Several weeks ago I wrote an article "Finding the Truth About Lake Norman's Housing Market: A Case Study" It got such a great response and I learned so much preparing it that I decided to do another one, this time on our beautiful, upscale Crescent Homes Community: The Point.
In these real estate "case studies" I use our Multiple Listing Services Archives to research the actual original listing price and listing date to determine exactly how long a home was on the market before it sold and the actual listing to sales price percentage. The need for this effort stems from the common practice of agents taking a listing off of the market and then listing it as NEW when doing a price reduction. While this is helpful to the home seller because it allows their listing agent to market it as new, it makes it nearly impossible for someone to quickly do an accurate comparative market analysis because our MLS system only gives us the most recent listing prices and listing dates. Hence, the need for the archive search below.
Case Study #2: The Point in Lake Norman
Step One:
Do a quick search on the MLS for the past three months including the number of active listings, pendings and solds. The Point currently has 123 active listings, 5 pending sales and 9 homes sold since June 15, 2008. This means that at the current rate of sales The Point has about a 41-month supply of inventory. The overall Lake Norman real estate market has about a 28-month supply of inventory so right now The Point has a seriously high number of listings compared to their rate of sales. You will note in the report below that the average days on the market are VERY high.
Step Two:
This is probably THE MOST IMPORTANT step in this process. As a Realtor, I can do an "Archive" search on each for the properties sold in the past 3 months AND the home you are thinking about purchasing. An archive search in our MLS database tells us the entire history of the property including previous sales, the actual initial listing date, the actual initial listing price, the number of price reductions and the final sales price. This is the only way to find out the real MLS listing data for a given property. (Even this is only as accurate as our MLS so there will be errors.)
Step Three:
Using this archive information, calculate the actual days on the market and the actual % of the sales price versus the first listing price for each comparable property. This is what I found about the 9 sales at The Point:
| Listing Price | Sales Price | % Change |
Days on Market |
|
| 1 | $819,000 | $747,500 | -8.7% |
8/28/06 -7/22/08 |
| 2 | $995,820 | $812,000 | -18.5% | 12/5/06 - 9/12/08 |
| 3 | $815,900 | $831,715* | +2% | 10/3/07 - 6/24/08 |
| 4 | $895,000 | $852,500 | -4.7% | 6/26/07 - 7/17/08 |
| 5 | $948,500 | $865,000 | -8.8% | 1/26/07 - 8/7/08 |
| 6 | $965,000 | $925,000 | -4.1% | 3/28/06 - 7/3/08 |
| 7 | $1,749,000 | $1,625,000 | -7.1% | 9/9/07 - 7/21/08 |
| 8 | $1,750,000 | $1,550,000 | -12.9% | 5/16/08 -7/29/08 |
| 9 | $3,250,000 | $2,900,000 | -10.8% | 10/5/07 - 8/25/08 |
| Average | $1,354,247 | $1,234,302 | -8.9% | 428 Days |
*Note: This property included the purchase of a boatslip not included in the original price
** Note: Sales #2,3,4,6, were new construction so the days on market include construction time
Step Five:
Before making on offer there is one more thing to do if your are considering a re-sale home: research the tax records to find out as much as possible about the current owners: When did they buy, what was the purchase price, and, if possible, what is the loan amount.
Summary:
I was actually quite surprised by these findings. Despite the extremely high number of active listings and average days these 9 properties took to sell, the average list to sales price of a home in The Point was only -8.9% with a high of -18.5% and one sale that actually went over asking due to an added boatslip.
One additional observation: Several of these homes sat at their highest listing price for the bulk of their days on the market. Once reduced, they did sell within a couple of months.
Of the 5 pending home sales in The Point right now, 3 are in the $700,000's and 2 are above $1 million.
It does appear that sellers at The Point, whether builders or individual homeowners, seem to be willing to have their homes or estates on the market for over a year without making significant price reductions. Whether this trend will continue remains to be seen. With over 3 years of supply of active listings based upon the current rate of sales I would predict that prices will come down further until the number of homes for sale drops to about a 1 year supply on hand.
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