I must admit that our Lake Norman October closed home sales were so high that I keep re-doing the search in the MLS thinking there must be an error. Seriously, a 52% increase over October 2013, a 13.7% increase over last month AND the second highest month in all of 2014? I predicted October would be a great month because of the high number of homes under contract last month but even I didn’t expect them to be this high! Let’s take a closer look:
Lake Norman Market Report October 2014
* All data is from the Charlotte Regional Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 7.7% of Lake Norman’s total home sales. We had just 12 distressed sales in October with an average price of $433,246. Distressed active listings comprise only 2.4% of our total inventory of Lake Norman homes for sale. Clearly distressed sales no longer play a significant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes were 25.16% of our October home sales while they currently comprise 39% of our active listings. The average sales price of a waterfront home in October was $876,262 and the average price per square foot was $203.21. (Down from last month’s 228.25 and our prior peak of $229 last summer). It took on average 113 days for a waterfront home to sell and they sold for 95% of the listing price in October. Overall, waterfront homes just aren’t selling at the rates they were in past years. We currently have a 9.4 months supply of active listings which puts waterfront homes in a buyer’s market unlike the greater Lake Norman market.
- 22 new construction homes closed in October 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 just under 99%. Clearly there isn’t a lot of wiggle room on prices of new homes. We currently have 52 new construction homes under contract in the MLS. The average sales price in October logged in at $348,332. The bulk of our new construction market is in our lower to middle price ranges.
- 53.8% of Lake Norman’s October single family home sales were under $400,000. This is about equal to last month’s.
- 65.1% of Lake Norman home sales in October were under $500,000 which is just slightly higher than last month’s.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 221 is down substantially from last month’s but they are still 7% higher than last year at this time. While October was exceptional, our Lake Norman housing market has slowed down fairly rapidly and is now more in line with typical seasonal trends.
A closer look at the chart:
- The number of Active Listings in Lake Norman is just about equal to last Octobers’.Our absorption rate/months of supply of active listings today is 6.0 which is the lowest in 2014. Last May 2013, Lake Norman hit our post recession low of 5.9 months of supply and we almost matched that this past month. Using the nationally defined goal of 6-8 months of supply for a balanced housing market we can safely say that our Lake Norman real estate market is balanced over all for the 5th month in a row. In certain price ranges we are leaning towards a buyer’s market and in some a seller’s market.
- Under Contract Show (conditional sales), are up 10% versus this time last year. ( They were up 43% last month). These are homes that just went under contract (have an accepted offer) and still have financial and inspection conditions. They represent future closed sales most likely in late November/December. This number would indicate that our closed sales will remain strong well into late fall/early winter and that Lake Norman, unlike the rest of the US, WILL exceed our 2013’s sales in 2014. Note that the average price is actually down 9% for both Under Contract Show and our Pending sales
- Pending/Under Contract No Show sales are up slightly for the second month in a row after 12 months in a row of declines. These are the contracts that are past their inspection/due diligent periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. Based upon this I predict that we will again exceed 2013 closed sales numbers this month.
- Lake Norman’s closed home sales in as of today and as stated above, were up a whopping 52% compared to last October’s and 13.7% higher than last month’s. The average sales price was 15% higher and the average days on market were down 16%. The average house in Lake Norman sold in about 89 days. All good news!
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- 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
- November 6, 2013: 207
- October 6, 2013: 207
- September 6, 2013: 218
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
- April 2, 2013: 290
- March 5, 2013: 255
- February 7, 2013: 219
- January 6, 2013: 184
- December 6, 2012: 197
- November 7, 2012: 214
Here is a breakdown by price-range of our September 2014 closed sales in Lake Norman
- $36,050 – $99,999: 4
- $100,000 – $199,999: 19+
- $200,000 – $299,999: 27
- $300,000 – $399,999 35++
(These price ranges represented 53.8% of our October home sales.)
- $400,000 – $499,999: 24++
- $500,000 – $599,999: 12+
(These price ranges represented 22.8% )
- $600,000 – $699,999: 5–
- $700,000 – $799,999: 7
- $800,000 – $899,999: 9+
- 900,000 – $999,999: 3+
(These price ranges represented 15.2%)
- $1,000,000 – $1,499,999: 7+
- $1,500,000 – $1,999,999: 5++
- $2 million+ : 1-
(#Solds $1 million+ = 8.2%)
The most improved price range in October were the $200,000’s, $400,000’s and the $1,000,000 – $1,499,999’s.
Higher-end home sales in Lake Norman
Mercurial and unpredictable continues to come to mind when trying to describe our luxury housing market. August was such an improvement over the past years’. We even had two sales at or above $3,000,000. In September our numbers were back down with only 2 sales above $2 million and in October we had a nice increase in the $1,000,000 – $1,999,999 but we only had one sale over $2 million. I want to see more consistency in this niche!
