The real estate market at Lake Gaston went through many changes in 2022 as did most of the country. The first half of the year experienced multiple offers and waterfront homes selling for more than asking price. The second half of the year, with rising interest rates, we saw fewer buyers. Many buyers have been priced out of the second home market. We still have the scarcity of listings for new homes, but many buyers are taking a wait and see approach.
At year-end Lake Gaston Realtors sold 206 waterfront home transactions closed, averaging $813,892 each. Totaling $167,661,725 or a decrease of 9.21 percent in dollar sales over 2021 sales. Our average waterfront home listing price was $817,334 at time of contract. The average selling price was 99.5 percent of the asking price in 2022 versus 100.7 percent in 2021. Unit sales of waterfront homes was down 24.0 percent from 2021, because of lack of inventory and rising interest rates. Offshore homes showed an increase of 32.9 percent over 2021 sales with 146 closed, averaging $209,886 each, totaling $30,640,480. Waterfront lot sales were down with 76 sold, compared to 137 last year, averaging $194,163 each, totaling $14,756,370, that’s down 42.0 percent. Offshore lot sales improved with an increase of 9.8 percent from 2021 levels averaging $22,525 each. Total homes and land (lots), for firms all around the lake, closed 571 transactions compared to 668 in 2021. Totaling $220,712,074 compared to a dollar amount of $244,868,702, a decrease of 9.87 percent above the same period in 2021. Sales numbers are from the Roanoke Valley Lake Gaston Board of REALTORS® Multiple Listing Service (MLS) and do not include private sales.
The median sales price for waterfront homes in 2022 was $756,000, a 25.37 percent increase in sales price over 2021. The median price for offshore homes was $198,000, an increase of 13.86% in sales price over 2021. The median price of waterfront lots decreased 9.1 percent as compared to 2021 levels.
The Conference Board Consumer Confidence Index® increased in December following back-to-back monthly declines. The Index now stands at 108.3, up sharply from 101.4 in November. “Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus. Vacation intentions improved but plans to purchase homes and big-ticket appliances cooled further. This shift in consumers’ preference from big-ticket items to services will continue in 2023, as will headwinds from inflation and interest rate hikes.”
The National Association of REALTORS® reports existing-home sales fell for the eleventh consecutive month in December. Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 1.5% from November. Year-over-year, sales sagged 34.0%.
“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR Chief Economist Lawrence Yun. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”
“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, economists predicted Tuesday during the National Association of REALTORS®’ annual Real Estate Forecast Summit. Next year, mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, according to NAR’s forecast. However, the details could be different from region to region.”
“Some housing markets may see an uptick in homebuying activity at the beginning of the year, especially if mortgage rates continue receding from a recent high of 7%. Housing inventory is expected to remain tight in 2023, with housing starts below historical averages and fewer homeowners willing to sell, said NAR Chief Economist Lawrence Yun. The ongoing housing supply challenges will prevent home prices from falling, though price appreciation will slow, he added. “I see many hopeful signs for early next year,” Yun said.”
“But first, the market has to close out 2022, a year when inflation soared to a 40-year high and rapidly rising mortgage rates put the brakes on what had been a pandemic-era homebuying frenzy.”
Mortgage interest rates remain high, 6.35 percent for a 30-year fixed rate mortgage on a primary home and 6.9 percent for a secondary home. The Fed has also imposed a fee for second home mortgages of 1.25 to 4.0 percent of the loan amount. The 30-year mortgage interest rate a year ago was 3.5 percent.
Available waterfront home inventory remains at an all-time low. In 2022 we had 192 new waterfront home listings become available compared to 262 in 2021, a 26.7 percent decline. But, in 2022 we sold 206 waterfront homes compared to 271 in 2021. The waterfront homes sold in 2022 priced below $600,000 was 67, priced between $601,000 and $1M were 97 and $1M plus was 42. Compare this to 2019, our last “normal year”, sales of waterfront homes priced below $600,000 was 228, priced between $601,000 and $1M was 47 and $1M plus was 4. Again, the increase is because of the lack of available listings, driving prices up and an increase in high-net-worth buyers.
