Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s November 2018 Market Report

Lake Norman’s real estate market continued its dramatic downturn in November with a 26% drop in home sales compared to last year and a 31% drop from last month’s.  While this was the 4th best November since 2005 this certainly isn’t enough to restore our confidence. No matter what factors have contributed to our weakening housing market, we have been battered with three months and there is nothing to suggest this will change in the next few months given our low pending sales and new contracts’ numbers compared to last year. My numbers below should provide some deeper insight.

Here are what I feel to be the biggest takeaways from last month’s Lake Norman real estate sales data:

  • Our Lake Norman home sales were down for the third consecutive month and our year-to-date sales are down -3.6% compared to 2017.
  • Our inventory of active listings remains historically low, (13 fewer than last year), as they have been all year, never reaching our normal summer highs.  It is hard to quantify but there is no doubt that the low inventory does have a negative impact on our Lake Norman’s home sales.
  • Our pending sales and our newest contracts (UCS) are down which indicates a continuation of the slowdown for the rest of 2018.
  • Waterfront homes moved back into a buyers’ market.
  • I want to share with you again this great interactive calculator for determining rent vs. own costs from the New York Times!

Let’s take a closer look:

Lake Norman real estate market report for November 2018

All data is from the Carolina Multiple Listing Service.

Some significant additional statistics for you:

  • Waterfront homes moved further into a buyer’s market in November as the months of supply increased to 7.6 from 7.13 last month, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in November represented 30.3% of Lake Norman’s total sales while comprising 33.4% of our active listings and 27% of our under contract listings.
    • The average price per square foot of our waterfront homes jumped to $278.33 from last month’s $248.70, September’s $256.64, August’s$248.18 and July’s $262.05. This number was greatly impacted by several luxury homes including one that sold for $795.02 per square foot so it was an anomaly and not an indication that our overall prices are increasing.
    • It took on average only 117 days for a waterfront home to sell and they sold for 96% of their listing price.
    • The average price per-square-foot for our waterfront homes has still not returned to 2007’s peak of $283.16 even with this past month’s anomaly.
    • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.
  • Only 13 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. The average listing price vs sales price of new construction single family homes was 97%. This is the lowest in several years which means there is currently some wiggle room with builders so give negotiating a try! (And, don’t forget to ask builders for all those great upgrades!) We currently have 97 new construction homes under contract in the MLS which is equal to last month’s. The average sales price in November was $606,380.  The months of supply of active listings based on November’s sales jumped to 13.7 which puts them very much in a buyer’s market.  Do we have too many new houses being built? Interesting.
  •  There was only 1 closed distressed sale (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in November.  We have only 2 under contract and 9 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 37.6% of Lake Norman’s November’s single family home sales were under $400,000.
  • 56.9% of Lake Norman home sales in November were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is 251.  This is below last year’s 264 but slightly above 2016’s 237. Clearly we are not going to match last December’s sales but it is important to note that last December’s sales were extraordinarily high.

A closer look at the chart:

  • The number of Active Listings as of today in Lake Norman is down just 2% compared to last year’s at this time.  Today we have only 743 single family homes for sale in all of Lake Norman. Our absorption rate/months of supply of active listings increased to 6.8 from last month’s 5.2, and is well above our record low this year of 3.34. This means that Lake Norman as a whole is leaning more in favor of buyers. 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 1% and the days on market is down 21%.  (So homes for sale have been on the market 30 fewer days than last year or a full month fewer days!).
  • Under Contract Show (conditional) sales are down 5% from this time last year’s.  The average price of our new contracts is down 7% and the days on market is down 9%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should represent weaker future closed sales in January/February.
  • Pending/Under Contract No Show sales are down 5% compared to last year’s.  The average price of our pending sales is down 11% but these listings/sellers successfully negotiated a purchase contract 15% 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 early January.
  • Lake Norman’s closed November home sales in our MLS as of today and as stated above, were 26% below last November’s and 31% fewer than last month’s.  ( Note that we still logged in the 4th highest November sales since 2005. See chart below). The average price of our homes sold was up 16% (See below for discussion of our luxury home sales as they greatly impacted this number.) It took on average 2 fewer days to sell a home in November 2018 vs 2017.  Despite very low numbers of sales, what did sell sold more quickly than last year.

The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:

  • 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
  • May 6, 2017: 391
  • April 6, 2017: 351
  • March 6, 2017: 295
  • February 6, 2017: 227
  • January 6, 2017: 183
  • December 6, 2016: 237

Here is a breakdown by price-range of our November 2018 closed sales in all of Lake Norman

  • $1,000 – $99,999: 0
  • $100,000 – $199,999: 7
  • $200,000 – $299,999: 10-
  • $300,000 – $399,999: 24

        (These price ranges represented 37.6% of our November home sales)

  • $400,000 – $499,999:  21
  • $500,000 – $599,999: 8–

       (These price ranges represented 26.6% of our November sales vs 34% last month!)

