Lake Norman Area 2015 Mid-Year Luxury Property Report & Forecast
Mooresville Million Dollar Market Surges, Davidson and Surprising North Shore Lead Lower Ranges
As the 2nd quarter came to a close, activity in the Lake Norman area remained active, with the $500k-999 range again leading the way as it has for much of the last year. Davidson, along with the north shore areas of Sherrills Ford and Troutman, all showed over 20% increases in closings in the sub-million range, with the west shore once again showing steady growth as well. Another power showing by Robbins Park in Cornelius helped that area to remain comparable to last year’s results, with 50 homes selling in the 500-999k range (vs 52 last year). While Mooresville was off slightly (95 closings vs 102 in 2014’s 1st half), the area remained a popular choice, particularly The Point.
In the luxury ranges above $1 million in value, Mooresville led the way, posting an almost 50% increase in closings in the range. Cornelius, Davidson, and the west shore all posted comparable numbers to last year. That said, in a replay of last summer, Cornelius rolls into the 3rd quarter with a spike of 13 pending deals over $1 million already set to close in the second half (vs just 13 deals the first 6 months). Yet another reminder that there are a host of indicators to evaluate in understanding market conditions.
The Lake Norman index of pending homes rests at 132 luxury homes under contract over $500,000, after peaking at a 10 year high in early June of over 170 homes pending. The current 132 total compares similarly to this time last year, and points to a solid second half in most price ranges. The ultra-luxury range above $2 million has seen similar activity to last year, a period in which Cornelius only saw 1 deal the 1st half, yet surged to 10 deals in the 2nd half. With 5 deals in the hopper yet slightly lower showing activity, Cornelius seems to project out to about 10-12 total deals for the year, while Mooresville should end similarly. This would give the lake area comparable to slightly higher sold results in the 20-24 unit range, after two years at roughly the 20 mark. Historically, this range sees at least half of it’s activity between June and November. Thus far, 7 of 8 transactions over $2m have landed in the range between $2 million and 3 million, with 1 pending deal at $3.89m at The Point.
Showing activity relative to last year is a mixed bag, in some areas running well ahead, while others have seen decreases. Showings in Cornelius, while down compared to last year, remain as active as any area in the region. The Point has seen a solid spike in the $1 million plus range, while Davidson and the west shore have seen double digit increases over last year in the $500-999k range, pointing to active 3rd quarters in those areas and price segments.
The popular range below $1 million continued to show steady activity during the 1st half of 2015, albeit with a larger share of transactions moving to new construction options like Robbins Park. Total luxury inventory dropped to under 100 homes, a fairly low threshold for the summer months in Cornelius (past years saw peak summer inventories in the 110-130 range), yet once again that varied by price point with the 500-999k range and $1 million to 1.5 ranges fairly thin, yet other segments heavier in inventory.
Showings in Cornelius have been fairly consistent with 2014 results, boding well for the 3rd quarter, which also produced a major uptick above $1.5m last year.
The Peninsula lagged last year just slightly (18 vs 21 closings the 1st half) but like the balance of Cornelius, has spiked with 15 homes pending this month, and a low total inventory of 38 homes. Robbins Park has an impressive 15 homes pending moving into the 3rd quarter.
$500-999k Range Sizzles During First Half of 2015
Riding an almost 50% increase in home units sold in the popular $500-999k range, Davidson’s luxury housing market pushed confidently into the 3rd quarter with River Run posting a near 25% increase compared to the 1st 6 months of 2014. Davidson’s emerging dining scene, farmers’ market, and trails continued to be a popular choice amongst home buyers with an impressive 29 luxury homes over $500k now pending as we move into the 3rd quarter.
New construction options helped attract home buyers, yet also pushed inventory up compared to last summer at this time (81 available vs 67 last year). While most of that new construction inventory remains in the lower price points, some new offerings cresting $1 million have appeared, while 3 homes in that range closed during the 1st half. Inventory in River Run has pushed up into the low 40’s after reaching numbers in the low teens during the winter.
Showings in Davidson have tapered slightly over the last 60 days to around 3 per month on average, which seems to point to a slightly more level amount of contractual activity moving into the 2nd half. With 29 pending contracts, Davidson still projects to have a solid 3rd quarter.