Have you been thinking about selling your home? There are potential buyers looking for waterfront homes, priced right and in good condition. Do not miss a great time to sell. The shortage of inventory will likely result in a faster sale at a premium price. “Spruce up” your home and get it listed right away! A full-time REALTOR®, who provides written data such as this and prices your home correctly, is essential.
REALTORS® around the lake agree that 2022 is a challenging year for real estate. The shortage of listings continues as buyers wait eagerly to buy lake property. We have experienced inflated pricing, multiple offers, and waterfront homes selling for over asking prices. When compared to last year this time, we see a lack of available waterfront home inventory has slowed sales. Lot sales have also decreased dramatically as quality lots are also in short supply.
In the first nine months of 2022 we have sold 162 waterfront homes, averaging $808,464 each totaling $130,971,126. The average price is up 19.27% of the average sale price for the same time period in 2021. Resulting from a combination of inflated prices, because of inventory constraints, and the increased sale of larger, more expensive homes. The median sold price of waterfront homes in 2022 is $742,500 compared to $600,000 in the same nine months of 2021, totaling an increase of 23.75%. The total dollars sales of waterfront homes is down 4.82% in the first nine months of 2022 compared to the same time period of 2021.
Offshore home sales this year total $24,872,280 compared to $17,477,220 in the first nine months of 2021. Totaling an increase of 42.31%. The average offshore homes sold for $220,169 compared to $183,971 in 2021 during the same time period. Resulting in an increase of 19.68%.
Waterfront lot sales are down 43.75% in unit sales with 63 sold in 2022 and down 38.63% in dollars sales compared to 2021 sales for the first nine months. The average waterfront lot has sold for $204,436 this year. Unit sales of offshore lots totaled 89 at the end of September and that was the total at year-end 2021.
Out total market, homes and lot dollar sales in the first nine months of this year total $174,758,729, a decrease 2.16% of the same time period in 2021.
All figures are from the Roanoke Valley Lake Gaston Board or REALTORS Multiple Listing Service and do not reflect private sales.
The 30-year mortgage rate today is 3.35%, up almost a full point since last year this time. The rates are still low, I hope this will not hinder sales here at the lake.
The Consumer Confidence Index® declined again in September, following decreases in both July and August. The Index stands at 109.3, down from 115.2 in August.
The Consumer Confidence Index® increased in September for the second consecutive month. The Index stands at 108.0, up from 103.6 in August. “Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. Concerns about inflation dissipated further in September—prompted largely by declining prices at the gas pump—and are now at their lowest level since the start of the year.” “Meanwhile, purchasing intentions were mixed, with intentions to buy automobiles and big-ticket appliances up, while home purchasing intentions fell. The latter no doubt reflects rising mortgage rates and a cooling housing market. Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022, but inflation and interest-rate hikes remain strong headwinds to growth in the short term.”
Existing-home sales decreased slightly in August, marking the seventh consecutive month of declines, according to the National Association of REALTORS® (NAR). Total existing-home sales, were down 0.4% from July, year-over-year, sales faded by 19.9%
Pending home sales also decreased for the third straight month in August, according to the NAR. The Pending Home Sales, a forward-looking indicator of home sales based on contract signings, fell 2.0% in August. Year-over-year, pending transactions are down by 24.2%.
"The direction of mortgage rates – upward or downward – is the prime mover for home buying, and decade-high rates have deeply cut into contract signings," said NAR Chief Economist Lawrence Yun. "If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize."
Yun expects the economy will remain sluggish throughout the remainder of this year, with mortgage rates rising to close to 7% in the coming months. "Only when inflation calms down will we see mortgage rates begin to steady," said Yun. As a result of the current interest rate environment and weaker economic activity, NAR expects existing-home sales to decline 15.2% in 2022, while new home sales are projected to fall by 20.9%.
Interest rates at the time of writing were 6.6% for a 30-year mortgage on a primary home and 8.375% for a second-home.
