Unfortunately, my predictions last month regarding our November Lake Norman real estate market were accurate. After relatively strong sales since June, our Lake Norman housing market did slow down in November. Our sales were down 18% compared to last month’s 88 and 11% from last November’s 81. However, while we didn’t match November 2010 numbers we did exceed all prior Novembers since the recession.
It is important to note that I am doing this analysis two days earlier than usual so expect an adjustment in our 72 sales in November upward by the end of the month since it takes some Realtors several weeks to actually input their sales into our MLS. A great example of this is this past October. When I did our chart on October 6th we had 81 sales. As of today we actually have 88 sales documented for October in our MLS. I create these reports early in the month while the information is still very fresh so always pad the sales upward just a bit.
Here are the November numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some significant additional interesting statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 36% of our closed sales in November which was up significantly from 19.8% last month, 10% in September, 16.8 in August, 18.5% in July, 25% in June and 27% in May. Our active buyers right now are clearly folks looking for bargains! The good news is that only 9.5% of our active listings are distressed. While the percentage of sales of distressed properties in Lake Norman jumped the number of distressed homes on the market did not.
- 19% of our closed sales were waterfront homes down from 28% last month and 38% two months ago.
- 63% of our November sales were under $400 and 89% were under $600,000. Clearly our lower priced homes are driving the market right now!
- Today our active listings stand at 859, the lowest number since I started these reports in 2007. To put this number in context, back in June of 2008 we had 1789 active listings!
A closer look:
- The number of Active Listings in Lake Norman dropped another 6% from last month and 20% from November 2010. Our absorption rate/months of supply of active listings stands at 13.5%. Our shrinking inventory is helping but at this lower pace of sales we are almost twice as high as a balanced 6-8 months of supply in Lake Norman area (MLS area 13). With only 9.5% of Lake Norman’s current listings being “distressed sales”, if we don’t get a second wave of foreclosures, which we haven’t so far, our housing market is definitely shoring up but still quite erratic month to month.
- Contingent Sales, (sales contracts that are contingent upon the buyer selling their own home)which don’t account for a significant segment of our housing market, remain fairly low most likely because sellers are unwilling to take on the risk of waiting for the buyer’s home to sell before closing.
- Conditional Sales decreased 5% this month when compared to November 2010 and were 14% lower than last month’s. These are homes that just went under contract and still have financial and inspection conditions. They represent future closed sales most likely in late December/January. It looks like our dip in sales will continue in December and we will end the year about equal to 2010’s total sales.
- Pending sales dropped to 68 from 79 last month and from a whopping 102 in September. They are also 14% lower than November 2010. 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. This is another strong indicator that December closed sales will be down from this month’s and December of 2010 as well.
- The number of closed home sales in Lake Norman dropped 11% compared to November 2010’s and were 18% lower than last month. It is important to remember that we had a particularly strong November and December 2010 and our drop in sales this November is actually more in line with our typical seasonal slow down. (See the annual chart below). My guess is that once all sales are input in our MLS we will probable have about 77 or 78 sales for November which isn’t too far off of November 2010’s 81.
- One important note: In ever single category on this chart our average prices were down. We had a marked decline in sales of properties at or above $600,000. The lowest price ranges in our Lake Norman housing inventory are driving our current market. It isn’t so much that our prices themselves are still falling but rather the concentration of sales is in our lowest price ranges.
Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- December 1: 147 (The lowest since February!)
- November: 169
- October: 193
- September: 183
- August: 193
- July: 178
- June: 199,
- May: 173
- April 195,
- March: 163
- February: 142
With only 147 properties under contract in all of Lake Norman, we are at the second lowest month in all of 2011. We came in to the year with a wimper then the market picked up and now we will be closing out the year with a wimper as well. Unpredictable? Yes. Yet our low inventory bodes well for the overall health of the Lake Norman housing market.
Here is a breakdown by price-range of our November 2011 closed sales in Lake Norman’s area 13-1 to 13-5:
- $35,000 – $199,999: 19
- $200,000 – $299,999: 15
- $300,000 – $399,999: 13
(These price ranges represented 65.3% of November sales compared to 60% of October ‘s total sales)
- 400,000 – $499,999: 7
- $500,000 – $599,999: 7
(These price ranges represented 19.4% compared to 19.6% last month)
- $600,000 – $699,999: 3
- $700,000 – $799,999: 0 (Wow!)
- $800,000 – $899,999: 0 (Another Wow!)
- 900,000 – $999,999: 4
(Solds for $600,000 – $1mill = 9.7% cimpared to 16% last month and 19% in September)
- $1,000,000 – $1,999,999: 4 (The highest sale in November was only $1.3 million)
- $2 million+ : 0
(Solds $1million+ = 5.5% )
7-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 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.
Summary and My Insight
The Good News and the Bad:
- Inventory is down
- Number of distressed homes for sale is below 10%
- We are finally seeing some new construction popping up (Not spec homes)
- These are all signs that the Lake Norman housing market is stabilizing
- Sales are trending down again this month and into January. The erratic nature of our Lake Norman real estate market continues with no end in sight
- 65.3% of our sales were under $400,000 and 26% were under $200,000!
- Unlike prior months, distressed sales comprise a larger percentage of our sales than our inventory.
- Our highest closed sale last month was $1.3 million. Our luxury home market was almost non-existent. No sales in the $700-$899,000 is very rare as well.
- With a shrinking inventory of active listings, buyers have fewer options. With fewer “screaming bargains” will buyers sit back a bit this winter or will they buy as they did over the summer?
- With construction loans nearly impossible to get, lots, especially waterfront, are still sitting.
I still believe that, overall, our home prices may have hit bottom. The future of our Lake Norman real estate market still depends primarily on these two things:
1. How much ”shadow inventory” do we have in our Lake Norman area? Will we see more distressed properties coming on the market later this year or next year? I showed a home priced slightly over $1 million this past week that had a notice of default filed in 2008 yet the bank still hasn’t foreclosed. How many more of these properties are out there? This is the million dollar question!
2. Consumer confidence based upon the national/global economy.
My advice to Lake Norman home buyers at this point is to look for homes that are in good locations and have most of the priorities on your list. Then, to determine a realistic price, use VERY RECENT comparable sales. The selection may not be great but with interest rates at all time lows and prices for the most part having hit bottom it is a good time to buy. Just make sure you know your market niche!
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