After June’s highest monthly home sales in Lake Norman’s history, we closed a respectable 180 single family homes in July but it was only the second best July since 2005. No new records set. :-). That said, our July sales were 15% higher than last July’s! 6 out of the first 7 months of this year our sales exceeded 2016’s. We were up against a huge May 2016 of 211 and managed to exceed that by a respectable 7%. Over all, home sales in the first 7 months of 2017 were 19.7% higher than 2016’s. AND, at 1119 closed sales, our first 7 months were the highest first 7 months in Lake Norman’s history! Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Waterfront home sales are definitely trending upwards after years of disappointing numbers. Waterfront properties represented 31.7% of our July sales compared to 26.6% of our June sales. At the same time they currently comprise 35.9% of our active listings. The average sales price of a waterfront home in July was $899,372 up from last month’s $784,459, May’s $825,798 but still shy or our high of $1,073,960. The average price per square foot of our waterfront homes came in at $247.26 which is up from last month’s $239.91, but down from May’s $259.33. This number is best averaged over a longer period of months because it only takes one or two really expensive sales ($2- 3 million+) to skew any given month. It took on average 88 days days for a waterfront home to sell (verses 125 last month) and they sold for 96% of the listing price. All of these numbers are an improvement. Plus, we now have a 6-month supply of active waterfront listings which puts them in a balanced market, finally! We currently have 130 waterfront homes under contract comprising 35.7% of Lake Norman’s total homes under contract which further supports their current sales momentum. I also took a look at the prices of the waterfront homes currently under contract and of the 130, 65 are priced above $800,000 and 32 are over $1 million!
- 38 new construction homes closed in July through our MLS but 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. (In fact, this segment of the market may be skewing our Lake Norman home sales numbers quite a bit.) That said, this number is quite a bit lower than last month’s. The average listing price vs sales price of new construction single family homes was 99%. Clearly, buyers are willing to pay a premium for a new home. (That said, don’t forget to ask for all those great upgrades!) We currently have 113 new construction homes under contract in the MLS. The average sales price in July logged in at $372,279. The months of supply of active listings based on July’s sales jumped to 6.2 putting new construction in a balanced market for the first time in quite a while. Interesting to watch this trend.
- Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 1.1% of Lake Norman’s total July home sales. With just 2 distressed closed sale for the entire month it is clear they didn’t play a role in July at all. Distressed active listings currently comprise less than 1% of Lake Norman’s current total inventory of single family homes for sales. Distressed sales continue to play an insignificant role in our Lake Norman real estate market.
- 44.4% of Lake Norman’s July’s single family home sales were under $400,000 which is down quite a bit from last month’s 51.6%.
- 62.8% of Lake Norman home sales in July were under $500,000, down from last month’s 69.8%.
- Indications that our strong market will continue are provided by our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 364. We have 12% more properties under contract than at the same time in 2016 and 27% more than August 6, 2015! Surely this will translate into some high numbers for the next several months. No shoes are dropping yet!
A closer look at the chart:
- The number of Active Listings today in Lake Norman is down 2% compared to last year’s at this time. After peaking last month at 990 it looks like our new listings are starting to drop off as they typically do at this time of year. This drop combined with strong sales means that buyers act quickly when an especially a good property hits the MLS. Today we have 964 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings sits at rose to 5.36. While this means overall Lake Norman is still in a seller’s market, we are on the border of becoming a balanced market. Keep in mind, however, within specific price ranges there are swings from a buyer’s market to a balanced to a seller’s market.
- Under Contract Show (conditional) sales are up a healthy 14% versus this time last year. The average price of our new contracts is down 2% and the days on market were identical to last July’s. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent strong future closed sales most likely in September/October.
- Pending/Under Contract No Show sales are also up 7%. These listings went under contract on average in 94 days which is 13% more days than last year. Coupled with our strong Under Contract Show numbers, these numbers indicate that for the next few months we should continue to post some strong numbers compared to last year and previous years. 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 September.