Mooresville Gains Steadily, Point Surges in 1st Half
Driven by a 28% unit sales increase at bell weather community The Point, Mooresville posted a single digit increase in closings over the 1st half, with the $1 million to 2 million segment showing a strong surge in closings (from 15 in last year’s 1st half, to 26 in 2015). The ranges above and below that segment were flat or even off slightly, but the strong performance in what was mostly the waterfront areas of Brawley School Road, and Langtree Road, helped the area post a spike in sales.
Inventory in Mooresville, which has returned to seeing active development, also surged to over 272 luxury homes on the market. The Point saw inventory climb to 75 homes for sale above $500k, with both inventory numbers impacting upward price appreciation despite above average sell thru in the area. The Point saw a strong 35 homes close the first half, vs 27 last year, and also moved into the 3rd quarter with 12 homes under contract. While this pending number was down somewhat from a fantastic April/May period, the summer vacation period can cause fluctuations in contractual timing. Pricing in The Point has generally seen single digit per/foot appreciation the past two years.
Showings in Mooresville moving into the 3rd quarter were almost identical to numbers last year, with homes below $1 million averaging around 3 showings per month, while those above averaged 1-2 showings. Similar activity last year led to a solid second half of the year with 28 home sales, a pace which would be off slightly from this year’s first half, but produce over 60 homes sold for the year, which would better 2014’s 58.
The West Shore
After an eye opening run up of activity over the past 12 months, the Denver and west shore areas below the 150 bridge continued to show solid activity, particularly in the sub-$1 Million category. 37 homes closed in the range compared to 33 the first half of 2014, and the area rolled into the 3rd quarter with 17 more homes pending in that range.
The range above 1 million remained more inconsistent, with 5 closings in the first half compared to 6 the prior year, with 1 home pending above $1 million on the western shores of Lake Norman as we move into the 3rd quarter.
Total showings on the west shore were up significantly moving into the 3rd quarter in the range below $1 million (388 to 311), which seems to point to continued activity in that range, while inventory declined from 86 to 80 units. The over $1 million range remained weighted more towards a buyers’ market, with 22 homes active, 5 sold so far, and 1 pending.
The North Shore
Point Lot Estate Overlooking Lake Norman State Park in Northview Harbour
Sherrills Ford and Troutman Trend Upward in Activity
The long quiet north shore area above the 150 bridge surged forward on new activity the first half of 2015. The area saw 27 closings in the active $500k-999 range vs just 20 last year, and also heads into the 3rd quarter with a very solid 17 homes in that range pending, to go along with 2 in the $1 million plus segment.
The area still has 108 luxury homes active, but the buying activity has shifted from an environment in which buyers had significant leverage, to one in which sellers are starting to see some improvement in pricing and activity, particularly in areas like Northview Harbour and the Perth Road corridor.
Huntersville & Skybrook
The Huntersville and Skybrook areas remained hot in the lower ranges. In the 250-400k range, there was almost one house pending for everyone on the market with 99 homes actively listed and another 96 under contract.
The area’s luxury segment above $400k took a bit of a roller coaster ride, with closings off by 50% from last year’s May/June (17 sales vs 35 in ’14) yet closed the quarter strong and now sports 29 homes pending in the upper price ranges.
After 18 months of blistering sell-thru in the area, showings have tapered off just slightly, with the average home in the $400k range seeing about 3-4 showings per month, following a period in which 5 or more were commonplace.
The waterfront lot market rebounded rapidly this spring, with 20 lots closing in the May/June period compared to just 11 last year during the same span. The quarter also ended strongly with another 20 lots under contract, a number that does not include residences later slated for removal for new construction projections.
Properties in both Cornelius and Mooresville once again began to approach 2008’s peak lot values, with tear downs in both the Belle Isle/Jetton area in Cornelius, as well as the Brawley corridor in Mooresville fetching from $900k to well over the million dollar threshold.
One new dynamic in the lot market is the micro-trend of high end custom home projects now aggregating multiple adjacent tear down lots together to achieve an “estate compound” type feel, with multiple large projects in the more high demand areas already underway. These projects will ultimately raise the bar for Lake Norman’s highest end home values in select circumstances to crest the $10 million mark, a range that was extremely rare prior to the current market upswing.
