Wow, Lake Norman’s real estate market is rocking! We ended up March with an impressive 49% increase in closed home sales compared to last year’s AND a 57% increase over last month’s sales. Once again in 2015 we logged in the best month’s sales since 2007 which means our 1st quarter 2015 closed single family home sales were 25.6% higher than the first quarter of 2014 and the best first quarter in Lake Norman since 2007. Lake Norman’s housing market got crazy busy (my technical term for it) right after the holidays and we are now seeing this translated into closed sales but what about new contracts? Let’s take a closer look:
Lake Norman Market Report March 2015
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 11.5% of Lake Norman’s total March home sales. We had just 15 distressed sales in March with an average price of $273,864 (The highest closed sale price was only $625,000). Distressed active listings currently comprise only 2.2% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes were 23.8% of our March home sales while they currently comprise 39.4% of our active listings. The average sales price of a waterfront home in March was $674,147 and the average price per square foot was $214.50. (This is down from last month’s $235 but up from January’s 198.44. It took on average 119 days for a waterfront home to sell and they sold for 94% of the listing price. Overall, waterfront homes sales still aren’t selling at the rates they were in past years. We currently have 11.1 months of supply of active listings which overall puts waterfront homes very much in a buyer’s market.
- 23 new construction homes closed in March 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 was 99%. Clearly there isn’t a lot of wiggle room on prices of new homes! We currently have 60 new construction homes under contract in the MLS. The average sales price in March logged in at $387,799. The bulk of our new construction market in the MLS is still in our lower to middle price ranges.
- 59.2% of Lake Norman’s March single family home sales were under $400,000 which was a bit higher than last month’s.
- 74.6% of Lake Norman home sales in March were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 272 is up substantially from last month’s 228, and last April 6th’s 242. Our new contracts indicate our Lake Norman housing market is sustaining March’s momentum.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is 10% lower than last year’s. Our absorption rate/months of supply of active listings dropped back down to 6.78 from last months 9.91 months so we are now in a balanced market after being in a buyer’s market all winter. Within specific price ranges, however, there are swings from buyer’s market to balanced to even a few in a seller’s market.
- Under Contract Show (conditional sales), were up 16% versus this time last year.These are homes that just went under contract (have an accepted offer) and still have financial and inspection conditions. They represent future closed sales most likely in late April/May. This number would indicate that our closed sales should well exceed last April’s. After a bit of a drop off in January, it looks like Lake Norman’s housing market is picking up rather consistently every month despite the lack of many fresh new listings. Note that the days on the market is down 31%!
- Pending/Under Contract No Show sales were up a mere 4% but these listings went under contract in only 74 days. These are the contracts that are past their inspection/due diligent periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. I think it is safe to say we will at least beat April 2014 sales but are looking a little weaker than our record setting May 2013’s sales.
- Lake Norman’s closed home sales in as of today and as stated above, were a whopping 49% higher than last year’s! This also makes it the best March since 2007. The average sales price was actually 6% lower than last March’s and the average days on market were up 6%.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- September 6, 2014: 272
- August 6, 2014: 261
- July 7, 2014: 268
- June 5, 2014: 262
- May 6, 2014: 274
- April 6, 2014: 243
- March 6, 2014: 187
- February 6, 2014: 185
- January 6, 2014: 155
- December 6, 2013: 197
- November 6, 2013: 207
- October 6, 2013: 207
- September 6, 2013: 218
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
Here is a breakdown by price-range of our February 2014 closed sales in Lake Norman
- $42,580 – $99,999: 3
- $100,000 – $199,999: 19++
- $200,000 – $299,999: 33++
- $300,000 – $399,999 26+
(These price ranges represented 59.2% of our March home sales which is up slightly from last month’s.)
- $400,000 – $499,999: 16
- $500,000 – $599,999: 7
(These price ranges represented 17.7% which is lower than last month’s )
- $600,000 – $699,999: 11++
- $700,000 – $799,999: 3
- $800,000 – $899,999: 5++
- 900,000 – $999,999: 2
(These price ranges represented 16.1% which is up slightly down from last month’s )
- $1,000,000 – $1,499,999: 5
- $1,500,000 – $1,999,999:0
- $2 million+ : 0
(#Solds $1 million+ = 3.8 % compared to last month’s 8.4%)
The stand out price ranges in March in all of Lake Norman were the $100,000-300,000’s, $600,000’s and $800,000’s.
