Lake Wylie Waterfront Sales Update

Year End 2011 - Lake Wylie Real Estate

The following report was compiled by The Lake Wylie Man, using the Charlotte and Piedmont Area MLS systems for Lake Wylie real estate data.

The headlines in the Charlotte Observer for January 1, 2012 said it all. On the masthead, “Happy New Year”. In bold type just below, the headlines read, “Housing Glut Looms”. It was quite a paradox, especially if you’re in the shoes of someone trying to sell real estate.

The Observer presented an analysis of something called “Shadow Inventory”, defined as homes that are crawling through the foreclosure process and those with delinquent payments that are unlikely to recover. In York, Mecklenburg, and Gaston counties, “shadow inventory” outnumbers properties listed on the MLS about 2 to 1. What that means is that we’re unlikely to see a reprieve from the price pressures we’ve been dealing with for the past 3 years.

However, we have seen some very encouraging signs as well. Did you know that automobile sales are up significantly in our area? People are tired of waiting for things to stabilize. They’ve been holding off, being cautious, and have waited long enough. I think the same thing is occurring with lakefront real estate. I’m not sure what the story is between luxury cars vs. more modest models, but I’d be willing to bet that the folks who have been sitting on the fence a bit are settling for less expensive cars than they might have purchased five years ago. I KNOW that is what we’re seeing in lakefront real estate:

It is true that prices on homes are down 25-30% vs. 4 years ago; we’ve seen a few same-property sales, and have priced properties on current comps vs. 4 year old comps, and prices have certainly fallen. You could argue that prices in 2006-07 were inflated beyond “true value”, but as we all know, price is determined in part by what a buyer is willing to pay.

In combination with the drop in home price, however, we’re also seeing buyers purchasing smaller, more modest homes. In 2011, there was just ONE lakefront home sold for >$1 million. To be fair, ten of the homes sold in 2011 started out with a price tag of over $1 million (13% of the total lakefront homes sold). The supply hasn’t changed; there are still plenty of high priced homes on the market. There is simply less demand for luxury homes. Buyers are more cautious. (And so are lenders!!)

Another positive sign we’re seeing is the increase in sales of waterfront lots.

Forty three lots in 2011! That’s more waterfront lot sales than prior to the economy downturn! True, half of those sales were foreclosures, and average price of the lot was a dismal $181k. Many of the lots sold were “lesser lots” - - shallow water, limited view, other issues such as proximity to power lines or topography challenges. However, we had EIGHT sales of lots $300k and up. Some buyers are finally coming to the realization that premium lots cannot be bought for $150,000. Hallelujah!

So what to expect for 2012? I think we’ll see the number of waterfront properties continue to rise. The “sweet spot” for waterfront homes will be those priced in the $450-$700 range. Weekenders and cabins will find buyers in price ranges under $350. Foreclosures and distressed sales will still be a strong factor in our market, unfortunately. I dealt with quite a few of those in 2009-11, and have learned how to work the system.

Personally, I’m making some changes in my business to offer an even stronger marketing program. My waterfront transactions in 2011 were at an all time high in number, and I outsold the next highest selling waterfront agent by more than double.

Please let me know if you have any questions or want to further discuss the marketing of your property. I appreciate your working with me and wish us all a prosperous 2012.

David Coone

The Lake Wylie Man

Wilkinson and Associates real estate Charlotte