Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s May 2019 Market Report

Lake Norman real estate market report* All data is from the Carolina Multiple Listing Service.

Our Lake Norman’s real estate market posted record sales again in May with an impressive 12% gain over May 2018 and a 27% increase over last month’s. Wow! The first five months of 2019 stand out not only for their 9.3% total increase over 2018 but also for their consistency.  Each month exceeded last year’s and also increased over the prior month as well.  Consistency like this is very rare here in Lake Norman. It is even more interesting considering that this follows on the heels of a very a rough end 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 May’s Lake Norman real estate sales data:

  • Our current month’s of supply (absorption rate) is only 3.2!  I believe this is an historic low for Lake Norman. We are very much in a seller’s market.
  • Lake Norman’s first 5 months of 2019 were 9.3% above the same period in 2018 with steady monthly gains.
  • At 232 sales, this May posted the highest sales of all prior months of May since 2005.
  • The average sales price was lower that last year’s however we did see gains in the trade-up price ranges from $600,000 – $999,999 and entry-level luxury homes in the $1 million to $1.5 million price ranges.
  • Our inventory of active listings is significantly lower than last year’s. (-12% or a whopping 106 fewer 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 we are still posting record sales.
  • Our newest contracts (UCS) are down 2% and pending sales (UCNS) are down 17%. Are we in for a bit of a slowdown in early summer?
  • Waterfront home sales jumped back in to a seller’s market with their month’s of supply of active listings dropping to 5.5 down from last month’s 7.8. 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 29.5% of our new contracts.

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes jumped into a seller’s market based upon May’s months of supply of listings which dropped to 5.5 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 May represented only 22.8% of Lake Norman’s total sales while comprising 39% of our active listings and only 22.1% of our under contract listings.
    • The average price per square foot of our waterfront homes dropped way down to $229.17 from $267.78 in April. 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!
    • It took on average 90 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.
  • 44 new construction homes closed in May through our MLS.  We have 113 under contract which represents 29.5% 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 increased to 99% from 98%. 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 May was $380,676.  The months of supply of active listings using May’s sales is 3.38 months which is very much a sellers’ (builders’) market.
  •  There was only 1 distressed sale (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in May.  We have only 3 under contract and 8 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 46.5% of Lake Norman’s May single family home sales were under $400,000.
  • 61.2% of Lake Norman home sales in May were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 383.  This is 5.7% lower than last year at this time. We are up against some big June numbers so we may be experiencing a slight slowdown.

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 747 single family homes for sale in all of Lake Norman which is actually down from last month’s 757. Not only are our numbers of homes for sale historically very very low but they decreased slightly during this season when they normally peak. Our absorption rate/months of supply of active listings dropped down to 3.2 which indicates we are 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 5%.  (So homes for sale have been on the market 6 fewer days than last year).
  • Under Contract Show (conditional) sales are down 2% from this time last year.  The average price of our new contracts is down 1% 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 might indicated a slight slowdown in closed sales in June/July.
  • Pending/Under Contract No Show sales are down a whopping 17% compared to last year’s.  This is a rather significant drop. The average price of our pending sales is up 3% and these listings/sellers successfully negotiated a purchase contract 5% 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 July. Again, these numbers do indicate at least a short-term slowdown.
  • Lake Norman’s closed May home sales in our MLS as stated above, were 12% higher than last May’s.  The average price of our homes sold was down 6%. It took on average one day more to sell a home in May 2019 vs 2018.   One interesting side note about days on market: our MEDIAN days on market was 29 which means that half of our total sales took less than 29 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:

  • 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
  • June 6, 2017: 370

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

  • $1,000 – $99,999: 3+
  • $100,000 – $199,999: 13+
  • $200,000 – $299,999: 43++
  • $300,000 – $399,999: 49+

        (These price ranges represented 46.6% of our May home sales which is about equal to last month’s)

  • $400,000 – $499,999:  34+
  • $500,000 – $599,999:  26

       (These price ranges represented 25.9% of our May sales, down from 29.2% last month)

  • $600,000 – $699,999: 15+
  • $700,000 – $799,999: 14+
  • $800,000 – $899,999: 11++
  • 900,000 – $999,999: 4-

       (These price ranges represented of 19.0% of our May sales compared to 16.2% last month, 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:  19+++
  • $1,500,000 – $1,999,999: 0-
  • $2 million+ : 1-

       (These $1 million+ sales represented  8.6% of our May sales compared to 10.1% last month, 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 May our strongest improvement in sales were in the $200,000’s, $800,000’s, and the $1,000,000 – $1,499,999.  As a group, the trade-up price ranges of $600,000 – $999,999 had a relatively strong showing for the first time this year.   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

After a particularly strong April, our luxury home sales above $1.5 million disappeared with the exception of our highest sale this year.  At $5,200,000, a 15-acre 12,675 sq.ft. estate on Langtree Rd (sold by racing legend Joe Nemechek) logged in the highest sale in all of Lake Norman in 2019. This comes on the heals of a record braking sale at $4,780,000 last month.  To put May’s luxury sales 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 jumped into a seller’s market based upon May’s months of supply of listings which dropped to 5.5 after peaking at 13 in March. This is the lowest month’s 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 May represented only 22.8% of Lake Norman’s total sales while comprising 39% of our active listings and only 22.1% of our under contract listings.
  • The average price per square foot of our waterfront homes dropped way down to $229.17 from $267.78 in April. 
  • It took on average 90 days for a waterfront home to sell and they sold on average for 96% 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!
  • 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 real estate annual 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 5 months of 2019 put us 9.3% above the first 5 months of 2018 and there were the strongest first 5 months since 2005!  But take a look above at our prior June, July and August numbers. We are up against some huge numbers for the next few months and our modest pending and under contract numbers seem to indicate a possible shortfall is coming.

Summary and My Insight

Good signs/news for 2019:

  • According to BankRate today from their latest survey of the nation’s largest mortgage lenders, the benchmark 30-year fixed mortgage rate is 4.03 percent with an APR of 4.17 percent. The average 15-year fixed mortgage rate is 3.27 percent with an APR of 3.45 percent. While it is impossible to predict, economists seem to agree that the Feds won’t increase their rates this year so Mortgage rates should remain fairly stable.
  • 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 3.2 months of supply over all in Lake Norman.
  • In three of the 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 remains strong, representing about 22.2% of our pending 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:

  • Only 747 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.
  • Our under contract sales are down 2% and our pending sales are down a significant 17% indicating a modest slowdown as we enter our strongest months of the year.
  • I have continued concerns about our waterfront niche as well as luxury homes which are under performing despite some improvement in April.
  • 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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