Lake Norman’s November 2012 residential real estate sales number places an explanation mark on the belief that our housing market has hit bottom and is steadily and consistently improving. November’s total single family home sales in Lake Norman makes it eleven months in a row that we have exceeded all prior months’ sales since 2007. What is remarkable is that once the few last sales are input by the agents who always run late in recording their sales, I believe we will also exceed November 2006’s home sales! And, while Lake Norman has experienced atypical seasonal slowdown to a degree, it is not nearly as dramatic as most years.
Let’s take a closer look at the numbers to glean some insight into the short term future and exactly where the Lake Norman housing market stands right now.
Here are the November 2012 numbers from our Charlotte Multiple Listing Service for our Lake Norman Area 13 real estate market:
* Note that the Charlotte Regional Multiple Listing Service has created two new categories, Under Contract Showings (UCS) to continue and Under Contract no showings (UCNS). These replace the Contingent, Conditional and Pending categories. Contingent Sales are now joined with Conditional sales in my reports.
Some significant additional statistics for you:
- “Distressed sales” ( Foreclosures (REOS), defaults, Short Sales) comprised 18.75% of our total sales up slightly from 13.6% last month. The average price for distressed sales dropped to $318,472 so these sales are in our very lowest price ranges. Distressed active listings currently make up only 6.3% of our inventory of Lake Norman homes for sale. Clearly we are not being bombarded by foreclosures and shortsales so far in 2012 as some had predicted. While buyers are looking for bargains they simply don’t exist in the numbers we experienced in the past several years and are now primarily in the lowest price ranges.
- 28% of our closed sales were waterfront homes which was about equal to the past several months. Last November waterfront home sales represented only 18.6% of the total month’s sales. The average sales price of waterfront homes went from $609,392 last November to $720,220 this past month. And, the sales per square foot increased by 11.8%, our first real proof that prices are going up in Lake Norman!
- We had 9 new construction homes sold compared to only 3 in November of 2011. This is more evidence of a turn around for the Lake Norman housing market!
- 51% of Lake Norman’s October home sales were under $400,000 compared to 49% last month.
- 75% of our October home sales were under $500,000 compared to 67 last month, 70% in September, 66% in August, 60% in July, 72 % in June, 70% in May, 49% in April, 61% in March sales. Clearly our lower price ranges are still dominating our Lake Norman housing market.
- Our “Under Contract Show” AND “Under Contract No show”/Pending numbers were up substantially from last November. (See chart above). This serves as further support that Lake Norman’s housing market is on the mend and that our late fall/winter sales will remain robust.
- As of today, the number of active listings for all of Lake Norman total 790 down from 834 last month, 876 in September and are 9% lower than the same time last year. The number of homes for sale in Lake Norman has been lower than 2011 every month this year. Ask any home buyer or Realtor and you will hear complaints about how few homes are on the market. To put this number in even greater context, back in June of 2008 we had 1789 active listings!
A closer look:
- The number of Active Listings in Lake Norman dropped 5% from last month’s and are 9% lower than November 2011’s. Our absorption rate/months of supply of active listings now stands at 8.2. This is only slightly above the goal of a balanced 6-8 months of supply in the Lake Norman area (MLS area 13) we are not nearly as high as the past few years!
- Conditional Sales, which are now called Under Contract Show, increased for the eleventh month in a row, this time by a healthy 33% compared to last year. 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. Based upon these numbers we should close out 2012 and enter 2013 with relatively strong sales.
- Pending/Under Contract No Show sales were a whopping 43% higher than November 2011’s. These are the contracts that are past inspections and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Given that we had 97 pending sales last month as well I am pretty confident that we will exceed last December’s 64 closed sales substantially. It looks like we will close out 2012 with at least 22% higher sales than 2011 and 12 months of increases in a row!
- The number of closed home sales in Lake Norman in November 2012 were an impressive 28% above November 2011 and the best November since 2006. As I said above, once the few additional sales are reported to our MLS I think we will exceed 2006 sales as well!
