Lake Norman Real Estate ~ Diane Aurit

Lake Norman Hot Sheet: August 14, 2009

I always look forward to doing the research for my Friday Hot Sheets because it gives me a chance to see the most recent snapshot of what is REALLY going on with our Lake Norman Real Estate Market. It can be confusing and frustrating to follow the national real estate news because their reports are a month or more behind and our local market is usually quite different from the national trends.

The above chart is a summary of today's "Hot Sheet" from the Charlotte Multiple Listing Service for single family homes in all of Lake Norman (area 13). These numbers represent a real time snapshot of the past two week's activity. As always, I have included the past 5 months so that you can put these numbers in perspective.

Highlights:

New listings increased by 5% from July. At a time when our market should be seeing a decrease in active listings as we head into the fall, it is a bit disconcerting to see this number increasing. If we add the new listings of 120 with the 55 properties that came back on the market in reality our inventory increased by 175 homes in the past two weeks. At the same time, if we add the contingent, conditional pending and solds we find that 120 properties were taken out of our number of active listings which means we had a net gain of 55 active listings. (This does not include the properties that were withdrawn or expired).

The number of properties that came back-on-the-market, most likely due to cancelled contracts, dropped slightly. This is always a good sign but not significant enough to substantiate a trend.

The number of price changes increased by 7%. Prices are coming down as you may remember from my July sales analysis. This is a critical component of our Lake Norman housing market recovery....painful but necessary!

Pending home sales remained stable. I actually thought we would see a decline so this is an indication that our August sales may be slightly higher than July.

The number of closed sales in the past two weeks increased 9% over both June and July numbers and are the highest for the entire year. Again, I expected to see sales level off so this may be mean that August will have higher sales than July.

Overall, I was pleasantly surprised to see the strength of the activity in the Lake Norman real estate market for the past two week. While most of the closed sales were under $400,000, there were several over $1million. The interesting details about these higher priced sales is that the closing prices were 70% of the listing price. Prices are coming down in our luxury home market and buyers who have been sitting on the sidelines seem to be dipping their toe in the water.

All in all, these numbers provide a glimmer of hope that we will see stronger sales this month than in July. Perhaps it is due to the fear that interest rates are rising or the impending deadline of the $8,000 First-Time-Buyer rebate, but there does seem to be quantifiable, albeit slight, signs of improvement in the Lake Norman housing market.

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Relocating to Mooresville NC

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Any of you who happen to follow my blog will know I am a big collector of Catawba Valley Pottery. The potters in Catawba follow the traditional methods handed down for hundreds of years, including firing their pots in handmade groundhog kilns using wood to make the fire. This is a photo of Michael Ball's most recent "burn" that got so hot severall pots in front actually melted. Below are two of the pots I purchase at his sale last Saturday.

Yes, these are all eyes!

One of his signature pieces...he only made two because they take so long to make!

Mark you calendars for this Friday, August 14th, 2009 from 6-9 pm for the popular and growing "On the Corner of Art and Main"monthly gallery crawl in Historic Downtown Mooresville!

"The Corner of Art and Main" is an artwalk featuring live music, art and festivities. Enjoy wine and cheese as you browse the many shops on Main and Broad Streets that will be featuring the works of local artists.

This Friday's artwalk coincides with the Depot Fine Gallery's August Exhibit free opening reception from 6-8 pm. (105 West Center Avenue in the historic train depot). This month's exhibit features three artists: Leo Gordon, Sandie Bell and John Weidman.

I would like to particularly highlight a friend and very talented artist, Sandie Bell whose art I have admired ever since I met her when I first arrived in Mooresville in 2005. A local resident of the Mooresville Lake Norman community, Sandie's work has won numerous awards and is included in private collections throughout the country. Sandie is also an active member of the Mooresville Artist Guild, Lake Norman Art League, Charlotte Artists Society and Associated Artists of Winston Salem.

This is one of my favorite works of Sandie's which she has replicated on note cards that I love sending to family and friends: "Things are looking up" reflects her spirit as well as life in our great Lake Norman area where hot-air balloons are quite popular.

One of the qualities I appreciate the most about Sandie as an artist is her versatility. She is currently working in acrylics, pastels, collage, watercolor, and mixed media. From traditional still life to abstracts, she enjoys "creating new visual statements by using shapes, patterns, colors and values."

I am particularly fond of abstract art like this piece of hers entitled "Asian Influence"

To see more of Sandie's work, visit her gallery on her website in which is included these categories of subjects: Landscapes and Flora, Fauna, Still Life, Abstract, Figures and Others. And, definitely go to the Depot Fine Art Gallery to meet her on the 14th!

If you have time after the Opening Reception at the Depot Fine Art Gallery on the 14th, I highly recommend that you stroll along Main Steet where you will find more wonderful artists such at "Cotton Ketchie" at his popular Landmark Galleries. This month he will not only have his wonderful water colors, photographs, local pottery and gifts, but the gallery will be showcasing the works of NC artist Tony Craig who also enjoys "incorporating the nostalgic old country stores and grist mills" in his artwork just as does "Cotton".

Finally, stop by for a great glass of wine at our Historic Downtown Mooresville's gourmet wine shop at the corner of Main and Moore Street.

If you can't make it this month, On the Corner of Art and Main is held the second Friday of every month. Enjoy!

