This is from an article written by Julie Bird for the Charlotte Business Journal .
Living the good life on Lake Norman costs a little less than it did a few years ago.
The Huntersville neighborhood of Lookout Point is a good example says Debbie Williams, a broker at Allen Tate Realtors. Three years ago, no home at the lakefront development could be bought for less than $1 million. But, she recently sold a home on an acre-plus lot and 270 feet of water frontage for $850,000. Other homes in the neighborhood are listed below the $1 million threshold.
“It has been a challenge to try to let my neighbors know their homes aren’t worth as much as they were in the past”,says Williams, who lives in Lookout Point.
Foreclosures and short sales make up a significant portion of Lake Norman area sales, Williams says. She estimates prices for waterfront homes have dropped on average 11% to 15% since the financial crisis hit. Price drops are common during the sales process. A lake front home at The Point first listed at $3.2 million, for example, but its list price recently dropped to $2.75 million.
It is also costing less to build a house on the lake, says custom home builder Len Bealer of Kenneth Bealer Homes. Material costs are down 5% to 7% and labor costs have dropped up to 20% in the past two years. Waterfront lot prices are down 10% to 15% as well, he says.
In Captain’s Point in Cornelius, one-time $1 million lots are selling for $700,000, says Bill Saint, president and chief financial officer of Simonini Builders, Inc. After ponying up $1 million or more for land, he says, owners typically built 6,000-square-foot or larger homes. Now there’s increasing interest in building smaller and less expensive homes, even on the lake.
Despite lower prices, construction remains a tiny sliver of the Lake Norman market, Williams says. She found only four lakefront homes under construction on the Multiple Listing Service in mid-March. They ranged in price from $645,000 to $1.4 million. Three were in Iredell County.
The construction slowdown has hurt builders. Kenneth Bealer has three employees, down sharply from its peak of 25. Bealer supervises most of the construction himself. Before the recession, the company had posted 18 years of annual growth of 5% to 7%. He recently sold a speculative home, the last one started before the economy stalled, for $1.375 million, or “a significant loss”. It has been “the roughest two years of my life,” he says.
But Bealer says business is reviving. Lower construction costs are helping custom homes compete with resales for buyers. Consumers also are beginning to feel more confident. Bealer recently signed two construction contracts and is working with clients on two or three more.
Simonini also began construction this spring on a 150-home community in Cornelius called Robbins Park. Saint says three homes have sold, and eight or nine are under contruction.Prices start in the high $400,000 and approach $750,000. This price range is “totally underserved” in the new-home market in the lake area, he says. Robbins Park is near Birkdale.
In early March, Saint says seven new homes priced between $500,000 and $800,000 in key area between Interstate 77 and the lake were for sale. Even fewer were listed at higher prices.
“So many people think there’s so much on the market, so much inventory” Saint says.”But if you want a new home at the lake, there are very few homes to choose from”.
The average price of new homes in the Lake Norman market was $631,718 in the fourth quarter, says Bill Miley, Charlotte market manager for MetroStudy. The data reflect sales in 82 subdivisions, many of which are not directly on the lake. The average size was 3,700 feet.
Including resales, Allen Tate’s Williams says homes are selling for less than $1 million represent the bulk of Lake Norman sales. According to MLS, 66 homes sold for less than $1 million between September and mid-March. Another 312 are on the market. Williams found four active foreclosures and short sales in the under $1 million market. Of 31 pending sales, seven were foreclosures or short sales.
In the $1 million to $2 million range, she found 122 listings. None of the 17 sold in the last six months was a foreclosure. In the $2 million-plus market, two were foreclosures or short sales.
