Lake Norman Real Estate Market Reports

Lake Norman Real Estate’s September 2019 Market Report

Lake Norman real estate market report

All data is from the Carolina Multiple Listing Service.

At first glance our Lake Norman home sales for September look remarkable: a 20% increase over last year’s. But I encourage you to never take any real estate numbers out of context as they are pretty meaningless by themselves. What you need to know about this past September’s 20% increase is that we were up against an unusually low number of sales in September 2018. So, the whole picture includes the fact that our 170 sales still puts us below September of 2017, 2016 and 2005. We also dropped 19% from last month’s sales. Okay, our sales weren’t exactly stellar after all.  But, there is actually a lot of good in my comprehensive report below which bodes well for our last quarter and will provide deeper insight into where we are headed as well as details regarding this month’s sales.

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

  • Our current month’s of supply (absorption rate) is only 3.89.  We are still very much in a seller’s market.  (A balanced market is 6 months of inventory).
  • Lake Norman’s home sales for the first 9 months of 2019 are now 2.4% higher than 2018’s.
  • The average sales price was down 15% compared to last year’s.  Yep, our luxury market once again took a rest. To learn more, scroll down to the sales by price range below.
  • Our inventory of active listings is significantly lower than last year’s. (-15% or a whopping 115 fewer than last year’s!). Normally our inventories  start to decline after their summer peaks but there is no doubt that this year’s numbers are exceptionally low, period!
  • Our newest contracts (UCS) are up an impressive 25% while our pending sales (UCNS) are up 7%. It looks like our Lake Norman home sales will be strong through the end of the year after the 3-month slowdown.  This is remarkable given our record low inventory!
  • Waterfront home sales is now just on the cusp of a balanced market with 5.74 months of supply. This important niche remains weaker than our overall Lake Norman real estate market.
  • New construction sales represented 18.8% of our overall market in September however today they represent 33.1% of our new contracts.

Let’s take a closer look:

Some significant additional statistics for you:

  • Waterfront homes are leaning slightly towards a seller’s market based upon September’s months of supply of listings which increased to just under 6 months at 5.74 compared to 5.18 last month, 6.6 months in July  and 4.98 months in June. (A balanced market of 6 months favors neither buyers nor sellers.)
    • Waterfront sales in September represented only 22.9% of Lake Norman’s total sales while comprising 33.8% of our active listings and only 23.8% of our under contract listings.
    • The average price per square foot of our waterfront homes dropped to $264.78. This is well below Lake Norman’s 2007 peak average of $283.16.
    • It took on average 74 days for a waterfront home to sell and they sold on average for 96% of their listing price. Room to negotiate but good properties are selling quickly!
    • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.
  • 32 new construction homes closed in September through our MLS.  We have 111 under contract which represents 33.1% of all of Lake Norman’s homes under contact/pending today.  Of course, 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 increased to 99%.  It is still hard to negotiate prices with builders, especially in entry level home prices. That said, always give negotiating a try and don’t forget to ask builders for upgrades as they usually prefer upgrades over price reductions.  The average sales price in September was $370,187.  The months of supply of active listings using September’s sales is 4.96 months so new construction remains in a sellers’ (builders’) market.
  •  There were only  2 distressed sales (Foreclosures (REO’S), defaults, Short Sales) in all of Lake Norman in September.  We have 4 under contract and only 4 distressed active listings as of today. Distressed homes remain insignificant in our overall picture. 
  • 45.9% of Lake Norman’s September’s single family home sales were under $400,000.
  • 62.9 % of Lake Norman home sales in September were under $500,000.
  • Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total today is an impressive 335!  This is 19.2 higher than last year at this time and 11.3% above 2017’s 301. Because these are fairly new contracts, I predict we will see a continuation of our current momentum through the end of the year. In case you don’t remember, the last months of 2018 plummeted after a robust 8 months. It will actually be the fall 2017 numbers that will be more of a challenge to exceed.

