Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s June 2019 Market Report

Lake Norman Real Estate's June 2019 Market Report

All data is from the Carolina Multiple Listing Service.

So, our lower pending sales numbers in Lake Norman last month did, in fact, result in a decline in closed sales in June, posting a 12% drop from June 2018’s and a 6.3% decline compared to last month’s. This was the first month in 2019 that our Lake Norman home sales were below last year’s. Despite this modest drop we are still 4.4% higher for the first 6 months of 2019 compared to 2018.  My numbers below should provide some deeper insight into where we are headed as well as details regarding this month’s sales.

Here are what I feel to be the biggest takeaways from June’s Lake Norman real estate sales data:

  • Our current month’s of supply (absorption rate) is only 3.39.  We are still very much in a seller’s market.  (A balanced market is 6 months of inventory).
  • Lake Norman’s first 6 months of 2019 were 4.4% above the same period in 2018 despite our drop in June.
  • At 222 sales, this June ranks below both 2018 and 2017.
  • The average sales price was up 11% over last year’s.  Our most notable price ranges include the $500,000’s, $900,000’s and our luxury market over $1.5 million.
  • Our inventory of active listings is significantly lower than last year’s. (-12% or a whopping 101 less than last year’s!). This is one of the most dramatic disparities of active listings compared to monthly sales we have ever seen. Normally our inventories increase significantly at this time of year and yet despite our low number of active listings we are still posting solid sales numbers.
  • Our newest contracts (UCS) are up 1% and pending sales (UCNS) are up 9%. It looks like the slowdown in June will be short-lived.
  • Waterfront home sales moved even further into a seller’s market with their month’s of supply of active listings dropping to 4.98 down from last month’s 5.5. Despite these numbers, this important niche remains weaker than our overall Lake Norman real estate market.
  • Is new construction taking on an increasing share of our market?  They now represent 31.2% of our new contracts.

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes moved further into a seller’s market based upon June’s months of supply of listings which dropped to 4.98 after peaking at 13 in March. This is the lowest months of supply we have seen since last August’s 4.9. (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in June represented only 26.1% of Lake Norman’s total sales while comprising 38.4% of our active listings and only 20% of our under contract listings.
    • The average price per square foot of our waterfront homes jumped up to $285.64. It is important to note that this is the first month that our average price per-square-foot for our waterfront homes exceeded 2007’s peak average of $283.16.  That said, we had an unusually high number of luxury home sales over $1.5 million which impacted this month so it may be an anomaly. We will need to see what comes in for the next few months before saying we are truly seeing an upswing in our waterfront home prices.
    • It took on average 91 days for a waterfront home to sell and they sold on average for 96% of their listing price.
    • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.
  • 40 new construction homes closed in June through our MLS.  We have 111 under contract which represents 31.2% of all of Lake Norman’s homes under contact/pending today.  Of course, 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. The average listing price vs sales price of new construction single family homes remained at 99%.  It is still hard to negotiate prices with builders. I sold a yet-to-be-built home and because of the price range the builder would not budge on price or upgrades. However, always give negotiating a try and don’t forget to ask builders for upgrades as they usually prefer upgrades over price reductions.  The average sales price in June was $416,258.  The months of supply of active listings using June’s sales is 3.6 months which is very much a sellers’ (builders’) market.
  •  There were only 2 distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in June.  We have only 1 under contract and 8 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 41.4% of Lake Norman’s June single family home sales were under $400,000.
  • 55.9% of Lake Norman home sales in June were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 355.  This is 2.8% higher than last year at this time and seems to indicate that our sales momentum will pick back up after this  past month’s drop.

A closer look at the chart:

  • The number of Active Listings as of today in Lake Norman is down 12% when compared to last year’s at this time.  Today we have only 753 single family homes for sale in all of Lake Norman which is just slightly more than last month’s 747. Not only are our numbers of homes for sale historically very very low but they have remained at about 750 during these past few months when they traditionally peak. Our absorption rate/months of supply of active listings is 3.39 which indicates we remain very much in a sellers’ housing market. Keep in mind, however, within specific price ranges there are dramatic swings from a buyer’s market to a balanced to a seller’s market.  The average listing price of active listings is up 6% and the days on market is down 10%.  (So homes for sale have been on the market 12 fewer days than last year).
  • Under Contract Show (conditional) sales are up 1% from this time last year.  The average price of our new contracts is down 6% and the days on market is down 5%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales seem to indicated a slight improvement in closed sales in July/August after our dip in June.
  • Pending/Under Contract No Show sales are up a healthy 9% compared to last year’s.  The average price of our pending sales is up 5% and these listings/sellers successfully negotiated a purchase contract 6% faster than last year’s. 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 August. These numbers would further substantiate that we will see some solid sales numbers in the near future.
  • Lake Norman’s closed June home sales in our MLS as stated above, were 12% lower than last June’s.  The average price of our homes sold was up 11%. It took on average 3 fewer days to sell a home in June 2019 vs 2018.   One interesting side note about days on market: our MEDIAN days on market was 34 which means that half of our total sales took less than 34 days and half took longer.  Interesting! Keep in mind that we always get few more sales reported to our MLS after I do this report each month.

