Lake Norman’s July 2012 residential real estate numbers once again exceeded all prior July’s since 2007 and my own predictions as well. All 7 months of 2012 have been strong but the past 3 months have been exceptional when compared to the past 4 years. Triple digit sales for three months with signs that August will make it 4 is good news. Gone, for now at least, is the term “erratic” which I have been using regularly for several years when describing our Lake Norman real estate market. While I expect a seasonal slowdown, at this point it looks like our Lake Norman real estate market is over the hump and moving into sustained positive territory. As always a few more agents will be late in recording their sales so when all the numbers are for July we should have recorded at least 115.
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 July 2012 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 interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised only 21.6% of our closed sales. The price range of these distressed sales was $22,500 – $2,430,000. Our percentage of distressed active listings dropped to 6.0% from 6.4%.Our number of distressed properties continue to drop which is very encouraging. We are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted.
- 28.8% of our closed sales were waterfront homes which is about average for this year.
- 50 % of Lake Norman’s July home sales were under $400,000 compared to 56% last month.
- 60% of our July home sales were under $500,000 compared to 72 % in June, 70% in May, 49% in April, 61% in March sales. While our lowest price ranges are continuing to dominate our market, we saw some improvement in a few higher price ranges in July. (See more below).
- With the exception of Conditional listings, our average prices were down all the way across the board. (See chart above). While this may seem bad, it indicates to me that our prices are bottoming out, not just that our lowest priced listings are driving this market upswing.
- Our average days a home is on market were down for the most part as well. Properties are selling more quickly.
- As of today, the number of active listings for all of Lake Norman totaled 966 so they have begun to decline after a peak several months ago which is a typical seasonal trend here in Lake Norman. They are also 15% below July 2011’s. 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 are about equal to last month’s and are 15% lower than June 2011. Our absorption rate/months of supply of active listings stands at 8.7. Our shrinking inventory and rising sales have brought us so close to a balanced 6-8 months of supply in Lake Norman area (MLS area 13). But, with a seasonal slowdown of the number of monthly sales in the months ahead I expect this number to trend upward in the fall. That said, to be this low for three months in a row is an incredible achievement for our Lake Norman housing market which at one time had 52.5 months of inventory!
- Conditional Sales, which are now called Under Contract Show, increased for the seventh month in a row, this time by 27% 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 August/September/October. Based upon these numbers our closed sales this month will be slightly lower than last month’s but should be the best August since 2007. At a time when I expected a seasonal slow down our sales activity remains very active.
- Pending/Under Contract No Show sales were 19% higher than July 2011’s. These are the contracts that are past inspections and are just waiting to close and are usually the best indication of closed sales in the next few weeks. Given that we had 107 closed sales last August we will most likely beat this unusually high August sales number which is excellent.
- The number of closed home sales in Lake Norman in July 2012 were 28% higher than July 2011’s.
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- August 6, 2012: 228 (slightly lower but look at last July’s below!)
- 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)
- December 1: 147
- November: 169
- October: 193
- September: 183
- August: 193
- July: 178
- June: 199,
- May: 173
- April 195,
- March: 163
- February: 142
We have clearly experienced a marked increase in sales so far in 2012 after a lag at the end of 2011. This uptick in sales coupled with our low inventory bode well for the overall health of the Lake Norman housing market.
Here is a breakdown by price-range of our June 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $22,5,000 – $199,999: 18
- $200,000 – $299,999: 21
- $300,000 – $399,999: 17
(These price ranges represented 50.4% of July sales compared to 56.5% of June sales)
- 400,000 – $499,999: 11
- $500,000 – $599,999: 20 (significant jump from previous month)
(These price ranges represented 27.9% compared to 25.9% last month)
- $600,000 – $699,999: 7
- $700,000 – $799,999: 7
- $800,000 – $899,999: 4
- 900,000 – $999,999: 0
(Solds for $600,000 – $1mill = 16.2 % compared to 12 % last month)
- $1,000,000 – $1,999,999: 5 (compared to 6 last month and 10 in May)
- $2 million+ : 1
(Solds $1million+ = 5.4 compared to 5.6% last month)
The most improved price ranges were the $500,000’s and the $800,000’s. The high end continues to struggle.
8-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 have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009, 2010 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.
Summary and My Insight
The Positives and the Negatives:
- Lake Norman is finally seeing some consistency in its’ improved sales numbers.
- Lake Norman home sales year-to-date are up 25% over 2011!!!
- Lake Norman’s inventory of homes for sale remains low and appears to be dropping a bit.
- The number of properties currently under contracts indicate that our Lake Norman housing market will sustain our good closed sales numbers for the next several months.
- The number of distressed homes for sale are actually dropping so represent an even smaller percentage of our total inventory and sales.
- There are a lot of home buyers out looking around all of the Lake Norman area. Properly priced listings are selling more quickly and sometimes with multiple offers.
- We are seeing more and more new construction popping up (Not spec homes).
- Interest rates are once again at all time lows at approximately 3.53% for 30-year fixed conforming loan.
- Positive national housing news this month including the May Case-Shiller report showing Charlotte’s average price up .9 from 2011. Other headlines: “Home values rise for first time in 5 years” by money.cnn.com, “Housing Market Turns Corner; U.S. Home Values Post First Annual Increase in Nearly Five Years” from Forbes.com, “Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing”, from Bloomberg.com.
- The purchase by Donald Trump of The Point Golf and Tennis Club continues to get media attention and seems to have had a positive impact on sales in The Point. They are already remodeling The Tavern restaurant creating a sports bar on one side and a more attractive dining room on the other. And, work is in process on the golf course as well.
- Sales prices remain low (in the US we are down to mid 2002 price levels) and I don’t see any signs of them going up. Rather, properties are selling once they are priced low enough to attract offers and then they may even get multiple offers.
- Our mid to higher-end property sales are extremely weak.
- With a shrinking inventory of active listings, buyers have fewer options.
- Home loans, especially construction loans, are still a very challenging process, particularly underwriting and appraisals. I had two really difficult closings this month out of 4 which were delayed due to the lender.
- Global economic turmoil and US economic uncertainty.
As I wrote for the past several months:
I am more convinced than ever that our Lake Norman housing market has hit its bottom in terms of annual sales volume. However, this has not translated to higher sales prices. Prices are low and buyers continue to be very picky; not willing to pay a higher price than past comparable sales.
The gossip among Realtors is how dramatically our activity has increased. Despite low inventories, the number of buyers out actively looking has increased substantially. Real estate firms are touting their sales increases and talk as if we are going to sustain these strong numbers. I am a bit more cautious. While the worst is most likely behind us, we have a long way to go and most expect that it will be a very slow recovery.
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) and floorplan. 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 at all time lows and prices low it is a good time to buy. With only 6%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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