Carolinas Multiple Listing Service Withdraws From Zillow
If you’re a consumer of digital real estate content, you’re no doubt familiar with Zillow. You may also have heard or read that many multiple listing services across the country have been in negotiations with Zillow to improve the accuracy of information on the portal (which comes from many sources including out of date public records). Complaints from homeowners with their listings displayed inaccurately, as well as from realtors concerned about inaccuracies in data like the “Zestimate” function (which in many cases has proven to have been inaccurate by more than 25% of the home’s value), have led to hard discussions about how data is mined and displayed on Zillow, and who controls that content.
The local multiple listing service opted to end its syndication feed to Zillow this spring in order to force negotiations to improve data accuracy and content control, a move which removed local listing inventory from Zillow. Since then, individual companies like IvesterJackson have been forced to manually upload listing information, a task that entails a constant monitoring and re-loading of data to insure homes stay on Zillow and are accurately displayed. Uploaded homes have randomly dropped off, pictures have disappeared, all requiring they type of constant, labor intensive monitoring that should not be necessary in this age of automation. Absent full and accurate information, consumers are likely to seek it out elsewhere.
In the interim, Realtor.com, the #2 portal whose data comes directly from the MLS system, has embarked upon an aggressive marketing campaign in an attempt to usurp Zillow as the number 1 consumer choice for digital content. While Zillow is a popular choice for shoppers, it has struggled with home sellers and listing agents, who remain concerned about potential misrepresentations that have occurred as a result of Zillow’s data inaccuracies and the distorted home values being generated by the “Zestimate” algorithms (which cannot be altered manually). It is a situation that is being monitored closely and one that will likely see additional change over the next year.
Ivester Jackson & Christie’s Feature Lake Norman Luxury Properties at Art Southampton
The northeast’s premier summer art exhibit, Art Southampton in The Hamptons, attracted over 90 international galleries and a star studded crowd of 20,000 art collectors and investors that included Howard Stern, Valentino, actress Tracy Pollan and many names from the northeastern financial industry.
Ivester Jackson & Christie’s
Over 65 Ivester Jackson luxury listings from the Charlotte and Lake Norman region were amongst those prominently displayed to patrons as part of the company’s co-sponsorship of the event with Christie’s International Real Estate and several leading affiliate companies. The company exhausted supplies of its exclusive “Christie’s Collection of The Carolinas” luxury home catalog while featured Ivester Jackson listings flashed across the exhibit’s large high definition flat screen.
The northeast has generated significant buyer interest in the Lake Norman and Charlotte regions and the financial corridor states consistently rank amongst the highest frequency search results at IvesterJackson.com. Ivester Jackson continues to take advantage of its ability to gain exclusive exposure for client properties to this important audience via its relationship with luxury leader Christie’s International Real Estate.
Based upon a roughly 20% uptick in our listing page views from the March/April period, to those of the just completed May/June period, we believe activity will continue to remain very active. Showing trends in most of our key geographic areas around Lake Norman and in Davidson, have either reached or exceeded last year’s comparative levels over the past 60 days, and given those two leading indicators, page views, and showing requests, both appear to be trending positively, we anticipate that the $500-999k range will continue to exhibit lower inventories and active sell-thru. Pending transactions and similar leading indicators in the $1m-2.5m range also project out to similar levels of activity as last year, although inventory in the over $3 milllion range has increased lake-wide to 20 homes on the market, which will make for a more competitive selling marketplace.
While the 2nd half of the year tends to be slightly less active than the late spring period, over the past few years, the Lake Norman region has seen solid if not robust buying activity up through early November, and this year appears to be trending similarly. Fundamentals impacting the overall market remain positive, with lower unemployment levels, solid corporate earnings, and low interest rates continuing to drive activity. At some point this fall, analysts are forecasting a rate increase from the Federal Reserve, although most feel it unlikely to be in an amount that would jar the financial markets.
Inbound migration continues to drive the real estate market in North Carolina (in conjunction with strong corporate earnings). Conditions in states like New York, Florida, California, the Washington DC area, as well as the northeastern financial corridor continue to produce inbound migration for both primary and secondary residences in our area. While some of those areas have experienced some recent tapering, in general, most continue to generate robust activity and interest in our region and luxury property market, even beyond that which existed prior to the economic downturn.
We Look Forward To Providing Advice On Your Next Property Transaction
Ivester Jackson I Christie’s International Real Estate
704.655.0586 (9-5 M-F)