Our Lake Norman real estate market has been on a positive roll since June culminating in a rather impressive October with 81 closed sales, a number that matches the best October in Lake Norman home sales since 2007! (I have been expecting this to be the case for several months due to our high pending home sales numbers).
So, why I am not jumping up and down with enthusiasm? Because I am more focused on our future numbers and our active price ranges. As you will see below, our conditonal and pending home sales are lower than at the same time last year indicating a slow-down in November and even December sales. And, a larger portion of our sales are at the bottom of our price ranges.
Here are the October numbers from our Charlotte Multiple Listing Service for our Lake Norman area real estate market:
Some significant additional interesting statistics for you:
- 19.8 of our closed sales were “distressed sales” ( Foreclosures (REOS), defaults, Short Sales) compared to 10% last month, 16.8 in August, 18.5% in July, 25% in June and 27% in May. And, even better news, only 9.6% of our active listings are distressed.
- 28% of our closed sales were waterfront homes down from 38% last month.
- 60% of our October sales were under $400,000 and 80% were under $600,000.
- Today our active listings stand at 927, 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 October 2010. Our absorption rate/months of supply of active listings stands at 11.4. Our shrinking inventory and relatively good sales are moving us closer to our goal of a truly balanced housing market of 6-8 months of supply in Lake Norman area (MLS area 13). With only 9.6% 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 over the biggest hurdle.
- 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 4% this month when compared to September 2010 but were about equal to 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 November/December. It looks like we will have a dip in sales in November and end the year about equal to 2010.
- Pending sales dropped to 79 from a whopping 102 last month. They are also 12% lower than October 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. It looks like our November closed sales will be down from this month and November of 2010.
- The number of closed home sales in Lake Norman jumped up 29% compared to October 2010’s and were 4% higher than last month.
- 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 $900,000. The lower 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 lower price ranges.
Lake Norman homes under contract (but not yet closed) on the first of each month are as follows:
- November: 169 (The lowest since March!)
- October: 193
- September: 183
- August: 193
- July: 178
- June: 199,
- May: 173
- April 195,
- March: 163
- February: 142
Last October we had only 165 so while we are trending down compared to most of 2011 we are about equal to last November’s.
Here is a breakdown by price-range of our June 2011 closed sales in Lake Norman’s area 13-1 to 13-5:
- $78,000 – $199,999: 13
- $200,000 – $299,999: 14
- $300,000 – $399,999: 22
(These price ranges represented 60% of October’s sales compared to 53 of September ‘s total sales)
- 400,000 – $499,999: 11
- $500,000 – $599,999: 5
(These price ranges represented 19.7% compared to 21.7% last month)
- $600,000 – $699,999: 5
- $700,000 – $799,999: 4
- $800,000 – $899,999: 3
- 900,000 – $999,999: 1
(Solds for $600,000 – $1mill = 16% compared to 19% last month)
- $1,000,000 – $1,999,999: 2
- $2 million+ : 1 ($3,030,000)
(Solds $1million+ = 3.7% compared to 6.4% last month)
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
- Absorption rate/months of suppy is down
- Number of distressed homes for sale is below 10%
- We are finally seeing some new construction popping up (Not spec homes)
- Prices are inching up in certain price niches particularly in communities like The Farms and The Point now that their distressed sales are nearly gone. There are even new-construction homes available in The Farms.
- Sales are trending down again this month. The irractic nature of our Lake Norman real estate market continues
- 60% of our sales were under $400,000.
- With few new listings, buyers have fewer options. While at one time they could afford to be picky, now that many of the good properties have sold their options are to wait and hope that higher priced homes are reduced substantially or compromise more and be willing to pay a bit more than some of the extreme bargain prices of the past few years.
- With fewer distressed properties, the “screaming bargains” are few and far between. Successful buyers are now concentrating on getting a good price but for the most part are not expecting huge price concessions.
- With construction loans nearly impossible to get, lots, especially waterfront, are still sitting.
In my opinion, overall our home prices may have hit bottom. The future of our Lake Norman real estate market now depends on two main 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? My guess is that while they will continue to exist they will no longer dominate nor drive our Lake Norman housing market.
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 and don’t get caught up thinking about the incredible bargains in the past. Carpe Diem!
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