Data acquired from the CMLS 5/1/2010 - 5/31/2010
The luxury real estate market has been among the hardest hit by the shift in the Charlotte real estate market since the peak of 2007. The lack of confidence in the luxury market, the high unemployment, and lack of reasonable financing caused inventories to swell and prices to drop. No place was this phenomenon more apparent than in the Lake Norman area, north of Charlotte North Carolina. While sales in May were up 33% over the previous year, the 22% drop in the average price per sq. ft has resulted in homes that were out of reach now remarkably affordable.
In May, 88 single family detached homes closed in the Lake Norman area at an average sales price of $447,673. Sellers received 91% of their original asking price after a, short in this market, 126 days on market (DOM). Many offered the purchaser of their home an additional concession (typically seller paid closing costs) of $4,380.
Eight homes that were listed for more than a million dollars closed in the Lake Norman area, resulting in a 27 month supply of luxury properties remaining on the market. The luxury sales closed at 84% of the seller's original asking price after 235 days on the market. The average price per square foot has also fallen from the 2007 peak of $314.87 to now $235.25. While the MLS reports that none of the listings offered incentives or concessions to the buyer, 271 Milford Circle in The Point included a 2006 Porsche Cayenne S (worth about $30,000 according to KBB.com) with the sale. It originally sold for $1,418,000 in '06 and closed (Porsche SUV & boat slip included) for $1,100,000.
A bright spot in the luxury market was 18201 Mainsail Pointe Dr in The Peninsula neighborhood. Originally listed for $3.4 million, the 6400 sq. ft. waterfront home closed for $2,695,000. You wondering what makes selling a home for 79% of the asking price a bright spot (for anyone but the buyer)? Well, it is proof that there are purchasers with money searching out luxury properties at the right price. Plus, the MLS listing shows that the buyer obtained a mortgage for $1.5 million dollars at an interest rate below 6%. That was unheard of just 12 months ago as the major lenders had stopped lending jumbo mortgages or made it absurdly undesirable.
In the Lake Norman area, the inventory grew by 230 homes in May to a total of 1,415 homes available for sale. Bank owned foreclosures and short sale listings account for only 7% of the total inventory but 22% of the closed sales in May and are accounting for 30% of the current under contract inventory. With 16 months worth of inventory, prices will likely continue to fall to meet the demand of consumers who are shopping in earnest for "a deal." The recent dip in mortgage interest rates are making this summer an excellent opportunity to buy or sell so long as the home is priced for today's market and you are willing to get create if necessary. (Porsche not required).
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