The total number of Lake Norman homes under contract (UCS + UCNS) at the end of the first week of each month are as follows:

  • July 8, 2019: 355
  • June 9, 2019 383
  • May 9, 2019: 386
  • April 9, 2019: 363
  • March 10, 2019: 318
  • February 8th, 2019: 268
  • January 6, 2019: 225
  • December 6, 2018: 251
  • November 8, 2018: 255
  • October 8 2018: 281
  • September 8, 2018: 310
  • August 8, 2018: 347
  • July 8, 2018: 345
  • June 8, 2018: 406
  • May 8, 2018: 389
  • April 8, 2018: 334
  • March 8, 2018: 280
  • February 8, 2018: 244
  • January 8, 2018: 206
  • December 8, 2017: 264
  • November 6, 2017: 282
  • October 6, 2017: 301
  • September 6, 2017: 346
  • August 6, 2017: 364
  • July 6 2017: 350

Here is a breakdown by price-range of our June 2019 closed sales in all of Lake Norman:

  • $1,000 – $99,999: 1
  • $100,000 – $199,999: 6-
  • $200,000 – $299,999: 39
  • $300,000 – $399,999: 46

        (These price ranges represented 41.4% of our June home sales which is slightly lower than last month’s)

  • $400,000 – $499,999:  32
  • $500,000 – $599,999:  30+

       (These price ranges represented 27.9% of our June sales, up from 25.9% last month)

  • $600,000 – $699,999: 15
  • $700,000 – $799,999: 13
  • $800,000 – $899,999: 7
  • 900,000 – $999,999: 11++

       (These price ranges represented of 20.7% of our June sales compared to 19.0% last month, 16.2% in April, 17.2% in March, 14.4% in February, 16.5%  of our January sales,  20.7% of our December sales, 21.1% of our November sales, 20.7% of our October sales, 25% in September, 21.1% in August sales,  23.6% in July, 19.1% in June, 19.9% in May, 21.1% 2018)

  • $1,000,000 – $1,499,999:  7–
  • $1,500,000 – $1,999,999: 8++
  • $2 million+ : 7++

       (These $1 million+ sales represented  9.9% of our June sales compared to 8.6% last month, 10.1% in April, 4.6% in March, 6.7%  in February,  7.3% of our January sales13.2% of our December sales, 14.7% of our November sales, 6.7% of our October sales,  12.3% in September, 10.8% in August, 6.2% in July, 8.1% in June, 9% in May, 11.2% in April, 7.4% in March, 8.9% in February, 7.1% in January, 6% in December 2017, 7.86% in November, and 7.8 % last October.)

In my opinion, this price range breakdown is one of the most important resources in my market reports because it goes deeper to define our specific strengths and weaknesses each month. In June our strongest improvement in sales were in the $500,000’s, $900,000’s, and our luxury market above $1.5 million.  As a group, the trade-up price ranges of $600,000 – $999,999 had a relatively strong showing for the second month in a row. But, most notable are our sales above $1.5 million!   As always with our Lake Norman real estate market, you really need to know specifics about your price niche because there is such disparity within price range sales trends.

Higher-end home sales in Lake Norman

We have had some ups and down in the past few months in our luxury home niche. After a particularly strong April, our luxury home sales above $1.5 million disappeared in May only to come back in June with whopping 15 sales! To put these numbers in perspective I included the percentage the luxury home niche represented each month for the past 18 months. While an improvement over the early 2019 months, we are not seeing consistent strength in our luxury housing market and we have yet to fully recover from the recession.

Lake Norman’s Waterfront Homes

As I wrote above, Waterfront homes moved further into a seller’s market based upon June’s months of supply of listings which dropped to 4.98 after peaking at 13 in March. This is the lowest months of supply we have seen since last August’s 4.9. (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in June represented only 26.1% of Lake Norman’s total sales while comprising 38.4% of our active listings and only 20% of our under contract listings.
  • The average price per square foot of our waterfront homes jumped up to $285.64. It is important to note that this is the first month that our average price per-square-foot for our waterfront homes exceeded 2007’s peak of $283.16.  That said, there was one large sale that impacted our number this month so it may be an anomaly. We will see what comes in for next month.
  • It took on average 91 days for a waterfront home to sell and they sold on average for 96% of their listing price.
  • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.

Annual Sales by Month

Lake Norman home sales by month and year

* 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. ***Our MLS just merged with many others over the past several years so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that the past two years’ numbers will be comparing apples to apples. However, I am not going to go back to prior years and adjust.

I love being able to see this overview which puts our current sales in context with prior years and provides monthly trends to help better understand Lake Norman’s seasonal trends, peaks and valleys.

Some of my readers have questioned why these numbers are of value due to the significant increase in the number of homes in our area now versus 15 years ago. But, when you try to assess the Lake Norman housing market, the only numbers that count are the quantity of active listings available, not the number of homes that exist in our area. And, our number of active listings at our peak in 2007 was 1300, almost twice as many as we have today!