Higher-end home sales in Lake Norman
Mercurial and unpredictable still continues to come to mind when trying to describe our luxury housing market. Looking back, August was such an improvement over the past years’. We even had two sales at or above $3,000,000. In September 2014 our numbers were back down with only 2 sales above $2 million and in October we had a nice increase in the $1,000,000 – $1,999,999 but we only had one sale over $2 million. In November they sank back down fairly dramatically in all price ranges above $700,000. In December we saw a jump in the $1,000,000 – $1,499,999 price range but one two sales above that price. In January we only had 2 sales above $1 million but in February we had 7 sales above $1 million and one over $2 million. This past month while we had 5 sales over 1 million we had none over $1.5 million. HOWEVER, there is quite a bit of activity going on right now and we currently have 30 properties over $900,000 under contract. This is a clear sign that the luxury home-buyers are returning to Lake Norman in 2015.
Lake Norman’s Waterfront Housing Market
Our waterfront housing market is still overall in a buyer’s market. That said, in line with our luxury market, we have 30 properties under contract over $900,000 so things are looking up. Overall as of today we have 76 waterfront properties under contract so 39% of these are luxury homes. I have been showing waterfronts in all price ranges and I am noticing quite a bit of activity especially on new listings. With the inventory so low Buyers may be realizing that prices will most likely go up once we get in the strong spring and summer months and are therefore more willing to compromise. We currently have 347 waterfront homes actively listed for sale on Lake Norman. With 31 closed sales of waterfront homes in March this means Lake Norman currently has 11.2 months of inventory of waterfront homes for sale so this niche remains overall in a buyer’s market but within certain price ranges it is getting quite heated.
In the meantime, new construction on the water is everywhere. Folks are gobbling up waterfront tear-downs and now even considering older homes that need renovations. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of this low period as it is hard to predict what will come later this spring.
11-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 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.
Thanks to our strong February and March closed sales, our first quarter of 2015’s home sales were 25.6% higher than the 1st quarter of 2014 and the highest 1st quarter since 2007!
Summary and My Insight
- Lake Norman’s inventory of active listings is unusually low for this time of year. While this is VERY frustrating to buyers it is important to keep inventories low in order to maintain a balanced housing market of 6 months of supply of active listings.
- Our Lake Norman home values are stable and consistently improving overall. 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. The lack of distressed sales has also contributed to higher overall average prices.
- 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.
- New construction is definitely back. While we only sold 23 new homes last month through the MLS, we have 60 under contract and this does not include custom homes and homes sold directly by the builder/developer in subdivisions. I have been showing in several new housing communities and they are booming! Custom and smaller groups of spec homes are popping up all over Lake Norman.
- Economists say that continued housing improvement depends on fundamentals like job growth, rising incomes and low vacancy rates all of which the greater Lake Norman and Charlotte area are experiencing.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Long term mortgage rates actually dipped down a bit this past month. What is really amazing is that Jumbo loan interest rates are currently LOWER than conforming loan’s.
- I have personally experienced a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman since the early January.Because sales and prices are up in many states that feed relocating buyers to our Lake Norman area, more homeowners are able to sell and move now than in the past 5 years.
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges unlike many areas in the country where they are seeing consistent price increases.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- While at record lows right now, interest rates are expected to increase in 2015.
- Strict loan standards are still making it more difficult of buyers to qualify despite some modifications
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of re-sale listings is “stale”. Even new listings are many times homes that were on the market off and on for several years. Since new construction pretty much disappeared after the recession, we are now looking at an aging inventory of homes which is why buyers are turning more towards building or remodeling than in past years. Or, they are buying new construction or lots and building, especially on the water.
- Finding the perfect home has become more difficult because much of the older inventory has been picked over. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling quickly. Watching the “hot sheet” is once again a part of the buying process. Don’t procrastinate when considering a new listing because they are selling quickly!
- On the flip side, higher-end properties are simply taking much longer to sell.
- 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.
My advice to Lake Norman home buyers has changed only slightly. I still emphasize the importance of good locations and prioritizing your list of features you want in your home and lot. But, if you are looking in a “HOT” neighborhood and price range or if you can’t find your perfect, move-in condition home, be open minded about homes that need some work. If the floor-plan is good, perhaps having to do some painting, new flooring etc. is your best option. 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 still a great time to buy. With less than 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.
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!
OTHER ARTICLES of INTEREST