A closer look at the chart:

  • Wow, the number of Active Listings as of today in Lake Norman is down 15% when compared to last year’s at this time.  Today we have only 662 single family homes for sale in all of Lake Norman which is significantly  below last year’s 777. Not only are our numbers of homes for sale at historic lows, but they keep dropping! Our absorption rate/months of supply of active listings is 3.89 which indicates we remain very much in a sellers’ housing market. 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 3% and the days on market is up 3% when compared to the same time in September 2018.
  • Under Contract Show (conditional) sales are up a very impressive 25% from this time last year.  The average price of our new contracts is up 1% and the days on market is down 8%. UCS are homes that just went under contract (have an accepted offer) and still have financial and inspection contingencies. These newer sales should translate to strong sales towards the end of the year.
  • Pending/Under Contract No Show sales are up  as well with a healthy 7% increase over last year’s.  The average price of our pending sales is down 2% and these listings/sellers successfully negotiated a purchase contract in 68 days which is equal to 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 November/December. These numbers provide further substantiation of my prediction that we will maintain the current upswing of home sales in Lake Norman through the end of 2019.
  • Lake Norman’s closed September home sales in our MLS as stated above, were 20% higher than last September’s.  The average price of these homes sold was down 15%. It took on average only 66 days to sell a home in September which is 7% faster than September 2018.   One interesting side note about days on market: our MEDIAN days on market was 37 which means that half of our total sales took less than 37 days and half took longer.  Interesting! Keep in mind that we always get a few more sales reported to our MLS after I do this report each month.

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

  • October 8, 2019: 335
  • September 8, 2019: 378
  • August 8, 2019: 362
  • July 8, 2019: 355
  • June 9, 2019 383
  • May 9, 2019: 386
  • April 9, 2019: 363
  • March 10, 2019: 318
  • February 8th, 2019: 268
  • January 6, 2019: 225
  • 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

Here is a breakdown by price-range of our September 2019 closed sales in all of Lake Norman:

  • $1,000 – $99,999: 3+
  • $100,000 – $199,999: 5-
  • $200,000 – $299,999: 34++
  • $300,000 – $399,999: 36–

        (These price ranges represented 45.9% of our September home sales which is slightly higher than last month’s)

  • $400,000 – $499,999:  29
  • $500,000 – $599,999:  21

       (These price ranges represented 29.4% of our September sales which is slightly higher than last month’s)

  • $600,000 – $699,999: 8-
  • $700,000 – $799,999: 14
  • $800,000 – $899,999: 8-
  • 900,000 – $999,999: 3–

       (These price ranges represented 19.4% of our September sales compared to 22.9% of our August sales, 18.2% of our July sales, 20.7% in June, 19.0% in May, 16.2% in April, 17.2% in March, 14.4% in February, 16.5%  of our January sales,  20.7% of our December sales, 21.1% of 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% 2018)

  • $1,000,000 – $1,499,999:  6– (15 last month)
  • $1,500,000 – $1,999,999: 3-
  • $2 million+ : 0-

       (These $1 million+ sales represented only 5.3% of our September sales, 9.8% of our August sales,  9.1% of our July sales9.9% of June sales, 8.6% of May sales, 10.1% in April, 4.6% in March, 6.7%  in February,  7.3% of our January sales13.2% of our December sales 2018, 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 September our strongest sales were in the $1-100,000’s, $200,000’s, $400,000’s, $500,000’s and $700,000’s.  Clearly our trade-up and luxury markets performed very poorly after a good showing in August.  They represented 24.7% of our September sales down from 32.7% in August and 29.8% in July. If you look in the summary parenthesis in these two categories you can measure September’s sales against all months for the prior year. The trade-up price ranges from $600,000 – $999,999 were within typical ranges for the past year.  However, our sales above $1 million were the second weakest in the past year.  Please note that the symbols next to each number ( +, -, = ) are my way of letting you know how each price range compared to last month’s.  As always 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

We have had some ups and downs in  our luxury market for the past few years while still struggling to recover from the recession.  This year has been equally mercurial. After a particularly strong April, our luxury home sales above $1.5 million disappeared in May only to come back in June with a whopping 15 sales. Then they dropped down to 6 sales in July and then jumped up in August to 9.8% of our total sales and down to only 3 sales in September. To put these numbers in perspective I included the percentage the luxury home niche represented each month for the past 18 months. While an improvement over the early 2019 months, we are not seeing consistent strength in our luxury housing market and it has yet to fully recover from the recession.

Lake Norman’s Waterfront Homes

As I wrote above waterfront homes are leaning slightly towards a seller’s market based upon September’s months of supply of listings which increased to just under 6 months at 5.74 compared to 5.18 last month, 6.6 months in July  and 4.98 months in June. (A balanced market of 6 months favors neither buyers nor sellers.)

