Holy Cow! Lake Norman’s June closed home sales of 225 makes it the highest month in Lake Norman’s history, surpassing the previous high of 216 set back in August 2005! 5 out of the first 6 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, the first half of 2017 was 19.6% higher than the first half of 2016. AND, at 932 closed sales, our first 6 months were the highest first 6 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 homes continue to under perform but are showing new signs of life. Waterfront properties represented only 26.6% of our June closed sales which is about what they have been running for quite some time. At the same time they currently comprise 38.4% of our active listings. The average sales price of a waterfront home in June was $784,459 down from last month’s 825,798 and down from our high of $1,073,960. The average price per square foot of our waterfront homes came in at $239.91, down from last month’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 125 days for a waterfront home to sell (verses 74 for all Lake Norman homes)and they sold for 95% of the listing price. Here is why I said there are signs of life: we currently have 114 waterfront homes under contract comprising 32.6% of our total homes under contract which indicate recent sales momentum. And, our waterfront homes’ months of inventory dropped to 6.35 which puts it overall in a balanced market favoring neither buyers not sellers. I also took a look at the prices of the waterfront homes currently under contract and of the 114, 60 are priced above $800,000 and 31 are over $1 million!
- 60 new construction homes closed in June 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.) The average listing price vs sales price of new construction single family homes actually increased from 97% to 101%. 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 116 new construction homes under contract in the MLS. The average sales price in June logged in at $384,813. The months of supply of active listings based on June’s sales stands at 4.2 so overall new construction homes are in a seller’s market.
- Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 2.7% of Lake Norman’s total June home sales. With just 6 distressed closed sale for the entire month it is clear they didn’t play a role in June 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.
- 51.6% of Lake Norman’s June’s single family home sales were under $400,000 which is slightly higher than last month’s.
- 69.8% of Lake Norman home sales in June were under $500,000, up from 62.9% in May.
- Indications that our strong market will continue are provided by our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 350. We have 11.8% more properties under contract than at the same time in 2016 and 22% more than July 6, 2015! Surely this will translate into some high numbers for the next several months.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is down 4% compared to last year’s at this time. While increasing since the seasonal lows in January our relatively low number of active listings continue to challenge our sales and require buyers to act quickly when an especially good property hits the MLS. Today we have 990 single family homes for sale in all of Lake Norman up from last month’s 950, May’s 906, April’s 836, March’s 844, February’s 824, and 766 in January. Our peak inventory in 2016 was, in fact, June’s 1033. Our absorption rate/months of supply of active listings sits at 4.4 which is most definitely a seller’s 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 12% versus this time last year. The average price of our new contracts is down 10% but the days on market are down 8% compared to last June’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 August/September.
- Pending/Under Contract No Show sales are also up 10%. These listings went under contract on average in 76 days which is 21% more days than last year. Coupled with our strong Under Contract Show numbers, these numbers indicate that for the next few months we should log some strong numbers compared to last year. 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 August.
- Lake Norman’s closed June home sales in our MLS as of today and as stated above, were an impressive 7% higher than last June’s and the best single month in our Lake Norman area ever. The average price was down 11% compared to last year but our days on market was 1% 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:
- 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
- July 6, 2015 287
Here is a breakdown by price-range of our June 2017 closed sales in Lake Norman
- $72,000 – $99,999: 1 –
- $100,000 – $199,999: 10-
- $200,000 – $299,999: 50+
- $300,000 – $399,999: 55 ++
(These price ranges represented 51.6% of our June home sales)
- $400,000 – $499,999: 41++
- $500,000 – $599,999: 17-
(These price ranges represented 25.8% of our June sales compared to 23.9% last month)
- $600,000 – $699,999: 16=
- $700,000 – $799,999: 12+
- $800,000 – $899,999: 6=
- 900,000 – $999,999: 3–
(These price ranges represented 16.4% of June’s sales compared to last month’s 19.8%)
- $1,000,000 – $1,499,999:12++
- $1,500,000 – $1,999,999: 1-
- $2 million+ : 1-
(#Solds $1 million+ = 6.2% of June’s sales compared to 6.6% in May)
These numbers show our specific strength and weaknesses in June. We saw impressive activity in the $200,000’s, $300,000’s, $400,000’s, $700,000’s and $1,000,000 – $1,500,000 price range. The majority of sales (77.4%) were under $600,000. Our trade-up price ranges and luxury market continue to under perform.
