Dare I say that that the Lake Norman real estate market is on a bit of a roll AND overall prices may have bottomed out? July was only the second month this year that our closed sales have exceeded those of last year and the second month in a row with some relatively strong numbers of new contracts (Conditional, Active Due Diligence Pending sales). While we dropped from last month’s 100 closed sales by 17% it looks like we will have a decent summer season compared to a very weak start to 2011.
Here are July numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some interesting statistics for you:
- Only 18.5% of our closed sales were either Foreclosures (REOS) or Short Sales compared to 25% last month and 27% in May.
- 33% of our closed sales were waterfront homes.
A closer look:
- The number of Active Listings in Lake Norman remains well below last year’s and is continuing to drop. Our absorption rate/months of supply of active listings increased a bit to 13.7% after our low of 12.6 months. ( May had jumped back up to 20 months due to the drop in closed sales. In April we had 14.5 months). Unfortunately, a goal of a truly balanced housing market of 6-8 months of supply is still out of reach in our Lake Norman area (MLS area 13). If we can sustain this high number of sales then I think we can ponder whether in fact we have truly hit bottom. However, it is more likely that we will see the erratic ups and downs for sales in Lake Norman though the end of 2011. Note that the average price of our active listings dropped 8% compared to July 2010. We continue to see a number of price reductions.
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home)which don’t account for a signifcant segment of our housing market, remain fairly low most likely because sellers are unwilling to take on the risk of waiting for the buyer’s home to sell before closing.
- The combined total of Conditional Sales and our new “Due Diligence” category increased 46% this month when compared to July 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 late August/September. These are the numbers that give me the most encouragement as they indicate our current pace of Lake Norman home sales may be sustained through early fall at least. (Please note that I decided to separate Conditional from the new Active Due Diligence category because it has become increasing difficult to provide good insight into the average prices and days on market).
- Our Lake Norman Pending sales are slightly above July 2010. 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. As I anticipated last month our July sales dropped from the June highs but it looks like we will remain in the 80 sales per month range for August and September.
- The number of closed home sales in Lake Norman were 4% above July 2010’s after several months in the negative figures. One important note: The average price of homes sold were 4% higher than July 2010.
The total number of Lake Norman single family homes under contract (but not yet closed) on July 31, 2011 was an encouraging 193 compared to June 30th’s 178. May 31st increased to 199 after falling in April to 173. On March 31, 2011 we had 195 compared to February 28th’s 163 and January 31st’s 142. Last July we had only 157 which is another indication that the next few months will be stronger than 201o. Good news!
Here is a breakdown by price-range of our June 2011 closed sales in Lake Norman’s area 13- to 13-5:
- $20,000 – $199,999: 12
- $200,000 – $299,999: 16
- $300,000 – $399,999: 10
(These price ranges represented 45.7% of July ‘s total sales compared to June’s 49.5%)
- 400,000 – $499,999: 15
- $500,000 – $599,999: 9
(These price ranges represented 29 % compared to 23.2% last month)
- $600,000 – $699,999: 6
- $700,000 – $799,999: 5
- $800,000 – $899,999: 3
- 900,000 – $999,999: 2
(Solds for $600,000 – $1mill = 19% compared to 14.7% last month)
- $1,000,000 – $1,999,999: 4
- $2 million+ : 1
(Solds $1million+ = 6% compared to 12.6% of June’s total sales)
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, 2010 and 2011 and the totals in the prior calendar years. 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 by month for the past 7 years. As you can see, our July sales were higher than 2010 but the second lowest in 7 years. However, look at the weak numbers we are up against in the next 5 months. It looks like we will exceed these at least for August and September.
Up until now I have felt that our overall Lake Norman housing prices have been consistently trending downward. Lake Norman did not see increases in home prices after the first dip in 2009 as did much of the country. However, I think we are now evolving into a market where Lake Norman home prices, especially of waterfront properties, are erratic but I am simply NOT seeing the “screaming bargains” that we saw in the past few years. As I said last month, I personally feel that overall our home prices may in fact have hit bottom. The ability to find more “screaming bargains” will depend on how many more distressed homes come on the market. The fact that distressed properties only accounted for 18.5% of July’s sale shows how this portion of the Lake Norman real estate market continues to shrink. My guess is that while they will continue to exist they will no longer dominate our market. My advice to Lake Norman home buyers at this point is to look for homes that are relative bargains and not wait for the screamingly low ones. It is not uncommon to see good properties that are slightly overpriced sit on the market but once they are reduced just a bit they sell and may even experience multiple offers.
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