While Lake Norman’s June home sales weren’t quite as stellar as May’s, we still logged in some very impressive numbers. At 150 single-family home sales we had the 2nd best month in the Lake Norman real estate market since July 2007. Once the late comers input their sales into the MLS my guess is that we will have closed about 151 contracts last month. (Note, I revised this sales analysis on July 15th to reflect increased sales logged in to the MLS from 144 to 150).
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 June 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 created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replaced 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 a new record low of 6.9% of Lake Norman’s total home sales down from 10.6% last month, 14% in April, 20.4% in March, 16.9% in February and January’s 29%. We only had 10 distressed home sales in June. The average price for distressed single family home sales was $444,964. Distressed active listings comprise only 3.1% of our total inventory of Lake Norman homes for sale! According to a recent article on Trulia the “normal” delinquency and foreclosure rate for the US is 5.25%.
- 27 %, of our closed sales were waterfront homes which is equal to last month’s. The average sales price of Lake Norman waterfront homes in June jumped up to $990,693 compared to May’s $778,045 and the average price per square foot was $229 which was up from $210 last month and higher than the $202 per square foot in February and $199 per square foot in January. There was an interesting change that an explain these numbers. We had 13 sales of waterfront homes over $1 million including 4 over $2 million making June one of the best months for luxury home sales in years.
- 16 new construction homes sold which was 6 more than last month. The average listing price vs sales price was 99.7%! Clearly there isn’t a lot of wiggle room on prices of new homes. 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.
- 51% of Lake Norman’s June home sales were under $400,000…this number actually increased slightly from last month
- 65.2% of our June home sales were under $500,000, which is about equal to the last several months but significantly lower than February’s 81.7%, 81% in January, 74 % in December, 75% in November, and 67% in October. While our lower price ranges are still dominating our Lake Norman housing market there are some new buyers who are jumping off of the fence.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total dropped 7.5% which is the second month in a row of decline after April’s record high of 319 . It looks like our sales for the next few months will continue to be relatively strong but the Lake Norman housing market is definitely slowing down a bit. It will be interesting to see if it picks up now that we are past Memorial Day/Graduation celebrations and the 4th of July. This is an important trend to watch!
A closer look at the chart:
- The number of Active Listings in Lake Norman increased 3% compared to last June’s. Our absorption rate/months of supply of active listings today increased to 6.9 after last month’s post recession low of 5.9. We are still within our goal of a balanced 6-8 months of supply in the Lake Norman area (MLS area 13). To put this in perspective of our post recession Lake Norman housing market, in January of 2009 we had 52.5 months of inventory. The average number of days on the market dropped by 18%.
- Conditional Sales, which are now called Under Contract Show, increased for the 17th month in a row, but this time by only 4%. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late July/August. Based upon these numbers we should continue to see stronger sales this summer than in 2012 but perhaps not as high as our spring numbers.
- Pending/Under Contract No Show sales are a healthy 34% higher than June 2012’s however this number also dropped from last month’s 48% increase April’s whopping 73% higher than April 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. I am pretty darn confident that we will again exceed last July’s sales of 116 but with two months of trending downward it looks like Lake Norman home sales in May might be our peak for 2013.
- The number of closed home sales in Lake Norman in May as of today are very impressive 27% higher than last June’s and the average sales price was up 28%. Obviously, the high number of sales over $1 million contributed to the average price increase.
The total number of Lake Norman homes under contract (but not yet closed) in the first week of each month are as follows:
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- 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 April 2013 closed sales in Lake Norman’s area 13-1 to 13-5:
- $59,000 – $199,999: 17
- $200,000 – $299,999: 26
- $300,000 – $399,999: 30
(These price ranges represented 50.7% of our June sales.)
- 400,000 – $499,999: 21
- $500,000 – $599,999: 15
(These price ranges represented 25%)
- $600,000 – $699,999: 10
- $700,000 – $799,999: 4
- $800,000 – $899,999: 3
- 900,000 – $999,999: 3
(Solds for $600,000 – $999,999 = 13.9 down from 20.1%in May and 18.9% in April)
- $1,000,000 – $1,499,999: 5
- $1,500,000 – $1,999,999: 6
- $2 million+ : 4
(Solds $1 million+ = 10.4% compared to 4.4 % last month and 7.5% in April)
The most improved price ranges in June were entirely in the luxury home price ranges at or above $1.5 million. The weakest price ranges were the trade-up buyers in the $700,000-$999,999’s.
Higher-end home sales in Lake Norman
This is the first month we have seen real growth in Lake Norman’s luxury home sales above $1.5 million. It will be interesting to watch this niche going forward to see if, in fact, the highest-priced homebuyers in Lake Norman are back!
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.
As you can see in our Lake Norman sales by month and year chart above, Lake Norman’s home sales for the first six months of 2013 exceeded 2012’s by 27.9% and was the best since 2007.
Summary and My Insight
- The Lake Norman real estate market, while trending downward slightly, is still posting some very strong numbers historically and I expect us to continue to experience improved home sales compared to 2012 for the rest of the year. I have absolutely no doubt that Lake Norman’s housing market hit bottom and is well on its recovery path.
- Lake Norman has been enjoying consistently higher closed sales for well over a year. Prices have not only stabilized but are actually increasing in some areas. However, I can not say that our prices have increased across the board. Rather, there are pockets of strengths and relative weaknesses which result in fluctuating average sales prices when combined for the entire Lake Norman real estate market.
- Lake Norman homes are selling quicker and at higher list-to-sale percentages. With low inventory demand is higher and I would expect all price ranges to slowly improve.
- The number of distressed homes for sale are so low they are almost irrelevant in 2013 and the numbers are still dropping.
- New construction is definitely back. Not only did we sell 16 new homes last month but we have 58 new homes under contract. New housing communities are popping up now as well as custom and smaller groups of spec homes. There is a new Tru Homes subdivision down Isle of Pines in the $300-$500,000 range and Lennar just put up a sign that they will be developing the last phase of The Farms by Woodland Heights Elementary. A great example of the quantity of new construction is in The Farms in Mooresville where a number of builders are buying up lots and building custom and some spec homes as well. Interesting note: New construction homes are selling for 99.8% of the listing price!
- Lake Norman’s inventory of homes for sale is at a stable 6-month supply. This means overall Lake Norman is leaning towards a sellers’ market. Again, this depends a lot on location and price.
- Interest rates shot up in the past few weeks. While this seems like bad news, in fact,it will most likely serve as a motivator for buyers who thought they could wait to buy and now need to jump off the fence.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Finding the perfect home has become more difficult with so fewer listings to chose from and the fact that the older inventory has been picked over.
- Mortgage rates have jumped up more than 1%. While this may motivate qualified homebuyers to jump off the fence it will impact buyers as to what they can afford and even if they can now afford to buy.
- I still have concerns about Lake Norman sellers and listing agents being overly optimistic not only when they initially price their properties but also during negotiations. With the increase in showings many sellers are expecting higher offers so are not as willing to work with good but lower offers by qualified buyers.
- I still have equal concerns for Lake Norman home buyers. A good number are still in the old mind set that they have plenty of time to consider new listings and that they should start really low. Right now good properties are selling quickly, sometimes with multiple offers. It is critical to know comparable sales activity in your price range and act quickly if/when a good listing comes on the market.
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 rising and prices low but rising it is a great time to buy. With less than 4% of Lake Norman’s current listings being “distressed sales” don’t expect the “bargain” to come along at an unrealistic price. Low-balling, except on distressed properties, really isn’t a great strategy nor will it result in a lower price. Get it in your head that the Lake Norman housing market is the strongest it has been in years and that prices are going up. 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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