The other day I asked my broker/owner of RE/MAX at the Lake exactly what was selling right now. Her answer? "Bargains." Getting her insight based upon the business of 70 agents further underscored my own feeling that the Lake Norman real estate market is much weaker than most sellers and even local Realtors grasp.
Important Signals from the Current Lake Norman Housing Market:
There are too many active listings in the Lake Norman area: We currently have 1623 active listings for sale in the Lake Norman area in our MLS. Based upon the current rate of sales this equals a 20.8 month of supply on homes for sale...we should have 6-8 months of listings.
Pending and recent sold numbers are still falling: This past month we sold 78 homes and there are 77 sales pending. (See links below to my market reports)
Foreclosures and auction sales are up: Builders are holding auctions for entire group of homes. Realtors are bundling foreclosures and holding auctions. There are now a good number of bank-owned homes for sale as well as listings in "pre-foreclosure" status.
Second appraisals are being required by lenders before closing: Just as I experienced in California in the early 1990's recession, lenders are sometimes getting a second appraisal right before closing because of concern related to the declining home values.
The number of vacant homes is increasing: Whether new homes or resale, many homes currently on the market are vacant.
Buyer incentives are extensive: The best example is an event held last weekend by Lake Norman Signature Homes and The Point: "Tax Free Weekend" which offered a "Real Estate Stimulus Package", Builders to pay first year of buyer's property taxes and 1/2 commission paid to Realtor upfront for all new custom construction contracts.
Builders are in survival mode: New permits have dropped significantly. Most builders are not building new homes unless they have a buyer in place. Some builders here in Lake Norman have gone out of business entirely while others are hanging on hoping to survive.
Lake Norman Realtors are leaving the business: This is very common during a down market but I am hearing about more and more Realtors either leaving the business or getting part-time jobs. This kind of market is not for the weak of heart!
For Lake Norman sellers:
- Have your Realtor do a thorough market analysis of your home. The very worst thing you can do is "Chase the Market Down" by making small reactionary price-reductions rather than being pro-active and pricing your home slightly below the most recent sales comparables.
- Don't be offended by low-ball offers! Try to work with every buyer who makes an offer. My broker told me about a recent sale: The listing price was $1.4 million and the offer was just over $1 million. The seller didn't even counter the offer. Three weeks later the seller came back and signed the offer.
For Lake Norman home buyers:
- Don't be afraid to make a low-ball offer if you feel a home is overpriced. Not every seller is realistic yet but you won't know if you don't try.
- Get a good lender and be pre-approved before writing any offers. Many contracts are falling apart because of problems getting a loan or appraisal. Your offer will be stronger if you can present strong evidence that you will be able to close the sale!
I heard a pundit the other day state that he didn't expect to see equity in homes grow until 2012. Real Estate right now is more about finding a good home and quality of life than it is an investment for most people. If you are buying long-term don't let this market discourage you from doing what is best for your family. Living in Lake Norman is priceless...just be an informed buyer and make sure your Realtor is looking our for YOUR best interests.