  • Waterfront sales in September represented only 22.9% of Lake Norman’s total sales while comprising 33.8% of our active listings and only 23.8% of our under contract listings.
  • The average price per square foot of our waterfront homes dropped to $264.78. This is well below Lake Norman’s 2007’s peak average of $283.16.
  • It took on average 74 days for a waterfront home to sell and they sold on average for 96% of their listing price. Room to negotiate but good properties are selling quickly!
  • Vacation rental properties are in great demand which has led to more buyers purchasing waterfront homes for this purpose.

Spreadsheet of Annual Sales in Lake Norman by month and year since 2005

Lake Norman real estate home sales by month and year since 2005 - 2019

* 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 many others over the past several years so all of the total sales numbers have changed slightly.  I did update the entire 2017 year so that the past two years’ numbers will be comparing apples to apples. However, I am not going to go back to prior years and adjust.

I love being able to see this overview which puts our current sales in context with prior years and provides monthly trends to help better understand Lake Norman’s seasonal trends, peaks and valleys.

Some of my readers have questioned why these numbers are of value due to the significant increase in the number of homes in our area now versus 15 years ago. But, when you try to assess the Lake Norman housing market, the only numbers that count are the quantity of active listings available, not the number of homes that exist in our area. And, our number of active listings at our peak in 2007 was 1300, almost twice as many as we have today!

After our pick up in September, our first 9 months of 2019 are now 2.4% above the first 9 months of 2018. If you look at the subtotals on the gray line under June you will see what a stellar first half of 2019 we had! (The highest number of sales in the first six months since 2005). Then look at our June, July and August sales to see where we have lost momentum. As you can see, while our September sales of 170 well exceeded last year’s, we were well below 2017’s and slightly below 2016’s and 2005’s. What will be interesting to watch is our last quarter of 2019 as sales plummeted the last 4 months of 2018 so given our strong new contracts we should definitely end 2019 with sales exceeding 2018. But, can we match the record set in 2017?

Summary and My Insight

Good signs/news for 2019:

  • The latest from Bankrate: “The average 30-year fixed mortgage rate fell 6 basis points to 3.77% from 3.83% a week ago. 15-year fixed mortgage rates fell 5 basis points to 3.15% from 3.20% a week ago…Rates for mortgages are in a constant state of flux, but they have remained in a historically low range for quite some time. If you’re in the market for a mortgage, it may be a great time to lock in a rate. Just be sure to shop around.”
  • Our newest under contract sales are up 25% and our pending sales were up 7% indicating positive momentum going into this last quarter of 2019.
  • The number of distressed homes for sale is still extremely low so they still don’t play any perceptible role in our Lake Norman housing market.
  • New construction remains strong, representing about 33.1% of our pending contracts. It is clear that there is enough desirable new construction inventory to fill in the gap of our shortage of resale homes. If you drive around Lake Norman it feels like large, lower priced communities as well as custom and smaller groups of spec homes are everywhere. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor and good buildable lots. Note that lumber prices are sky high which is causing construction costs to go up as well.
  • Our overall long-term future is very positive. 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 (?) 4 seasons, vibrant communities and better quality of life.

Challenges/Weaknesses for 2019:

  • We have only 662 active listings in our MLS today. There is no doubt that record-breaking low inventory of active listings continues to provide a headwind for our Lake Norman housing market.
  • I have continued concerns about our waterfront niche as well as luxury homes which are generally still under performing overall despite some improvement.
  • Much of our housing inventory is becoming more and more dated so it will be incumbent upon sellers, now more than ever to do significant updating and staging to compete with new construction and attract the most buyers.  Of course, the alternative is to drop their sales price but most buyers here are not willing to buy a home that needs a lot of work. Sellers are having a tendency to initially overprice their homes which leads to price decreases and longer days on the market before they sell.
  • New construction is presenting a real challenge to our resale homes, especially the dated homes discussed above.
  • 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 2nd quarter of 2019. 

Final thoughts: 

As I wrote the past 11 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 14 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, you may have work to do and DO NOT OVERPRICE your listing!  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. 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!

OTHER ARTICLES of INTEREST

10 Things Lake Norman Waterfront Home Buyers Should Know

Standard

Your comments...