Real estate is in the news just about every day. Between the national decline in sales, the sub-prime mortgage meltdown, increases in foreclosures and tougher mortgage standards, it’s been a busy time for real estate.
I doubt that the fact that we are in a buyers market in Lake Norman is surprising to you. However, once again, I must quote the saying “all real estate is local” and take it one step further. Lake Norman real estate has pockets of strengths and weaknesses as well as overall trends and it is very important to be armed with this specific information when pricing your Lake Norman home for sale or buying your dream home at the lake.
There is no doubt that our Lake Norman properties have been greatly impacted because of the number of transplants who are coming from markets that are very slow. In fact, I think, because the greater Charlotte, Mooresville and Lake Norman economy is growing we probably wouldn’t have experienced a real estate slowdown if we weren’t so tied in to what happens to potential buyers coming from states that have been hard hit by the current national housing decline.
Here is the 4th quarter summary of Lake Norman real estate sales. All data I used was obtained through the Charlotte Multiple Listing Service and include the entire Lake Norman area #13 with the exception of the Catawba River. (Areas 13: 1,2,3,4,5).
Lake Norman Fourth Quarter Statistics Summary
- Number of Active Listings = 1259 @ an average listing price of $715,736 ( vs 1351 active listings last quarter)
- Number of Contingent Sales = 17 @ an average listing price of $437,607 (vs 20 contingent sales last quarter)
- Number of Conditional Sales = 30 @ an average listing price of $492,041 (vs. 34 conditional sales last quarter)
- Number of Pending Sales = 106 @ an average listing price of $520,159 (vs. 154 pending sales last quarter)
- Number of Solds = 268 @ an average listing price of $495,899 and sales price of $478,708 (vs 360 listings sold with an average listing price of $512,147 and average sales price of $497,699 in the 4th quarter 2006)
- The average sales price was 96.5% of the final listing price (About the same as last year) (Keep in mind the number of price reductions before selling!)
- The average days a listing was on the market was 116 where as the average days a listing was on market in the 4th quarter 2006 was 105
- We currently have a 18.8 months of supply of inventory. (A balanced real estate market has between 6-8 months of inventory. This high number would substantiate that we are definitely in a buyers market in Lake Norman.)
- Our average sales price has dropped 3.8% versus the same period of 2006
- Our sales volume in the number of units sold has declined 25.5% versus the same period of 2006
What does this all mean? In a nut shell, the sales volume in the Lake Norman area has dropped by a whopping 25.5% but the average sales price has dropped only 3.8% compared to the fourth quarter of 2006 and our inventory of active listings has dropped 6.8% since October 1. Because our number of sales dropped so significantly, even though we have slightly less inventory of homes for sale in Lake Norman we currently have significantly more homes for sale than meets the current demand.
Lake Norman 4th Quarter Sales Analysis By Price Range:
This chart provides you with a number of ways to analyze our sales:
- Compare the percentage of the properties sold by price range to the percentage of the actives. Example: Properties listed between $300,000 – $399,000 were 20.15% of the sales in the 4th quarter but represent only 12.55% of our active listing inventory. This is a strong price range compared to many others.
- Look at the DOM which means the Days a listing was On the Market before it sold. The average DOM for the 4th quarter for all of Lake Norman was 116 days. Obviously, the shorter the time on the market the better for sellers and the stronger the sales were in that price range.
The most important number, however, is the months of supply on hand or the “absorption rate”. The months of supply on hand is simply a way to determine, if no new listings were to come on the market and we continued to sell at this current rate per month then how many months would it take to sell out of homes.
Economists say that a healthy, balanced market should have between 6 to 8 months of supply on hand. Therefore, any price range that falls short of these numbers would be very active, lacking in enough listings and basically a sellers market. On the other hand, any price range that has more than 8 months of supply is probably overstocked with listings for the number of sales and therefore it becomes a buyers market. It truly is as simple as supply and demand.
I have highlighted in Yellow the price ranges that are under-stocked and therefore a Sellers Market and the Green price ranges are overstocked and therefore a Buyers Market
The bottom line is that the overall Lake Norman real estate market has slowed down versus 2006 and inventory is up which would indicate that as a whole, we are in a Buyers Market. However, the lower price ranges are actually very active and there is a lack of inventory.
If you are a buyer, then take note of the price range you are considering to learn what kind of bargaining power you might have.
And, if you are a seller, note that the listings that did sell sold relatively quickly. The key for all sellers right now is to price your home realistically AND stage it so that it is perfect for the few buyers that are looking in your price range.