The total number of Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- December6, 2012: 197 (While down, significantly higher than last December’s)
- November 7, 2012: 214
- October 8, 2012: 218
- September 6, 2012: 206
- August 6, 2012: 228
- July 6, 2012: 234
- June 6, 2012: 235
- May 7, 2012: 246
- April 1, 2012: 227
- March 1, 2012: 178
- February 1, 2012: 155
- January 1: 134 (the lowest ALL year)
- December 1: 147
- November: 169
- October: 193
- September: 183
Here is a breakdown by price-range of our October 2012 closed sales in Lake Norman’s area 13-1 to 13-5:
- $19,000 – $199,999: 10
- $200,000 – $299,999: 24
- $300,000 – $399,999: 15
(These price ranges represented 51% of November’s sales.)
- 400,000 – $499,999: 12
- $500,000 – $599,999: 11
(These price ranges represented 24% of our sales)
- $600,000 – $699,999: 6
- $700,000 – $799,999: 2
- $800,000 – $899,999: 7 (compared to 0 last month!)
- 900,000 – $999,999: 3
(Solds for $600,000 – $1mill = 18.8% compare to 13.6 % last month )
- $1,000,000 – $1,499,999: 6
- $1,500,000 – $1,999,999: 0
- $2 million+ : 0
(Solds $1million+ = 6%)
The most improved price range was the $800,000 – $899,999. There were no closed sales over $1,275,000.
Higher-end home sales in Lake Norman
Sales in the $700,000- $999,000 range improved in November but remain slow all over Lake Norman as they have been for most of 2012. In my opinion the good waterfront bargains in the $600,000s peaked two years ago and in the $700,000-$900,000 last summer. Of our 197 homes currently under contract, 22 are over $700,000 and 9 are above $1 million.
8-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 adjust past months when I do the monthly update as a few more sales are usually input late by agents.
Summary and My Insight
- Lake Norman is experiencing consistently improved closed sales as well as evidence that prices have not only stabilized by are actually increasing as is the case in price per square foot for our waterfront homes. (see above)
- Lake Norman home sales year-to-date are up 22% over 2011!!!
- Lake Norman’s inventory of homes for sale continues to decline to record lows.
- The number of properties currently under contract indicates that our Lake Norman housing market will sustain our strong closed sales numbers for the next several months.
- The number of distressed homes for sale has dropped to 6.3% of our overall inventory…clearly no longer playing a significant role in our housing market.
- New construction is back! Not only did we sell 9 new homes last month but as I drive and cycle around I am amazed at how many new construction homes are breaking ground.
- Serious home buyers are out looking around all of the Lake Norman area. Properly priced listings in very good condition are selling more quickly and sometimes with multiple offers even in our $1 million+ price ranges.
- Interest rates remain low after ticking up a bit.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Positive national housing news this month was pervasive. Almost every economist and pundit has now declared that the national housing market is improving and even seeing small price increases. A recent article in Inman News quoted Kenneth T. Rosen, Chairman of the University of California, Berkeley Fisher Center for Real Estate and Urban Economics, as saying the national outlook for home sales in 2012 looks “very good…tough tight credit means housing will not see rapid growth anytime soon.” “Interest rates at a 50-year low, job growth and low inventory mean that the housing market is recovering….It’s not a boom, but it’s recovering.”
- Charlotte was added to the National Association of Home Builders list of now 125 improving metro areas that for at least 6 consecutive months have posted gains in housing permits, employment and home prices.
- Sales prices, while improving, remain well below our peak’s
- Our mid to higher-end property sales are still inconsistent and relatively weak despite some recent activity.
- With a shrinking inventory of active listings, buyers have fewer options. There aren’t that many “good” homes on the market so buyers are watching the new listings and jumping on most of the good ones if they are priced properly. So, Lake Norman has a lot of “leftovers” on the market that have been reduced a number of times and have more negatives including being dated. are in less desirable locations or not having good water.
- Home loans, especially jumbo and construction loans, are still a very challenging process, particularly underwriting and appraisals.
- Global economic turmoil and US economic uncertainty.
The gossip among Realtors is how dramatically our activity has increased. Despite low inventories, the number of buyers out actively looking has increased substantially. Real estate firms are touting their sales increases and talk as if we are going to sustain these strong numbers. I am a bit more cautious. While the worst is most likely behind us, we have a long way to go and most expect that it will be a very slow recovery.
My advice to Lake Norman home buyers remains this: Look for homes that are in good locations and have most of the priorities on your list. 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) and floorplan. 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 it is a good time to buy. With less than 7%of Lake Norman’s current listings being “distressed sales” don’t expect the perfect foreclosure or shortsale to come along at an unrealistic price. If you insist on low-balling, at least have some comparable sales to justify your number. 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