- Lake Norman’s closed July home sales in our MLS as of today and as stated above, were an impressive 15% higher than last July’s. (And the second best July since 2005). The average price was down 6% compared to last year but our days on market were 8% faster than last year’s.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- January 6, 2017: 183
- December 6, 2016: 237
- November 6, 2016: 275
- October 6, 2016: 274
- September 6, 2016: 288
- August 6, 2016: 325
- July 6. 2016: 313
- June 6, 2016 344
- May 6, 2016: 340
- April 6, 2016: 297
- March 6, 2016: 234
- February 6, 2016: 207
- January 6, 2015: 176
- December 6, 2015: 202
- November 6, 2015: 222
- October 6,2015: 209
- September 7, 2015: 268
- August 6, 2015: 286
Here is a breakdown by price-range of our July 2017 closed sales in Lake Norman
- $1,000 – $99,999: 0
- $100,000 – $199,999: 16+
- $200,000 – $299,999: 35–
- $300,000 – $399,999: 29–
(These price ranges represented 44.46% of our July home sales compared to 51.6% last month)
- $400,000 – $499,999: 33–
- $500,000 – $599,999: 16
(These price ranges represented 22.7% of our July sales compared to 25.8% last month)
- $600,000 – $699,999: 12
- $700,000 – $799,999: 10
- $800,000 – $899,999: 9+
- 900,000 – $999,999: 1–
(These price ranges represented 17.8% of July’s sales compared to last month’s 16.4%)
- $1,000,000 – $1,499,999:13+
- $1,500,000 – $1,999,999: 3++
- $2 million+ : 3++
(#Solds $1 million+ = 10.6% of July’s sales compared to 6.2% in June)
These numbers show our specific strength and weaknesses in July. We saw impressive activity in the $100,000’s, $800,000’s, our luxury price ranges. While the majority of sales (67.2%) were still under $600,000. Our trade-up price ranges held steady and we finally saw some real improvement for our luxury market!
Higher-end home sales in Lake Norman
Let’s hear it for our Lake Norman luxury market! While the numbers aren’t huge, all price ranges above $1 million experienced increases. Homes at or above $1,000,000 comprised 10.6% of our July sales while only 6.2% of June’s total closed sales. It is great to see 3 sales over $2 million. And, as I already noted above, 65 properties under contract are priced above $800,000 and 32 are over $1 million which is encouraging!
Lake Norman’s Waterfront Housing Market
As I wrote above,
“Waterfront home sales are definitely trending upwards after years of disappointing numbers. Waterfront properties represented 31.7% of our July sales compared to 26.6% of our June sales. At the same time they currently comprise 35.9% of our active listings. The average sales price of a waterfront home in July was $899,372 up from last month’s $784,459, May’s $825,798 but still shy or our high of $1,073,960. The average price per square foot of our waterfront homes came in at $247.26 which is up from last month’s $239.91, but down from May’s $259.33. This number is best averaged over a longer period of months because it only takes one or two really expensive sales ($2- 3 million+) to skew any given month. It took on average 88 days days for a waterfront home to sell (verses 125 last month) and they sold for 96% of the listing price. All of these numbers are an improvement. Plus, we now have a 6-month supply of active waterfront listings which puts them in a balanced market, finally! We currently have 130 waterfront homes under contract comprising 35.7% of Lake Norman’s total homes under contract which further supports their current sales momentum. I also took a look at the prices of the waterfront homes currently under contract and of the 130, 65 are priced above $800,000 and 32 are over $1 million!
Waterfront home sales are still overall in a buyer’s market BUT, with the average days on market at only 88, it is clear that good new listings are now selling quickly! IF you can find a good one I would pounce on it! Keep in mind that this varies quite a bit by price range, location and quality of water.
As this market evolves post recession, prices have gone up despite rather tepid sales but have not fully recovered. Almost all of my waterfront buyers have had to increase their price range when they realize how much better the options are when they do so. I have had some higher-end waterfront buyers turn to off water properties when they can’t find something desirable in their price range. New listings with good water are selling more quickly than in the past while the rest are languishing. It is important for potential waterfront buyers to understand that there are fewer good options in the lower and trade-up price ranges so watch for new listings and act quickly. The lowest priced listings are mostly at the end of coves, can’t have docks or are in less desirable locations. Just as an FYI, I have sold several luxury home buyers waterfront lots this past year as an alternative to settling for a home that didn’t suit them or needed too much work. Prices are going up out of circumstances rather than overall market trends. See my Waterfront Home Sales 2005-2016 analysis.
13-Year Comparison of Lake Norman Home Sales By Month
* 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. ***With our new MLS Matix program there are some variances in numbers but I am not going to go back to prior years and adjust.
What a fascinating look at our highs and lows, especially the first seven months of this year! We went from a record-breaking high January to an almost record-breaking low in February to a HUGE March, a solid April, a HUGE May, an even HUGER June! (Yes, I said
huger which isn’t a real word:-) and a very strong July. Lake Norman’s overall 2017 real estate market is now 19.7% ahead of the first 7 months of 2016 and we logged the highest first 7 months of home sales since I began this chart back in 2005. Note that we ended 2016 with over double the total sales of 2008, 2009, 2010 and 2011! I can’t wait to fill in more numbers in our 13th column.
