For only the second month this year our Lake Norman home sales fell short of the same month in 2014. While not nearly as dramatic a decline as last month’s, as of today our closed sales are 6% below last November’s. Lake Norman is not alone in our fourth quarter slowdown as nationally sales have been slipping as well. Also worth noting: our 4th quarter 2014 was unusually strong (see the annual sales chart below) which makes this year’s numbers look even worse. Unfortunately, based on our pending sales, it is very doubtful that we will match December 2014’s close sales. Our inventory of active listings is still insanely low (9% below last year’s) which is and will continue to drag down our sales. Want some good news? Our year-to-date 2015 closed single family home sales are still 8.3% higher than 2014’s! After 9 straight months of beating the 2014 sales, October broke our winning streak but not enough to take away our annual sales increase. Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented only 4.4% of Lake Norman’s total November home sales. We had just 4 distressed sales with an average price of $148,425. (The highest closed sale price was $248,300 so clearly these sales were in our lowest price ranges). Distressed active listings currently comprise only 2.6% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes represented only 24.7% of our November home sales while they comprise 37.9% of our active listings. The average sales price of a waterfront home in November was $667.133 compared to $816,282 in October, $882,512 in September and $775,058 in August. The average price per square foot was $228.46. It took on average 114 days for a waterfront home to sell and they sold for 94% of the listing price. We currently have 54 waterfront homes under contract. Our waterfront homes’ months of inventory at 12.8 puts them back in a buyer’s market but this varies considerably by price range. Waterfront home sales continue to be mercurial.
- 26 new construction homes closed in November through our MLS but 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. (In fact, this segment of the market may be skewing our Lake Norman home sales numbers quite a bit). The average listing price vs sales price of new construction single family homes was 99%. Clearly there isn’t a lot of wiggle room on prices of new homes! We currently have 60 new construction homes under contract in the MLS. The average sales price in November logged in at $377,899. The months of supply of 6.8 puts this group in a balanced market overall favoring neither buyers nor sellers.
- 59% of Lake Norman’s November single family home sales were under $400,000.
- 67.7% of Lake Norman home sales in November were under $500,000.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 202 is pretty much equal to the same period for the past two years. Last year on this date we had 204 under contract and in 2013 we had 197. While our Lake Norman market is not setting records as it did earlier in the year we are stable which is a good thing.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is a substantial 9% lower than last year’s. Our absorption rate/months of supply of active listings rose to 8.4 which puts Lake Norman back in to an overall buyers market for the second month in a row. Within specific price ranges, however, there are swings from a buyer’s market to balanced to a seller’s market. Lake Norman is not alone as throughout the country economists have noted the low inventory of active listings and how this is impacting sales volumes.
- Under Contract Show (conditional sales), are UP 9% versus this time last year.These are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. They represent future closed sales most likely in late December/January. This number would indicate that while our December sales may be iffy, by January we may start logging in some seasonally solid numbers again. Overall in 2015 our Lake Norman’s housing market has performed at it’s most consistently strong pace since the recession, despite the lack of a good number of fresh new listings, until the 4th quarter. Hopefully we may see some good numbers in January.
- Pending/Under Contract No Show sales are down 16% for the second month in a row. These listings went under contract on average in 98 days. Pending sales are the contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. We may not match last December’s home sales because of this low number but there is still hope for January.
- Lake Norman’s closed November home sales in our MLS as of today and as stated above, were 6% below last year’s. (Keep in mind that we will mostly have about 4 or 5 more sales added so we may come closer to matching last year’s). We see some positive signs in that these closed sales’ average sales price was up14% and they closed an impressive 30% faster than last year’s.
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- December 6, 2015: 202
- November 6, 2015: 222
- October 6,2015: 209
- September 7, 2015: 268
- August 6,2015: 286
- July 6, 2015 287
- June 6, 2015: 304
- May 6, 2015: 313
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- September 6, 2014: 272
- August 6, 2014: 261
- July 7, 2014: 268
- June 5, 2014: 262
- May 6, 2014: 274
- April 6, 2014: 243
- March 6, 2014: 187
- February 6, 2014: 185
- January 6, 2014: 155
- December 6, 2013: 197
Here is a breakdown by price-range of our November 2015 closed sales in Lake Norman
- $24,000 – $99,999: 2
- $100,000 – $199,999: 6
- $200,000 – $299,999: 22=+
- $300,000 – $399,999 25++
(These price ranges represented 59% of our November home sales which is up from last month’s 50.5%.)
- $400,000 – $499,999: 8-
- $500,000 – $599,999: 10=
(These price ranges represented 19.2% which is slightly lower than last month’s 22.4% )
- $600,000 – $699,999: 7+
- $700,000 – $799,999: 4=
- $800,000 – $899,999: 3
- 900,000 – $999,999: 2-
(These price ranges represented 17.2% compared to 19.8% last month)
- $1,000,000 – $1,499,999: 3–
- $1,500,000 – $1,999,999: 1-
- $2 million+ : 0–
(#Solds $1 million+ = 4.3% compared to last month’s 7.4%)
The stand out price ranges in November in all of Lake Norman were the $200,000, $300,000’s, and $600,000’s.
