Wow, what a month this has been for not only Lake Norman real estate but our national real estate market!
Hot of the press, of course, is the big news that President Obama signed into law yesterday the newly revised and extended Homebuyer Tax Credit! Not only does this legislation extend the $8,000 first-time home buyer tax credit to April 30, 2010, it also adds an exciting new provision. As of yesterday and through April 30, 2010, homeowners who have lived in their primary residence for 5 consecutive years out of the previous 8 years will be eligible for a tax credit of up to $6500 if they sell this home and have a new written purchase contract by April 30, 2010 and closing no later than July 1, 2010. This is expected to be a big boost to home sales throughout the country.
Other good news came from the Federal Reserve this week. They will keep the target rate for federal funds at zero to .25% and "continues to expect that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period".
At the same time the National Association of Realtors report a record 8 straight months of pending home sales increases.
However, on the negative news side, there has been much discussion about the "shadow" inventory expected to come on the market next spring and a second round of foreclosures brought on by Option ARMS and Alt-A loans that are resetting over the next 18 months. Some are saying that this second wave of foreclosures, which for the most part are not subprime, will hit the mid-range and luxury home markets because these are loans that the middle class Americans got during the 2004-2007 time-frame. And, getting new home loans, especially jumbo, are still extremely challenging and a tedious process at best.
It is truly impossible to find any consensus on the future of the US housing market.
However, by taking a look at our local numbers we can have a better understanding the current Lake Norman real estate market and home sales trends and glean potential mini-trends from these. Below are our October real estate numbers for Lake Norman:
Lake Norman's October 2009 Housing Statistics
- Active Listings continue to decline (4.0%). As I have written many times, this is an important part of our Lake Norman housing recovery. Again, note the average price of our active listings when compared to the average price of our solds this past month. Our high-end market is still suffering however I am seeing some increased activity in part due to foreclosures and short sales.
- Contingent Sales are down slightly compared to the 17 in September. These are the homes under contract that are contingent upon the buyer's home selling
- Conditional Sales are up slightly compared to 58 in September. This confirms that recent activity remains at about the same level as last month
- Pending sales dropped slightly compared to 87 in September. This would further confirm that we might expect November closed sales to be about equal to October and September which would actually be a significant improvement over November 2008.
- The number of closed sales was identical to last month and a whopping 22% higher than October 2008! I am now feeling pretty confident that our fourth quarter 2009 sales will be significantly stronger than last years record lows. While this is relatively good news, it is hard to predict past November at this point.
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.
**I have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009 and the totals in the prior calendar year.
Overall it is my opinion that sales will definitely be stronger in our fourth quarter compared to last year. Granted, we are up against some very weak sales but I like the trend! Some of my buyers have jumped off the fence to take advantage of some incredible deals in all price ranges.
Based upon our October sales we currently have 17.7 months of active listings which is 3 times the 6-month levels of a balanced housing market however we are seeing this number improve slightly each month. Yes, Lake Norman is clearly in a buyers' market and probably will be for some time to come but we are heading in the right direction.