The dynamics of our Lake Norman real estate market are definitely changing. What started as an upward trend in sales and a downward trend in inventory of homes for sale in 2012 has given way to a true break through in so many aspects of our housing market. There is a new sense of energy and hustle reminiscent of the good old days. For some Realtors the days of 24/7 have also returned. I was so excited to get Easter off!
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 March 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 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 statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 20.4 % of our total sales up slightly from last month’s 16.9% and down from January’s 29%. The average price for distressed single family home sales was $308,994 indicating that these sales were primarily in our very lowest price ranges. Distressed active listings dropped to a new low of only 4.7% of our 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%. If we apply this our Lake Norman in this respect our real estate market has actually returned to normal and has less than half the US ‘s current delinquency and foreclosure rate of 10.18%!
- 27% of our closed sales were waterfront homes which was about equal to the past several months. The average sales price of Lake Norman waterfront homes in March was $809,185 and the average price per square foot rose to $218 up from $202 per square foot last month and $199 per square foot in January.
- 9 new construction homes sold compared to 11 in March of 2012. While this number is not really impressive, we currently have 57 new construction single family homes under contract in Lake Norman. These represent 20% of all Lake Norman homes under contract and the average listing price vs sales price is 100%! 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.
- 52.7% of Lake Norman’s March home sales were under $400,000.
- 68% of our March home sales were under $500,000 a drop from 81.7% last month, 81% in January, 74 % in December, 75% in November, 67% in October, 70% in September, While our lower price ranges are still dominating our Lake Norman housing market this is the first month the have declined since October 2012.The trade-up buyers are jumping off of the fence which is one reason I feel there is so many more showings right now. There are simply more buyers out there looking in all price ranges.
- Our “Under Contract Show” AND “Under Contract No show”/Pending numbers are stunning. At a combined total of 290, not only are they up 33.6% from last March’s but they are the highest since I have been keeping records and probable the highest since the recession! Clearly our Lake Norman’s housing market is headed for record-setting spring sales.
- As of today, the number of active listings for all of Lake Norman total 854, up from 815 last month and 708 in December but are just 5% lower than the same time last year. Considering how low our number of active listings in Lake Norman have been for about a year, it makes sense that our numbers have started to level out when compared to last years’. If our inventory stays this low through spring the dynamics of our Lake Norman housing market will start swinging towards the sellers. 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 dropped 1% from last March’s. Our absorption rate/months of supply of active listings on April 1 was back down to about 9.3. While this puts our market temporarily above our goal of a balanced 6-8 months of supply in the Lake Norman area (MLS area 13), once our robust sales numbers for April and May are recorded I expect to see this number drop. However, the national number today is 4.4 months of supply so despite our improvement since January of 2009’s 52.5 months of inventory we are still not completely in a buyer’s market unlike some areas of the country.
- Conditional Sales, which are now called Under Contract Show, increased for the 14th month in a row, this time by 28% 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 April/May. Based upon these numbers we should see strong closed sales in the next few months.
- Pending/Under Contract No Show sales are 44% higher than March 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. Given that we had 115 pending sales last month I am pretty confident that we will again exceed last April’s strong closed sales of 91. 2013 is already showing it can not only sustain the sales growth trends of 2012 but even beat them.
- The number of closed home sales in Lake Norman in March as of today just equal March 2012’s historically very strong number of 91 sales. Once the few additional belated sales are reported to our MLS I think we will most likely have about 94 sales which will slightly exceed last March’s sales and will be the strongest March since the recession for the 11th month in a row.
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- April 2, 2013: 290 (The highest since I have been keeping records!)
- 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 March 2013 closed sales in Lake Norman’s area 13-1 to 13-5:
- $44,000 – $199,999: 13
- $200,000 – $299,999: 23
- $300,000 – $399,999:12
(These price ranges represented 52.7% of our March and just about equal to last month’s 53.5 %.)
- 400,000 – $499,999: 14
- $500,000 – $599,999: 10
(These price ranges represented 26% compared to 28% last month)
- $600,000 – $699,999: 2
- $700,000 – $799,999: 2
- $800,000 – $899,999: 4
- 900,000 – $999,999: 4
(Solds for $600,000 – $1mill = 13.4% up from 9.9% last month )
- $1,000,000 – $1,499,999: 5 (all 5 were $1.2 million or below)
- $1,500,000 – $1,999,999: 1
- $2 million+ : 1
(Solds $1million+ = 7.6 % compared to 8.4% last month)
The most improved price range was in March was the $800,000 – $999,999. This is a price range that I have considered anemic for months and now seems to be gaining momentum.
Higher-end home sales in Lake Norman
Once again the $1,000,000 – $1,200,000 price range is quite strong. Once you get above $1.2 million sales are rare. While we have had some headline sales like Michael Jordan buying Doug Herbert’s estate which was in foreclosure for $2.8 million and Kyle Busch purchasing a large estate for $7.5 million, these sales a few and far between.
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 quarter of 2013 exceeded 2012’s by 22.2%.
Summary and My Insight
- The unprecedented number of properties currently under contract indicates that our Lake Norman housing market should record strong closed sales numbers for at least the next several months.
- Lake Norman is experiencing consistently higher closed sales as well. Prices have not only stabilized but are actually increasing in some areas. A good example is our waterfront average price per square foot increase from $199 to $218 in the past two months. Averages sales in The Farms in the 1st quarter of 2013, for example,were$149 per square foot compared to $130 per square foot in the 1st quarter of 2011 and $134 in 2012.
- The number of distressed homes for sale are so low they are almost irrelevant in 2013.
- New construction is back. Not only did we sell 9 new homes last month but we have 57 new homes under contract and 115 for sale and this number is climbing. Just drive down Brawley School Rd and turn down streets like McKendree, Chuckwood, Tuskarora Trail, Isle of Pines and you will see an impressive number of new homes under construction!
- Lots are selling! We sold 22 last month and there are 76 under contract. Builders are seeing the light at the end of the tunnel as well!
- The number of showings active listings are logging in is growing. Home buyers are out in numbers looking around all of the Lake Norman area. Properly priced listings in very good condition are selling more quickly and sometimes with multiple offers even in our $1 million+ price ranges. This is particularly true of waterfront homes.
- Lake Norman’s inventory of homes for sale remains low.
- Interest rates dropped a bit last week to 3.54% after ticking up a bit and are predicted to remain low in 2013.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Positive national housing reports and economic analysis continue to headline news about the US housing market this year. “Shadow inventory” is down 28% from their peak according to loan data aggregator CoreLogic, 44% of which are located in California, Florida, New York, New Jersey and Illinois. According to the latest S&P/Case-Shiller index home prices in 20 US cities have climbed the most since 2006. Finally, according to the National Association of Realtors sales of existing homes hit their highest point since November 2009 in February. Much of this improvement is driven by the western states, particularly California.
- My buyers from out-of-state are selling their homes more quickly than in the past years enabling them to buy in Lake Norman more quickly as well.
- 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 appreciate and work with good offers by qualified buyers.
- I have equal concern for Lake Norman home buyers. Many are still in the old mind set that they have plenty of time to consider new listings and also make lower offers. But, 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 a good listing comes on the market.
- Home loans, especially jumbo and construction loans, are still a very challenging process, particularly underwriting and appraisals. It is imperative for buyers to meet with lenders before beginning their home search to make sure they are qualified for mortgage. 20% down payment is a good rule of thumb. While there are other loan options, buyers need to expect to have a substantial down payment.
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 prices low but rising it is a good time to buy. With less than 5% of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale 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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