Higher-end home sales in Lake Norman
Once again our higher priced home sales have slowed to a crawl after a pretty decent year. With only 13 sales in all of November over $700,000 it is clear that this home buyer has jumped back on the fence. While I can justify the under $1 million a bit due to lack of good inventory of active listings, we have a large inventory of luxury homes so that isn’t an excuse for this niche. Mercurial once again comes to mind!
Lake Norman’s Waterfront Housing Market
As goes our trade-up and luxury market so goes our waterfront housing market for the most part. This past month was truly abysmal after several good months. As of today we have 54 waterfront properties under contract and our months of supply based on the November sales is up to 12.8 from 8.6 last month. This puts waterfront homes back into a buyer’s market. However, there are some pretty hot niches within the waterfront homes. While the inventory looks a bit high by the numbers, the selection of good waterfront homes in more affordable price ranges is quite limited. I have several recent sales where my buyers ended up deciding to build because they couldn’t find a home they liked. What will happen once the good lots/teardowns are gone? My guess is we will see more renovations of dated homes on good waterfront lots. Keep in mind that the only finite property Lake Norman has is waterfront so supply and demand should drive prices up consistently in the future.
11-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 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. ***With our new MLS Matix program there are some variances in numbers but I am not going to go back to prior years and adjust.
I love this chart of our sales by month since 2005 as it really gives us a good sense of where we are today and where we have been over the past 11 years. With 11 months now under our belts in 2015 our sales have exceeded all post recession years and are 8.4% higher than 2014 AND 5.7% higher than the 2007 numbers. I am confident that we will end 2015 with higher closed sales than 2014 and all years prior back to and including 2007. It is amazing to see the recession numbers. This year we will actually close twice as many home sales as 2009!
Summary and My Insight
Good signs/news remains about the same as last month:
- Lake Norman’s historically low inventory of active listings puts pressure on demand and plays a role in firming up prices.
- The number of distressed homes for sale remain so low that they are truly irrelevant and did not play any perceptible role in our Lake Norman housing market.
- New construction is definitely back. Custom and smaller groups of spec homes are popping up all over Lake Norman. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor.
- Waterfront tear-downs and lots are selling. More buyers are willing to build or do major renovations if they can get “good” waterfront lots.
- New listings in the lower price ranges that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Interest rates, while rising, are still below earlier predictions for 2015.
- Economists are predicting stronger sales in the south next year and Realtor.com even ranks Charlotte as the #8th hottest market in 2016! They predict a 10% increase in sales and a 6.5% increase in the median prices.
- I have personally experienced a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman. Because sales and prices are up in many states that feed relocating buyers to our Lake Norman area, more homeowners are able to sell and move now than in the past 5 years.
- Economists are looking at the Feds to raise rates in December which has already led to higher mortgage interest rates.
- Lake Norman’s low inventory is comprised of a lot of stale inventory. Good fresh new listings are selling quickly so our low inventory is even worse when you consider the number of listings that have been sitting due to price, location, condition or age.
- Our trade-up, waterfront and luxury price ranges are still very much in a buyer’s market and have slipped recently.
- Lake Norman home prices are increasing in a rather inconsistent pattern and in different locations and price ranges. At the same time, according to economists, home prices in the entire US in 2016 will see only modest gains.
- Existing home sales are being challenged by new construction! In head to head competitions new construction usually wins which hurts resale homes in the same or similar communities.
- While easing a bit, strict loan standards are still making it more difficult of buyers to qualify despite some easing and modifications.
- Finding the perfect home has become more difficult because much of the older inventory has been picked over. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling very quickly. Watching the “hot sheet” is once again a part of the buying process. Don’t procrastinate when considering a new listing because they are selling quickly!
- On the flip side, most higher-end properties are simply taking much longer to sell.
- 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.
NEW: If you are looking in a “HOT” neighborhood and price range be prepared to make an offer quickly. No matter what, have your pre-approval letter in hand before even looking at homes. This is particularly important due to the new TRID closing process that took effect Oct. 2nd. The new mandatory waiting periods during the loan process mean your lender has to be ready to go the minute you sign a contract on a property. I can’t emphasize this enough! Ask your lender and Realtor if they have experienced and are prepared to close using all of the new forms and deadlines. Then get your lender everything they need as soon as possible!
Officially we are now in Lake Norman’s slowest season for home sales and with the lowest number of homes for sale. If you look at the green and yellow chart above you will see that historically January is our slowest month of the year. That said, serious buyers will be looking and serious sellers will be selling so the holidays can be a great time for house hunting. By February inventories will start to grow and by March things should be hopping again!
The real estate market in Lake Norman is extremely diverse. Make sure you know what is happening right now in your market niche! 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), lot and floor plan. 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 but rising it is still a great time to buy. With less than 3% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.If you read my post: Really Cool Real Life Examples of Home Values Trends in Lake Norman you will know that a lot of our new listings are selling VERY quickly and at higher prices. I feel that we have two different markets right now in Lake Norman. There are new listings that are priced right that are selling in just a matter of days and then there are the older listings and high-end luxury estates that are still struggling.
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 sell in the future really isn’t a bargain at all. Be smart!
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