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Last week seemed to be one in which every source/pundit of economic news decided to put a positive spin on new data; from our GDP to national June housing sales. For the most part the news was good simply because we didn't do as badly as predicted. Or, in the case of North Carolina existing home sales, they posted their "smallest decline since August 2007 in June with a 17% decrease in total units sold compared to the previous year" according to the North Carolina Association of Realtors.

What concerns me is that this type of news will encourage more optimism in our local Lake Norman real estate sales at a time when we most need to focus on being realistic. A good number of our sellers are "upside-down" or have negative equity in their homes. They simply can't afford to sell their homes at our current market value. These are future short sales and foreclosures. In states like California where they were hit early and hard, they are experiencing multiple offers...but on FORECLOSURES not regular inventory. While I don't think we will get to that point, I do think we are sitting on a lot of inventory of homes that will need to be reduced more than the sellers are able.

While the national focus is on June, let's look at our JULY numbers:

Active Listings remained just under 1600 for the third month in a row. Note the average price of our active listings when compared to those that are under contract.

Contingent Sales also remain about flat for the past few months. These are the homes that are sold but they are contingent upon the buyer selling their home...very weak contracts that could go on indefinitely.

Conditional Sales are actually slightly below where we were at the end of May when we had 56 conditional sales. This is a sign that sales may have peaked for the season. Note that these homes have been on the market an average of 215 days. This doesn't include homes that have been taken off the MLS and re-listed.

Pending Sales are also down slightly for the past few months. Another sign that future sales will be trending slightly lower

The number of Closed Sales dropped 13% compared to July 2008. 88 sales represent the highest one month of sales in 2009 but since this is our busiest season one would expect sales to trend upward. The big question in my mind is "have our sales peaked for 2009?"

Let's put these numbers into historical context:

5-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.

**While my totals on this chart for 2008 sales is 870, when I search on our MLS for the entire year they give me a slightly higher number of 916 so I will use that as our official number for the sake of this analysis.

Clearly our Lake Norman home sales peaked last year in the month of June. Based on our current number of conditional and pending sales, my bet is that we have also peaked this past month for 2009. Right now, with 88 sales and 1563 active listing we have 17.8 months of inventory of homes compared to a balanced market of 6-8 months of supply. While this is a tremendous improvement from our winter highs of 35 months, if sales trend back down this fall and winter we will be back to those high inventory numbers.

One final observation: note that the average price of a home sold in July actually increased compared to July 2008. Yes, we have had some luxury home sales recently but the numbers will knock your socks off:

• 18440 Harbour Light in The Peninsula was listed at $1,699.000 and closed on this past Friday for $1,200,000. This is a 29% reduction from list to sales price and it was on the market for 690 days!.
• 108 Conway Court in The Point was listed at $4,100,000 and closed this past Thursday at $3,100,000 or a 24% reduction from listing price to sales price.

While this is not good news for our Lake Norman home values, it is a good sign that even the luxury home sellers are getting realistic. Since this market has been languishing while the first-time-buyer program fuels our lowest end price ranges, sales like these show that there are buyers at every price range willing and able to buy if they feel confident that they are not overpaying for their home.

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Lake Norman's upscale Simonini Builders is adjusting the plans for their Preserve at Robbins Park in Cornelius because of shifting real estate trends according to a recent article in Business Today.

While this may seem like a minor bit of news, it is actually quite significant because The Preserve at Robbins Park may be the first test of a major shift in future home building in the greater Lake Norman area that might actually bring us more in line with states like California.

Several months ago I wrote about this exciting new development:The Preserve at Robbins Park: Not Your Ordinary New Housing Community! Simonini was already looking towards the future when planning this latest development in Cornelius.

So what are the new proposed plans and why are they significant?

First: Price. This project was planned when sales of $600,000+ homes were still healthy, Since they started clearing the sight in 2008 not one home has been formally reserved. In response, Simonini is planning a new group of homes priced in the $400,000

Second: Size. The developer of the Preserve at Robbins Park is seeking town approval of a reduction of lot sizes AND home sizes. Why? "Focus groups are showing that buyers aren't looking for 4,000 sq ft homes but closer to 2,800 sq. ft. with a master downstairs and one our two bedrooms upstairs." according to CEO Ray Killlian.

Third: Density. With smaller homes on smaller lots, the developer is also requesting an increase in the number of homes in their new plans.

Fourth: Floorplans. According to this Business Today article, "Simonini Builder is bringing Bassenian Logoni Architects of Newport Beach California on board to do floorplan designs and construction drawings of the smaller homes....In California...Bassenian Lagoin works in partnership with builder and developer clients "to create communities that appeal not only to future users, but to builders seeking a competitive edge..." "Bassenian Lagoni's expertise is in designing smaller, more functional, livable homes."

Coming from California to Lake Norman in 2005, I remember telling our Realtor that we really didn't want a home over 2800 square feet because it was just the two of us. Well, we ended up with a home significantly larger because there simply were not any smaller homes available.

Today, if you look at the number of new construction homes languishing on the market around Lake Norman you will find 4,000+ square foot homes once priced in the $600,000+ some now in foreclosure as low as $398,000.

While this national housing downturn has been extremely difficult and painful for so many, if there is one silver lining it is that the future of new construction in Lake Norman will follow the lead of the Preserve at Robbins Park: smaller, more functional and energy efficient housing designed in clusters surrounded by green/natural areas.