During most of 2015 I noted, well complained, in my monthly Lake Norman market reports about our mercurial sales in luxury homes, the lack of inventory of good waterfront homes in the under $1 million price ranges and the historically low number of sales of waterfront homes as a percentage of our overall Lake Norman real estate market. So, I decided it was time to take a look at Lake Norman’s numbers since 2005 of just our waterfront home sales. The results are really fascinating if you like numbers! Let’s take a closer look:
Lake Norman Waterfront Homes Sales 2005 – 2015
*All date is compiled using the Charlotte Multiple Listing Service
A closer look by vertical columns of this chart:
- Number of sales: Looking solely at the volume of waterfront home sales you can see that 2014 was actually our highest year since the recession and we did, in fact, drop in the number of waterfront home sales this past year.
- Average price of waterfront homes per year: The average price of a waterfront home also dropped in 2015 and has never fully recovered to our highs in 2006-2009
- Median price of waterfront homes per year: The median price in 2015, however, was the highest since 2009 but also had not rebounded to our 2006-2009 numbers
- Price-per-square-foot per year: The price per square foot of waterfront homes in 2015 was also the highest since 2008 but not fully recovered from their peak years
- Median Days on the market: And, the time it takes to sell a waterfront home has been steadily decreasing since the recession but still is nearly twice as long as our peak year 2006
- Percent the sales price was to the listing price: This is the one number that has not varied that dramatically over the past 11 year. Waterfront homes have been selling about 5% below their listing price for the past two years.
Just to be clear:
Average = the sum total of the numbers being analyzed divided by the number of homes. And the median is the number smack dab in the middle of the properties being tallied.
Here is an example:
- Waterfront homes sold in the past week:
If we add these up the total $ sales are: $3,600,000 divided by 5 = an average sales price of $720,000. The median price would be the number right in the middle or $750,000. These are actually pretty close but let’s change the #5 price to $2,500,000. Suddenly the total $ volume jumps to $5,000,000 and the average price of these 5 sales jumps to $1,000,000 while the median price remains $750,000. Average prices clearly can be an inaccurate insight into our market. With only one home selling for over $1 million but the average is $1 million the numbers are skewed.
Why did I just bore you with this elementary example? To make a point about the numbers above. The one number in the above categories that does not match the other’s perspective of our waterfront home sales is the “average price of waterfront homes”. The median numbers tell us that 2015 was the best year since the recession in terms of price and days on the market but still below our peak years. I think this is true.
- Overall, our sales volume of waterfront homes dropped in 2015 however the value of a waterfront property is still increasing.
- Lake Norman waterfront homes are still about 12.4% less expensive than at their peak year.
- Lake Norman waterfront homes are selling faster and for more money but have not yet recovered to pre-recession numbers
Because there is a finite supply of shoreline there is also a finite number of Lake Norman’s waterfront homes and lots. Until the recession hit Lake Norman waterfront home prices were appreciating at a much faster pace than off-water homes. (And, they dropped at a much larger percentage). I believe that this finite supply and consistent demand will continue to drive Lake Norman’s waterfront prices up in the years to come. Lake Norman home buyers who are looking at long-term appreciation and can afford a waterfront home should seriously consider waterfront over off water. The most important considerations as always are location, quality of the water and shoreline and the topography of the lot.
I leave you with this final thought: