Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s March 2019 Market Report

Lake Norman Real Estate's March 2019 Market Report

All data is from the Carolina Multiple Listing Service.

First quarter 2019 is in the books and our Lake Norman’s real estate market has posted a 7.4% gain over last year’s first quarter. March continued our strong sales trend and there are some very positive indicators for April and May so perhaps it is safe to say we are on a roll!  This follows on the heels of a very a rough end to 2018. Our March sales were up 11% compared to last year. At 151 sales, March was also up 27% compared to last month and was tied for the second highest March home sales since 2005. Talk about a radical upswing since December! 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 March’s Lake Norman real estate sales data:

  • Our Lake Norman 1st quarter home sales in 2019 were 7.4% above the same period in 2018 with steady monthly gains.
  • Average sales price was lower and a staggering 78.1% of our sales in March were under $600,000. One third of our total sales were in the $300,000s!
  • Our inventory of active listings is significantly lower than last year’s. (83 fewer than last year!). Every single month for several years we have seen a decline in active listings. It is hard to quantify but there is no doubt that our low inventory has had a negative impact on our Lake Norman’s home sales.
  • Our newest contracts (UCS) are UP 12% and pending sales (UCNS) are up 19% which further substantiates that our Lake Norman real estate market is strong and stable going into late winter and early spring.
  • Waterfront homes are extremely weak; with a 13-month supply of active listings they fell deeply into a buyer’s market. The under contract numbers indicate sales in this niche will be weak for at least the next few months.
  • Is new construction taking on an increasing share of our market?  They are now 29.4% of our new contracts!
  • Right now more homes are selling and in must fewer days but our average prices are well below last year’s.

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes are emphatically in a buyers’ market based upon March’s months of supply of listings which rose to a distressing 13 months up from February’s 8.6 and January’s 8.2 after dropping to 5.8 months in December from 7.6 in November, 7.13 in October, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in March represented only 13.2 % (yikes!) of Lake Norman’s total sales while comprising 35.6% of our active listings and only 21% of our under contract listings.
    • The average price per square foot of our waterfront homes rose to $274.26. This is the one bright spot in our waterfront market as this is well above the past few months.
    • It took on average 146 days for a waterfront home to sell and they sold on average for 95% of their listing price.
    • It is important to note that the average price per-square-foot for our waterfront homes has still not returned to 2007’s peak of $283.16 although this past month we got close.
    • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.
  • 50 new construction homes closed in March through our MLS, twice last month’s number.  We have 107 under contract which represent 29.4% 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 remains at 100%. I just 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 March was only $385,908.  The months of supply of active listings using March’s sales dropped way down to 3.5 months which is very much a sellers’ market.
  •  There were 3 distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in March.  We have only 4 under contract and 9 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 59.6% of Lake Norman’s March single family home sales were under $400,000. Wow!
  • 69.5% of Lake Norman home sales in March were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 363.  This is 8.7% more than last year’s and 3.4% higher than 2017’s 351.  For a third month in a row  we have seen increases in these numbers over prior years. This bodes very well for our next few months at least.   Not only are our sales strong but they are consistently so unlike the past years. How long it lasts is the big question!

A closer look at the chart:

  • The number of Active Listings as of today in Lake Norman is down a substantial 10% when compared to last year’s at this time.  Today we have only 731 single family homes for sale in all of Lake Norman which is up slightly from last month’s 706, but still historically very very low. Our absorption rate/months of supply of active listings dropped down to 4.84 which puts us back into a sellers’ housing market. Keep in mind that March is when our market just begins to heat up so the fact that we are already in a sellers’ market indicates we are in for increasing numbers of multiple offers going forward. 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 3% 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 4% from this time last year.  The average price of our new contracts is down 11% and the days on market is down 3%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent higher closed sales in May/June.
  • Pending/Under Contract No Show sales are up an impressive 23% compared to last year’s.  The average price of our pending sales is up 11% and these listings/sellers successfully negotiated a purchase contract 35% 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 early May.
  • Lake Norman’s closed March home sales in our MLS as of today and as stated above, were 11% higher than last March’s.  The average price of our homes sold was down 8%. It took on average 12 days less to sell a home in March 2019 vs 2018.

