waterfront homes moved back to a buyer’s market and the under contract numbers indicate this niche will be weak for the next few months.
  • Is new construction taking on an increasing share of our market?  They are now 40% of our new contracts!

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes moved back into a buyers’ market in January as the months of supply rose to 8.2 after dropping to 5.8 months in December from 7.6 in November, 7.13 in October, 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 January represented only 28.1% of Lake Norman’s total sales while comprising 32.4% of our active listings and only 19% of our under contract listings.
    • The average price per square foot of our waterfront homes rose slightly to $248.29 from last month’s $241.43 but still below November’s $278.33, October’s $248.70, September’s $256.64, August’s $248.18 and July’s $262.05.
    • It took on average 164 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.
  • Only 19 new construction homes closed in January through our MLS but an impressive 107 are under contract which represent 40% of all of Lake Norman’s homes under contact/pending today.  And, of course, 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 99%. However, 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.  The average sales price in January was only $378,510.  The months of supply of active listings using January’s sales rose to 9.9 months. However, based upon our under contract numbers, it looks like we are closer to a balanced market than this number indicates.
  •  There were 4 distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in January.  We have only 3 under contract and 6 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 50% of Lake Norman’s January’s single family home sales were under $400,000. Wow!
  • 66.7% of Lake Norman home sales in January were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 268.  This is 9.8% MORE than last year’s and an impressive 18% higher than 2017’s 227.  This is the second month in a row where we have seen increases in these numbers over prior years. As I wrote last month, “while we may not have a stellar January (which we didn’t) it does bode well for February”.  And, today I would add March as well.  Increasing numbers of new contracts is certainly an indication of some momentum.  How long it lasts is the big question!

A closer look at the chart:

  • The number of Active Listings as of today in Lake Norman is down 4% compared to last year’s at this time.  Today we have only 686 single family homes for sale in all of Lake Norman which is up slightly from last month’s low of 653 but not enough. Our absorption rate/months of supply of active listings is back up to 7.1 but keep in mind that January sales are the lowest of the year so we should move back into a balanced market next month.  Lake Norman as a whole is leaning more in favor of buyers but I don’t expect this to last if we continue our upward trend in new contracts. 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 down 4% and the days on market is down 18%.  (So homes for sale have been on the market 27 fewer days than last year).
  • Under Contract Show (conditional) sales are UP 12% from this time last year’s.  The average price of our new contracts is down 21% and the days on market is down 18%. 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 closed sales in March/April.
  • Pending/Under Contract No Show sales are up 3% compared to last year’s.  The average price of our pending sales is down 12% and these listings/sellers successfully negotiated a purchase contract 20% 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 March.
  • Lake Norman’s closed January home sales in our MLS as of today and as stated above, were just about equal to last January’s.  The average price of our homes sold was down 5%. It took on average 12 days longer to sell a home in January 2019 vs 2018.

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

  • February 8th, 2019: 268
  • 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

Here is a breakdown by price-range of our January 2019 closed sales in all of Lake Norman:

  • $1,000 – $99,999: 2+
  • $100,000 – $199,999: 4
  • $200,000 – $299,999: 24
  • $300,000 – $399,999: 19

        (These price ranges represented 50% of our January home sales)

  • $400,000 – $499,999:  15-
  • $500,000 – $599,999:  9-

       (These price ranges represented 25% of our January sales)

  • $600,000 – $699,999: 7
  • $700,000 – $799,999: 1–
  • $800,000 – $899,999: 5
  • 900,000 – $999,999: 3+

       (These price ranges represented of 16.5% our January sales,  20.7% of our December sales, 21.1% of 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:  6–
  • $1,500,000 – $1,999,999: 0–
  • $2 million+ : 1+

       (These $1 million+ sales represent 7.3% of our January sales, 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 January our only standout price ranges were those under $100,000 and the $900,000’s. January was all about our lower price ranges with 50% of all of our sales under $400,000 and 75% under $600,000!  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

Well, what can I say about our luxury market in January?  Representing only 7.3% of our total closed sales, they clearly lost the momentum of the past few months. We did have 3 sales in the $900,000 and 1 sale over $2 million which represented the bright spots of this niche. I can’t wait to see how the high-end homes perform as we hit our stride in a few months.

Lake Norman’s Waterfront Homes

As I wrote above, waterfront homes moved back into a buyers’ market in January as the months of supply rose to 8.2 after dropping to 5.8 months in December from 7.6 in November, 7.13 in October, 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 January represented only 28.1% of Lake Norman’s total sales while comprising 32.4% of our active listings and only 19% of our under contract listings.
  • The average price per square foot of our waterfront homes rose slightly to $248.29 from last month’s $241.43 but still below November’s $278.33, October’s $248.70, September’s $256.64, August’s $248.18 and July’s $262.05.
  • It took on average 164 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 home sales by month and year 2019 - 2005

* 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.

Wow, I have added another column as we begin our 15th year of this annual sales chart! I love being able to see this overview which puts our current sales in context with prior years and provides monthly trends to help better understand Lake Norman’s seasonal trends, peaks and valleys. Our first month of 2019, while below December’s numbers, is traditionally our lowest month of the year so 96 is actually quite respectable.  Adding to this our strong under contract numbers and it looks like we are bouncing back from our drop in the fourth quarter.

Summary and My Insight

Good signs/news for 2019:

  • Interest rates have slipped back down and the Feds did not raise their rates in their most recent meeting. This should help the affordability of homes for some buyers who are on the fence.
  • New contracts are UP for the second month in a row after three really tough fall months.
  • The number of distressed homes for sale is still extremely low so they still don’t play any perceptible role in our Lake Norman housing market.
  • Despite the very low inventory of active listings, overall we were able to match last January’s sales so we may be moving back into a seller’s market once we hit our peak months.
  • Buyers are in the driver’s seat in some price ranges yet our new contracts indicated homes are selling faster than last year so don’t waste time!
  • New construction has definitely hit its stride. Now comprising 40% of our new contracts, it is clear that there is enough desirable inventory to fill in the gap of our shortage of resale homes. If you drive around Lake Norman it feels like large, lower priced communities as well as custom and smaller groups of spec homes are popping up all over. 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 2019:

  • There is no doubt that 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, the potential for rising interest rates and a downward trend of the national 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 construction.  Of course, the alternative is to drop their sales price but most buyers here are not willing to buy a home 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 4th 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 seven 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 14 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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