This past month serves as yet another example of how erratic our Lake Norman real estate market has been this year. Our closed home sales in May were shockingly low; the worst May since I have been tracking monthly sales and lower than 2009 which, until now, was the weakest year of sales since the downturn in 2007. Yikes! What is interesting, however, is that we have already closed 11 properties in the first three days of June.
Here are the numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some interesting statistics for you:
- 16 of the 59 closed sales or 27% were either Foreclosures (REOS) or Short Sales.
- 7 out of these 16 distressed sales were in area 13-1 (Northeast Lake Norman). Distressed sales represented 78% of area 13-1’s closed sales in May!
- 21 of the 59 sales or 36% were waterfront properties. Waterfront properties current represent 37% of our active listings.
- 8 of the 59 sales or almost 14% of our May sales were $1 million+.
A closer look:
- The number of Active Listings in Lake Norman remains below last year’s. We are seeing a a slight uptick in new listings but not a significant spring bump which is very positive for our overall Lake Norman housing market. Our absorption rate/months of supply of active listings jumped up to 20 due to the very low sales. ( In April we had dropped down to 14.5 months). Unfortunately, a goal of a truly balanced housing market of 6-8 months of supply is still out of reach in our Lake Norman area (MLS area 13). Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. Note that the average price of our active listings dropped 7% compared to May 2010. We continue to see a number of price reductions.
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home) which don’t account for a signifcant segment of our housing market, have been declining for several months and are now actually 55% below last year’s. If you look at the average Days on Market you can see why sellers are not accepting contingent offers!
- Conditional Sales and our new “Due Diligence” category increased 35% this month when compared toMay 2010. These are homes that just went under contract and still have financial and inspection conditions. They represent potential future closed sales most likely in late June/July/August. After dropping in March and April these numbers indicate that we will likely see some higher closing numbers for Lake Norman home sales in the next several months although not significantly so.
- Our pending sales represent a 14% decrease from a year ago. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. As a matter of fact, with 11 closed sales already this month our number of pending sales have already dropped to 87. My guess is that June will be stronger (but less than last June) and we will again see sales slip in July or August. It is important to remember that last year we were anticipating the end of the tax incentives for home buyers so April-June of 2010 had a boost that we don’t have this year.
- The number of closed home sales in Lake Norman dropped significantly (34%) compared to May 2010 and it looks like the next few months will continue this negative trend but not as dramatically.
One important note: The average price of homes sold jumped 26% which I attribute to the fact that 8 out of the 59 sales were over $1million.
The total number of Lake Norman single family homes under contract (but not yet closed) on May 31st increased to 199 after falling in April to 173. On March 31, 2011 we had 195 compared to February 28th’s 163, January 31st’s 142; December 31st’s 141, to November 30th’s 169, to August’s and July’s numbers of 157, and to June’s 169. Last May we had 227 just for a point of reference.
Here is a breakdown by price-range of our March 2011 closed sales in Lake Norman’s area 13- to 13-5:
- $25,000 – $199,999: 9
- $200,000 – $299,999: 8
- $300,000 – $399,999: 15
(These Solds were 54% of May’s total sales )
- 400,000 – $499,999: 6
- $500,000 – $599,999: 4
(These Solds represented 17% )
- $600,000 – $699,999: 5
- $700,000 – $799,999: 2
- $800,000 – $899,999: 1
- 900,000 – $999,999: 1
(Solds for $600,000 – $1mill = 15%)
- $1,000,000 – $1,999,999: 4
- $2 million+ : 4
(Solds $1million+ = 13.6% of April’s total sales)
This was certainly an impressive showing for our Lake Norman waterfront luxury estates. Our highest-priced closed sale in May which was located in The Peninsula was $3,400,000.
7-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.
**I have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009, 2010 and 2011 and the totals in the prior calendar years. The columns may not add up but I do my best with what I have to work! I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Above is a snapshot of Lake Norman home sales numbers by month for the past 7 years. As you can see, our May home sales were the lowest May since I have been doing this chart. Based upon our number of homes currently under contract it looks like our Lake Norman real estate market is trending well below the second quarter of 2010.
Unlike our sales volume, I believe that our Lake Norman housing market’s average prices have been trending downward consistently since 2007 and have not yet hit bottom entirely. Our prices, especially of waterfront properties, are very erratic. We have been seeing some incredible “bargain” sales over the past several years but at the same time some Lake Norman homes are selling at slightly higher prices so I can’t say this is true across the board nor can I say that we will see many more of these rock bottom prices. It depends on how many more distressed homes come on the market and when the buyers decide they better step up and buy because there is nothing better at that price.
OTHER ARTICLES of INTEREST