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

  • 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
  • June 6, 2017: 370
  • May 6, 2017: 391
  • April 6, 2017: 351

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

  • $1,000 – $99,999: 1-
  • $100,000 – $199,999: 5–
  • $200,000 – $299,999: 33++
  • $300,000 – $399,999: 51+++!

        (These price ranges represented 59.6% of our March home sales)

  • $400,000 – $499,999:  15-
  • $500,000 – $599,999:  13

       (These price ranges represented 18.5% of our March sales)

  • $600,000 – $699,999: 11
  • $700,000 – $799,999: 5+
  • $800,000 – $899,999: 5+
  • 900,000 – $999,999: 5+

       (These price ranges represented of  17.2% of our March sales, compared to 14.4 last month, 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% in April,12.7% in March, 14.3% in February, 20.4% in January)

  • $1,000,000 – $1,499,999:  7+
  • $1,500,000 – $1,999,999: 0
  • $2 million+ : 0-

       (These $1 million+ sales represented 4.6% of our March sales compared to 6.7% last month,  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 March, while the $700,000-$999,999 price ranges were stronger than last months’, the $300,000’s posted a huge number of closings in March! One third of the entire Lake Norman’s home sales were in the $300,000’s. That really is remarkable. March, like last month, was all about our lower price ranges with 59.6% of all of our sales under $400,000 and 78.1% under $600,000!  That said, 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

Well, what can I say about our luxury market so far in 2019?  Representing only 4.6% of our total closed sales in March, they hit a new low for the past year. All 7 sales were below $1.5 million with none over $2 million. When will we see a true recovery in our luxury homes market???

Lake Norman’s Waterfront Homes

As I wrote above, waterfront homes are emphatically in a buyers’ market based upon March’s months of supply of listings which rose to a distressing 13 months up from February’s 8.6 and January’s 8.2 after dropping to 5.8 months in December from 7.6 in November, 7.13 in October, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in March represented only 13.2 % (yikes!) of Lake Norman’s total sales while comprising 35.6% of our active listings and only 21% of our under contract listings.
  • The average price per square foot of our waterfront homes rose to $274.26. This is the one bright spot in our waterfront market as this is well above the past few months.
  • It took on average 146 days for a waterfront home to sell and they sold on average for 95% of their listing price.
  • It is important to note that the average price per-square-foot for our waterfront homes has still not returned to 2007’s peak of $283.16 although this past month we got close.
  • 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 since 2005

* 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 two other’s so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that this year’s 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 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 3 months of 2019 put us 7.4% above the first three months of 2018 and is the strongest first quarter since 2005!  Adding to this our strong under contract numbers and it looks like we have bounced back from our dramatic drop in the fourth quarter.

Summary and My Insight

Good signs/news for 2019:

  • Interest rates are down 1/4% compared to last year.  Unfortunately they increased slightly this past week. At their last meeting the Feds announced that they don’t expect to raise their interest rates for the rest of 2019. This should help the affordability of homes for some buyers who are on the fence. It is early in the year but most economists I have read are predicting little change to our current mortgage rates due to some soft economic trends.
  • New contracts are UP for the third month in a row after four really tough fall/winter months.
  • 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 already in a sellers’ market but mostly in the lower price ranges.
  • In all four categories our homes are selling faster than last year and the most recent properties to go under contract were on the market for just two months.
  • New construction has definitely hit its stride. Now comprising 29.4% of our new contracts, it is clear that there is enough desirable 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:

  • 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 under performing even more so in recent months
  • 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 4th quarter of 2018. 
  • 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 8 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!

OTHER ARTICLES of INTEREST

Lake Norman Relocation Resources

10 Things Lake Norman Waterfront Home Buyers Should Know

Standard

Your comments...