Real Estate

Top Realtors say growth keeps coming

By Kate Stevens. Demand for mid-price housing in the Lake Norman area is outstripping supply although luxury homes could sit a bit longer on the market since fewer people can afford them.

The Lake Norman real estate market is expected to continue this low-supply trend into the foreseeable future, according to local market experts.

That’s due to a combination of “stars aligning,” including a labor shortage slowing the renovation of existing homes, new construction and the development of vacant land as well as the continued migration of newcomers to the Charlotte area, said Pat Riley, president and CEO of Allen Tate Real Estate.

Pat Riley, president and CEO of Allen Tate Real Estate

“I don’t see it changing for a long time to come,” said Riley.

Despite layoffs from local Fortune 500 companies like Lowe’s, there are still 4,500 middle market firms in North Carolina that have been attracted to the state’s cost of living, low taxes and vibrant cities, Riley said.

And as more corporations and their employees flock to the state, especially the fast-growing metro-Charlotte area, they all need places to live.

“People are coming in droves,” said Riley.

Although luxury homes may be listed for sale for a longer period of time than mid-range homes, both markets are seeing positive signs of growth, said Abigail Jennings, president of Cornelius-based Lake Norman Realty Co.

“Both markets are doing even better than last year, as we are seeing the inventory decrease in the $1 million-plus market and sales increasing,” she said.

Through July 2017, 77 resale homes costing $1 million or more were sold in the Lake Norman area compared to 63 comparable homes sold during the same time period in 2016, according to statistics provided by the Charlotte Regional Realtor Association.

These homes take longer to sell because there is a smaller pool of buyers.

“The reality is if you have a home over $1 million, you’re fishing for 6 percent of the fish in the ocean and those are very persnickety fish,” said Riley. “They know what they want.”

Lake Norman-area resale homes costing $1 million or more currently have a 12.2 month supply, lower than the July 2016 year to date’s supply of 16.4 months, said Jennings.

In the new construction sector for Lake Norman homes priced at $1 million or more, there is an 11.4 month supply through July 2017 vs. a 13.5 month supply through this time in 2016, Jennings said.

Through July 2017, six new construction homes costing $1 million or more were sold in the Lake Norman area compared to five comparable homes sold during the same time period in 2016.

The number of combined resale and new construction homes for sale in the luxury category priced $1 million or higher totaled 203 through July 2016 compared to 228 during the same time period last year.

“Inventory is down 11 percent,” Jennings said. “That’s a lot.”

Jennings said that decrease is due in part to a higher supply of new construction and builders wanting to sell those already built before building more.

While the luxury home market represents a buyers market, the mid-range $250,000-$499,000 market is a seller’s market, Jennings said.

In mid-range new construction through July 2017, there is a 6.7 month supply in Lake Norman area compared to a six-month supply during the same time period the previous year, according to data from the Charlotte Regional Realtor Association.

A six-month supply is considered a balanced market.

In resale for the $250,000-$499,000 market through July 2017, there is a smaller pool of a 4.1 month supply down from a five-month supply during the same time the previous year.

“It’s really hot,” Jennings said. “Homes need to look their very best.”

Through July 2017, 431 resale homes ranging from $250,000-$499,000 sold through the end of August 2017 compared to 347 comparable homes sold during the same time last year, Jennings said.

In new construction, 196 resale homes priced $250,000-$499,000 sold through the end of July 2016 compared to 124 comparable homes sold during the same time period last year, Jennings said.

Riley said he doesn’t see the housing shortage ending for a few years due to Baby Boomers staying in their current homes and retiring later in life, millennials having children and requiring more space and new residents moving to the area.

The shortage in construction labor—after the recession forced many out of the business—has also played a role in the slow-down of construction and projects, especially since there is a huge premium for new homes, Riley said.

What will further determine the success of the market are mortgage rates, inventory levels and whether large corporations move to the area, said Terrie Fink, managing broker for Premiere Sotheby’s International Realty in Lake Norman.

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