Our first 6 months of 2019 put us 4.4% above the first 6 months of 2018. If you look at the subtotals on the gray line under June you will see what a stellar first half of 2019 we had! The highest number of sales in the first six months since 2005! We are up against some impressive numbers for the next few months so it will be interesting to see how well we do in July and August.

Summary and My Insight

Good signs/news for 2019:

  • On July 12, 2019, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 30-year fixed mortgage rate is 3.81 percent with an APR of 3.93 percent. It sounds like the Federal Reserve is considering a rate decrease this year which should translate to slightly lover mortgage rates.
  • Our under contract sales are up 1% and our pending sales are up 9% indicating some good forward momentum after our dip in June.
  • The number of distressed homes for sale is still extremely low so they still don’t play any perceptible role in our Lake Norman housing market.
  • Despite the very low inventory of active listings, overall we have been able to exceed last year’s numbers. (We are in a sellers’ market with only 3.39 months of supply over all in Lake Norman).
  • In all 4 four categories (Active, UCS, Pending and Closed) our homes are selling faster than last year and our pending properties were on the market for just two months.
  • New construction remains strong, representing about 31.2% of our pending contracts. It is clear that there is enough desirable new construction inventory to fill in the gap of our shortage of resale homes. If you drive around Lake Norman it feels like large, lower priced communities as well as custom and smaller groups of spec homes are popping up all over. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor and good buildable lots. Note that lumber prices are sky high which is causing construction costs to go up as well.
  • Our overall future is very positive. People are still moving to Lake Norman from all over the country to escape high taxes and cost of living, extreme weather, and myriad other reasons in order to enjoy our beautiful area, mild (?) 4 seasons, vibrant communities and better quality of life.

Challenges/Weaknesses for 2019:

  • We have only 753 active listings in our MLS today. There is no doubt that record-breaking low inventory of active listings continues to provide a headwind for our Lake Norman housing market.
  • I have continued concerns about our waterfront niche as well as luxury homes which are generally still under performing overall despite some improvement.
  • Much of our housing inventory is becoming more and more dated so it will be incumbent upon sellers to do more significant updating and staging to compete with new construction.  Of course, the alternative is to drop their sales price but most buyers here are not willing to buy a home that needs a lot of work.
  • New construction is presenting a real challenge to our resale homes, especially the dated homes discussed above.
  • 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 still selling quickly despite our slower market.
  • 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 2019. 
  • Economists are projecting that the 2019 US housing market will be a calmer and steady market. The crazy markets like San Francisco are predicted to experience a marked slowdown while steady markets like Charlotte should remain stable.

Final thoughts: 

As I wrote the past 9 months:

My family moved to Lake Norman from California in 2005 seeking a better quality of life and a lower cost of living.  I have watched our area grow immensely over the past 14 years. There is no doubt that Lake Norman is still a very appealing destination for folks from all over the country. We now can compete with many trendy cities throughout the country with our amazing number of new restaurants, breweries, entertainment and job growth.  But, with this growth has come increased traffic which is now just a fact of life on I-77. With the passing of time, our pre-recession “new” homes are now a bit dated and will be needing new HVAC sysems, water heaters and roofs. With a complete halt to new construction during the recession years we are now lacking the number and type of homes that appeal to many of today’s buyers.  For this reason new construction and remodeled homes are selling more quickly than ever.  It is more of a challenge for our “dated” homes and subdivisions where open floor plans are rare and kitchens and bathrooms are in less appealing woods and materials.  The result has been the need for sellers to do updating before listing and buyers, especially waterfront, need to be more willing to do remodeling after they purchase IF they found a home on a great waterfront lot or in a great location. Today, the bottom line comes down to price, location, condition, updates and proximity to desired amenities.

Buyers today need to know their price range’s.  Are they in a buyer’s or seller’s market? No matter what, be prepared to act fast when an exceptional new listing that has been updated comes on the market. Or, if you want a more affordable option in any price range, be prepared to be more flexible.  This means a willingness to do your own updating if you can’t afford an updated home, and, if possible, be more flexible about locations based upon our limited inventory.  At the same time, if you really love the home, be aggressive with your offer! Come in high and with very clean terms. 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!  

Sellers, while our lack of inventory may help, you may have work to do!  Watch a lot of HGTV and, if possible, be prepared to do painting, new flooring, painting kitchen cabinets white when feasible and staging to attract buyers. Your efforts will pay off with quicker selling times and higher sales prices.  I listed and sold a lovely home with multiple offers which can be completely attributed to the renovations and staging.  How do I know this? My favorite story is about my seller who had it listed his home a prior year in it’s dated condition with no staging and it sat on the market.  We sold it after updating and staging for about $20,000 above where they were before! Also, remember that 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 so, if possible, put on that new roof, replace the HVAC units while you are updating.  ALWAYS offer home warranty plans to buyers!

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