Summary and My Insight
- Our July closed sales were near record breaking reflecting the continued strength of our Lake Norman housing market in 2017.
- 2017 year-to-date we are 19.7% ahead of the same period last year and the highest first 7 months of a year ever.
- Our current number of homes Under Contract and Pending indicate we should have strong closed sales in August with no slowdown in sight!
- Our waterfront/luxury markets are showing some good signs of growth for the first time all year.
- The number of distressed homes for sale remain so low that they are truly irrelevant and did not play any perceptible role in our Lake Norman housing market.
- Sellers in lower price ranges are making money! I have had 3 listings in the past few months where my sellers (formally my buyers) made nice profits on their homes. It is important to note that in every case they spent a great deal of money staging their homes with new carpet, refinished or new hardwood floors in main living areas, fresh paint in the popular grey and white tones and spruced up landscaping and curb appeal. 2 of the 3 painted their old wood kitchen cabinets white and they looked wonderful. All sold for slightly over asking with multiple offers.
- New construction is definitely back in a consistent way. Custom and smaller groups of spec homes are popping up all over Lake Norman. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor.
- New listings in the lower price ranges that are in good condition and in desirable locations are selling with multiple offers within days of hitting the MLS.
- Forbes ranks North Carolina second on best states for business list.
- Bankers and economists indicated that the Charlotte are economy will ramp up in 2017. “We will continue to see folks and businesses moving here,” according to Mark Vitner, senior economist at Wells Fargo.
- Inventory levels are still relatively low.
- Our trade-up and luxury home sales Under Contract numbers remain very erratic and have not shown consistent improvement since the recession unlike our lower price ranges.
- While improving, our waterfront properties sales are still under performing compared to the number of active listings and prices have not fully recovered.
- Mortgage interest rates, while down a bit are hovering at about 4%. There is much speculation as to where they are headed. Unemployment is down and job growth is good, the stock market is setting record highs yet economists can’t seem to agree on much of anything else about the rest of 2017 because of all of the unknowns related to the election and international challenges so it remains to be seen where interest rates will be in 12 months.
- Existing home sales are being challenged by new construction. In head to head competitions new construction usually wins which hurts resale homes in the same or similar communities except in lower price ranges where there simply isn’t enough inventory.
- Strict loan standards implemented during the recession are still making it more difficult for buyers to qualify despite some easing and modifications. Here is another big unknown related to our current administration. There has been discussion about paring back on the Dodd-Frank Act. Some think removing these regulations will ease the mortgage loan process, especially for first-time buyers.
- 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 selling very quickly. Watching the “hot sheet” is once again a part of the buying process for some price ranges and locations. Don’t procrastinate when considering a new listing because they are selling quickly!
- 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 2nd quarter of 2017.
As a Realtor, I find our current Lake Norman real estate market exhilarating. It is a whole lot more fun to see my clients selling their homes quickly and my buyers winning in multiple offers. But, not everyone is enjoying this market. Buyers who don’t act quickly or aren’t aggressive enough with their offers (both price and terms) are loosing out to other buyers and for them it is a stressful roller coaster ride. For sellers with dated homes or in less desirable locations they can suffer long days on the market. While improving, waterfront and luxury homes are still in a buyer’s market for the most part.
Buyers in 2017 in the lower price ranges should be prepared to act fast when a new listing comes on that suits you. Or, if you want a more affordable option in any price range, prepare to be more flexible, be willing to do some work on your newly purchased home and do your own updating, and, if willing, be more flexible about locations based upon our limited inventory. I just represented a buyer who won the bidding war by using what is referred to as an “escalation clause” where we stated that we would offer $1000 higher than their best offer up to $5000. In multiple offer situations, be prepared to go over the listing price. If you really love the home, be aggressive!
Sellers should watch a lot of HGTV and be prepared to do painting, flooring and staging to attract buyers! As I wrote above, I just sold several homes with multiple offers where in one case the seller tripled his investment in staging and preparing his home for the market and all three made money. The reality is that most of our Lake Norman homes are now dated and many are at the cut off age when they are going to need new HVAC units, roofs and other expensive repairs. 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. ALWAYS offer home warranty plans to buyers!
Always keep in mind that the real estate market in Lake Norman is extremely diverse. Make sure you know what is happening right now in your market niche. 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 rising along with prices it is not time to sit on the fence. With less than 2% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price. If you read my post: Really Cool Real Life Examples of Home Values Trends in Lake Norman you will know that a lot of our new listings are selling VERY quickly and at higher prices. I have also noticed a growing pace of price reductions. I think listing agents are getting sellers to lower prices more quickly now that we are just about through our strongest selling season. Our market is ever evolving!
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!
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