  • $600,000 – $699,999: 5-
  • $700,000 – $799,999: 8=
  • $800,000 – $899,999: 6
  • 900,000 – $999,999: 4+

       (These price ranges represented of 21.1% 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% in April,12.7% in March, 14.3% in February, 20.4% in January, 14,5% in December’s, November’s 22.1%)

  • $1,000,000 – $1,499,999: 10++
  • $1,500,000 – $1,999,999: 3+
  • $2 million+ : 3+

       (#Solds $1 million+ = 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 November our standout price ranges were all of our luxury homes from $900,000 up to $2,950,000! Such a fascinating month because our significant drop in sales can be attributed to our lower and lowest price ranges up to $700,000 when above that our sales were actually very strong. This is quite a change from prior months. As I have said so many times, 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

Never a dull moment in our Lake Norman housing market. After a bum October and an up and down year, November was quite remarkable for our luxury housing market. At 14.7%, they represented the highest percentage of our overall sales for the past year! Almost a quarter of our total sales for the month were above $800,000. Of the 20 sales above $900,000, 10 were in Mooresville, 7 in Cornelius and one each in Troutman, Sherrills Ford and Stanley.

Lake Norman’s Waterfront Homes

As I wrote above, Waterfront homes moved further into a buyer’s market in November as the months of supply increased to 7.6 from 7.13 last month, 6.1 in September, 4.9 in August, 6.4 in July and June’s 4.97 months. (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in November represented 30.3% of Lake Norman’s total sales while comprising 33.4% of our active listings and 27% of our under contract listings.
  • The average price per square foot of our waterfront homes jumped to $278.33 from last month’s $248.70, September’s $256.64, August’s$248.18 and July’s $262.05. This number was greatly impacted by one luxury home that sold for $795.02 per square foot so was an anomaly and not a true sign of increasing prices.
  • It took on average only 117 days for a waterfront home to sell and they sold for 96% of their listing price.
  • The average price per square foot for our waterfront homes has still not returned to 2007’s peak of $283.16 even with this past month’s anomaly.
  • 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 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 two other’s so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that this year’s numbers will be comparing apples to apples. However, I am not going to go back to prior years and adjust.

What a fascinating look above at our highs and lows, especially now that we are 11 months in to 2018.  Thanks to our drop in sales in September, October, and November, our year-to-date total sales of 1815 are now 3.6% LOWER than the first 11 months of 2017. Thanks to our strong prior months it is still the second highest 11-month period since 2005. It is important to remember that 2017 was a record breaking year for Lake Norman’s housing market so being close to it’s numbers this late in the year is certainly respectable. That said, our new and dramatic downward trend does not bode well for our late fall and winter housing market. As you can see, we are up against a strong December of 2017 but then we will be looking at the spring of 2018 for comparisons and those numbers were not consistently strong until April.

Summary and My Insight

Good signs/news for 2018:

  • 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 (? looking out at snow on December 9th!) 4 seasons, vibrant communities and better quality of life.
  • The number of distressed homes for sale are still extremely low and they still don’t play any perceptible role in our Lake Norman housing market.
  • Buyers are moving into the driver’s seat in some price ranges yet homes are still selling faster than last year.
  • Multiple offers are still possible in nearly all price ranges and even in our waterfront properties if a property is particularly special.
  • New listings in the lower price ranges that are in great condition and in desirable locations are selling with multiple offers within days of hitting the MLS.
  • Move-in condition, updated listings in the trade-up price ranges and homes on exceptional waterfront lots are also selling quickly.  (Note our days on market numbers in the top chart.)
  • New construction feels like it is everywhere. 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. Note that lumber prices are sky high which is causing construction costs to go up as well.

Challenges/Weaknesses for 2018/2019:

  • With 11 months in the books we are now 3.6% below 2017’s exceptional numbers and the next few months look to be a struggle.
  • Record-breaking low inventory of active listings continues to provide a headwind for our Lake Norman housing market.
  • Consumer confidence may be weakening due to recent hefty drops in the stock market, rising interest rates and a national downward trend of the housing market.
  • 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 homes.  Of course, the alternative is to drop their sales price but most buyers are not willing to buy a home here that needs a lot of work.
  • 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 3rd quarter of 2018.   
  • Many economists feel that the US housing market will continue to experience a slowdown primarily due to low inventory, rising prices, increased mortgage rates, and challenges with new construction due to increased costs of lumber and shortage of qualified labor. Lake Norman was a few years behind but is now experiencing extremely low inventories of homes for sale so it is hard to know if we might take longer to slow down.

Final thoughts: 

As I wrote the past six 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 13+ 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, we have been moving towards a buyer’s market so, 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 another home with multiple offers which can be completely attributed to the renovations and staging.  How do I know this?  The seller had it listed last 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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