Higher-end home sales in Lake Norman
The Lake Norman luxury market REALLY struggled in June. Homes at or above $1,000,000 comprised only 6.2% of June’s total closed sales. This niche simply has not recovered from our recession and their sales numbers swing up and down from month to month. After several months with notable sales over $2 million, the absence of any sales above 2 million in April was disconcerting. In May we had 4 but in June we had but one. But, as I already noted above, 60 properties under contract are priced above $800,000 and 31 are over $1 million which is encouraging!
Lake Norman’s Waterfront Housing Market
As I wrote above,
“Waterfront homes continue to under perform but are showing new signs of life. Waterfront properties represented only 26.6% of our June closed sales which is about what they have been running for quite some time. At the same time they currently comprise 38.4% of our active listings. The average sales price of a waterfront home in June was $784,459 down from last month’s 825,798 and down from our high of $1,073,960. The average price per square foot of our waterfront homes came in at $239.91, down from last month’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 125 days for a waterfront home to sell (verses 74 for all Lake Norman homes)and they sold for 95% of the listing price. Here is why I said there are signs of life: we currently have 114 waterfront homes under contract comprising 32.6% of our total homes under contract which indicate recent sales momentum. And, our waterfront homes’ months of inventory dropped to 6.35 which puts it overall in a balanced market favoring neither buyers not sellers. I also took a look at the prices of the waterfront homes currently under contract and of the 114, 60 are priced above $800,000 and 31 are over $1 million!
Waterfront home sales are still overall in a buyer’s market so it remains a good time to buy a waterfront home IF you can find a good one. Keep in mind that this varies quite a bit by price range, location and quality of water. Don’t be complacent because when really nice waterfront properties hit the MLS they are actually selling quickly.
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. But, I wonder if this is the reason waterfront home sales are still struggling? There may be many buyers who simply can’t increase their price range so have to turn to off-water options instead when they can’t find something desirable in their price range. It is also true that 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 six 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 and an even HUGER June! (Yes, I said
huger which isn’t a real word:-). Lake Norman’s overall 2017 real estate market is now 19.6% ahead of the first 6 months of 2016 and we logged the highest first half of a year 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 June closed sales were the best month in Lake Norman recorded by our MLS.
- 2017 year-to-date we are 19.6% ahead of the same period last year and the highest first half of a year ever.
- Our current number of homes Under Contract and Pending indicate we will have strong closed sales in July with no slowdown in sight!
- 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 month 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 and we are now in our historically strongest months of the year.
- 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.
- 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% and the Feds just raised their rates for the second time this year. There is much speculation as to where they are headed. Economists can’t seem to agree on much of anything else about 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 incoming 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 1st quarter of 2017. I will be doing one again in a few weeks for the 2nd quarter of this year.
There is no doubt that Lake Norman has had a very dynamic market so far in 2017. That said, we truly have 2 very distinct and wildly different markets within our greater Lake Norman real estate market. In the price ranges up to $325,000 or so buyers are experiencing multiple offers and are having to go over the asking price in many cases. At the same time I am seeing price reductions upon price reductions in our waterfront and luxury markets.
Despite all of these potential challenges, I am still upbeat about our overall Lake Norman real estate market. Every year since 2011 we have seen year-over-year growth. As I have emphasized above, our total sales numbers for the first 6 months of 2017 are the highest on record. Our market up to $500,000 comprises 77.4% of our total sales. This segment of homes is quite strong. However, I am still uncertain about the direction of our trade-up, luxury and waterfront home sales.
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 if possible, lock in interest rates as soon as you are ready to buy if your lender recommends doing so, and 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 sellers tripled his investment in staging and preparing his home for the market and all three made money.
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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