Low Rates, Pricing Bottoms, Spur Increase in Lake Area Luxury
Unit Home Sales For 2012
 As has been the case
for most of 2012, luxury home sales surged on through early November, with a
total of 383 luxury homes sold year to date, versus 299 at this time last
year in the Lake Norman/Davidson area. As we forecast in August, high summer
Internet and home showing activity materialized into actual transactions
throughout the fall with most areas and pricing segments running well ahead
of last year in terms of units sold. As of this writing, the area luxury
pending index stands at 74 luxury homes under contract, a solid number
heading into the holiday season and year end.
Several areas and
price ranges reported excellent results so far, with the surprise of the year
being the robust activity on the west shore of Lake Norman in the under 1
million dollar waterfront segment, where 35 properties have sold so far this
year. Cornelius has paced the east side of Lake Norman, particularly in the
500k-999k range, where 73 homes have sold compared with 54 last year, an
increase of 35%. Activity in those segments also spurred an improvement in
pricing in some areas like The Peninsula, where the under 1 million range saw
an uptick in average sold per foot pricing from 163.00 per square foot in
2011, to 172/sf thus far in 2012. Segments in Mooresville, The Point,
Davidson, and some areas on the north shores of Lake Norman also showed
upticks in unit sales, as well as modest improvement in pricing.
Ultra Luxury
Segment-What may come as a slight surprise, given the recent headline
stealing 4.5 and 7.5 million dollar transactions on the lake, is the fact
that the range above 2 million in list price, has underperformed relative to
both the lower ranges, and last year, when 16 deals closed versus the 9 lake
wide so far in 2012. The high end deals of recent months will likely help
appraisal values given they were done at solid per foot prices, but there
remains a pretty competitive level of inventory relative to the number of actual
sales. The range is such a small subset of the market that a handful of deals
can change the dynamic, from lagging to robust, yet it still seems there's
more work to do in terms of inventory reduction in this range (there are 34
homes lake wide on the market over 2 million).
Inventory-Inventory
levels have continued to show improvement in most areas, and 2 of the 3 price
ranges we track in the luxury space. At the height of the recession, there
were close to 900 luxury homes on the market, today, there are 433, including
34 over 2 million, and 11 over 3 million. Distressed inventory has also
remained manageable, with 29 homes on the market, or
less than 6% of total listed luxury inventory (and just 1 in River Run, 2 in
The Point, and 3 in The Peninsula over 500,000). Slim distressed pickings in
the high demand communities.
Banks have continued
to unwind distressed properties at a pace that the markets have been able to
manage the past year and a half, and while Notices of Default did trend
up slightly for a period this year, it so far has not translated into another
spike in actual distressed homes hitting the market.
Of the new metrics
we've introduced, our smart phone inquiry tracking has shown a decrease in
total drive by traffic of 35% since mid-September, something we view as
typical for the season, given showings begin to decline this time of year as
well. One encouraging factor coming from our smart phone tracking, is the 36% makeup of out of state
inquiries at a time of the year that we anticipated this
proportion would drop. At the height of the summer, out of state drive by
inquiries were running at 50% of total, so while we've had a drop, its
indicative of a remaining high level of interest overall.
|