Lake Norman’s Waterfront Housing Market
This month 13 of our 39 waterfront sales were above $1 million. Our waterfront home sales in the trade-up price ranges were about the levels they have been this year. We currently have 367 waterfront homes actively listed for sale on Lake Norman. With 39 closed sales of waterfront homes in October this means Lake Norman currently has 9.4 months of inventory of waterfront homes for sale which puts this niche in a buyer’s market. I remain baffled by the erratic nature of our waterfront and higher priced home sales in Lake Norman. Folks are gobbling up waterfront tear-downs. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. New construction in every price range is beating existing homes in popularity. On my tiny street there are 3 waterfront homes under construction…the first since we moved here in 2005.
10-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 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.
Thanks to our sustained higher sales all summer, Lake Norman’s year-to-date 2014 home sales are now 6.3% HIGHER than 2013’s! The national sales were up in September but are trending below 2013’s so it will be interesting to see their October numbers and whether they were as strong as Lake Norman’s.
Summary and My Insight
- October closed sales literally creamed all prior Octobers all the way back to 2005! And, they were the second best month in 2014 which is very unusual for our seasonal Lake Norman housing trends.
- What I am loving to see is that our Lake Norman real estate market has been strong every month since April rather than one great month like May 2013 and then a major drop off in the fall.
- Our new contracts (Pending and Under Contract Show) while down from last month are still higher than last October’s and bode well for the rest of 2014.
- The average number of days Lake Norman properties took to sell was down 16%.
- Lake Norman’s inventory of active listings continues to drop at about the same rate as last year. As our seasonal slow down approaches it is important that our number of active listings drops accordingly. That said, buyers are complaining about the lack of new listings!
- Our Lake Norman home values are stable and slowly improving overall. There are pockets of strengths and relative weaknesses which result in fluctuating average sales prices when combined for the entire Lake Norman real estate market. The lack of distressed sales has also contributed to higher overall average prices. The “bargains” are all but gone. What I really want to see is consistent measurable increases in Lake Norman home sales in ALL price ranges.
- There are pockets of “hot” home sales in the greater Lake Norman area, notably the popular off-water and moderately priced communities in Huntersville, Cornelius and to a lesser extent Mooresville where inventory is very low and multiple offers are not uncommon.
- The number of distressed homes for sale are so low they are truly irrelevant and will not play much of a role in our Lake Norman 2014 sales.
- New construction is definitely back. While we only sold 22 new homes last month through the MLS, we have 52 under contract and this doesn’t include custom homes and homes sold directly by the builder/developer in subdivisions. I have been showing in several new housing communities and they are booming! Custom and smaller groups of spec homes are popping up all over Lake Norman.
- The national economy is seeing solid job growth which should translate to housing growth.
- North Carolina growth is catching up and unemployment is dropping.
- Consumer Confidence is up.
- Because of higher rental prices and low interest rates, it is now better financially for most to buy rather than rent.
- Conforming loan rates are lower than economists had predicted for 2014. Jumbo loan interest rates are currently LOWER than conforming loan’s.
- Homeowners who went through short sales/foreclosures several years ago are now re-entering the market.
- 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.
- According to a July 1 article on Trulia Pro Blog, of their “7 signs of a Soon-to-Be Super Hot Market”, Lake Norman definitely has 4 of them including the new Whole Foods Market that opened this week in Huntersville! This was one of their key signs of positive economic futures!
- Our trade-up price ranges continue to struggle.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman.
- Lake Norman’s luxury home sales, while better, are still lower than they were before the recession and remain very erratic.
- Lake Norman home prices have stabilized but are only increasing in a rather inconsistent pattern and in different locations and price ranges unlike many areas in the country where they are seeing consistent price increases.
- Overpriced listings are still sitting. Existing home sales are being challenged by new construction!
- Nationally the annual growth in home sales prices continues to slow according to a S&P/Case-Shiller report released on September 30th.
- Interest rates are expected to reach 6% by 2016.
- Tightened credit, tougher loan standards and increasing interest rates have made it harder for buyers this year.
- Lake Norman’s average days a listing takes to sell, while dropping, is still higher than the national average of 56 days.
- I hear buyers and agents complaining that our inventory of re-sale listings is “stale”, especially higher prices on the water. Even new listings are many times homes that were on the market off and on for several years. As has always been the case here in Lake Norman, most buyers want new or move-in condition homes. Since new construction pretty much disappeared after the recession, we are now looking at an aging inventory of homes which is why buyers are turning more towards building or remodeling than in past years. Or, they are buying new construction or lots and building, especially on the water.
- 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 quickly. Watching the “hot sheet” is once again a part of the buying process.
- On the flip side, 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.
My advice to Lake Norman home buyers has changed slightly. I still emphasize the importance of good locations and prioritizing your list of features you want in your home and lot. But, if you are looking in a “HOT” neighborhood and price range or if you can’t find your perfect, move-in condition home, be open minded about homes that need some work. If the floor-plan is good, perhaps having to do some painting, new flooring etc. is your best option. 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 5% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price. Low-balling, except on over-priced properties, really isn’t a great strategy nor will it result in a lower price. To the contrary, it usually serves to offend the sellers and gets the negotiations off on the wrong foot.
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 resale, really isn’t a bargain at all. Be smart!
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