In the first nine months of 2022 we have seen 163 new listings on waterfront homes. Compare that to 196 the same time period of 2021. This number also points to our inventory shortage.
We are seeing the real estate market cooling down here at the lake. If you have been thinking about putting your Lake Gaston property on the market now is a great time before interest rates increase more and the economy continues to slow. We have buyers waiting for that right property to come available. To find a buyer you need to price your property competitively in our currently changing market. Give me a call or send me an email, I’ll be happy to give you my opinion of value.
In the first six months of 2022 our total closed sales, land and homes have totaled $115,091,246 down from $119,234,545 the same period of 2021 or a decrease of 3.47%. Closed sales on waterfront homes were down 7.19% in dollar sales in the first six months of 2022 over the same period last year. We have closed 109 waterfront homes this year compared to 140 last year. The average sold price of waterfront homes in 2022 is $790,850 up 19.21% over the same period in 2021. The median price of waterfront homes sold in 2022 was $725,000, up from $574,500 last year or a 26.20% increase. The increase in the median homes sales price here on the lake point to a combination of home prices increasing and sales of higher priced homes. On 7/6/22, we show 22 waterfront homes sold on the lake for a $1M or more this year. Seventeen sold in the same period of 2021 and 3 sold in 2020. The National Association of REALTORS (NAR) reports the median sale price of homes nationally has risen 14.6% over the same time last year.
This year, 69 offshore homes have sold, and their total dollar sales are up 63.64% this year compared to last year. Waterfront lot sales are down 44.91% in dollar sales from last year with about half the number of lots sold in 2021.
All sales numbers are from the Roanoke Valley Lake Gaston Board of REALTORS® MLS and do not reflect private sales.
Getting “priced out of the market” is a fate that first and second home buyers might face in today’s real estate market. After a pandemic-driven boom in the sector; we see higher home prices and loan increases slowing demand for properties. Second home prices have surged. Mortgage rates climbed to today’s rate of 7.5%. Since the first week of January, when rates averaged a little lower than 3.0%, mortgage payments have become increasingly unaffordable. Second-home buyers face even greater costs than those recent increases. The federal government increased loan fees for second homes on April 1. For a typical buyer that means an about $13,500 added to the cost of buying a $400,000 home.
Existing-home sales are down for the fourth consecutive month in May, according to the National Association of Realtors®. Total existing-home sales, transactions that include single-family homes, fell 3.4% from April. Year-over-year, sales are down 8.6% according to the National Association of REALTORS (NAR). "Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance," said NAR Chief Economist Lawrence Yun. "Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions." "Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year," Yun added.
The Consumer Confidence Index® decreased in June, following a decline in May. The Index fell to 98.7 down 4.5 points from 103.2 in May—and now stands at its lowest level since February 2021. “Consumer confidence fell for a second consecutive month in June,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices. “Purchasing intentions for cars, homes, and major appliances held relatively steady—but intentions have cooled since the start of the year and this trend is likely to continue as the Fed aggressively raises interest rates to tame inflation. Meanwhile, vacation plans softened further as rising prices took their toll. Looking ahead over the next six months, consumer spending and economic growth are likely to continue facing strong headwinds from further inflation and rate hikes.”
Mortgage rates have increased sharply; a local lender is quoting 7.514% interest on a 30 year second-home mortgage and 5.985% for a primary home. The same time last year that rate was 2.875% interest on a 30-year mortgage. Again, rising prices and increased mortgage rates have forced potential buyers to rethink their need to buy a second home.
The cost of homeowner’s insurance has also increased. First, in June the Department of Insurance approved a rate increase averaging 7.9% in the state of North Carolina. The second cause driving rising premiums is inflation. A homeowner needing to rebuild will incur a much higher cost. The cost of materials and labor are rising and there are supply chain issues. COVID impacted everything.
Our inventory of quality homes in the Lake Gaston market continues to be low. Now is a good time to list your home if you have been thinking of selling. List your home before the market cools off more. Contact a full-time, REALTOR® with working knowledge of the Lake Gaston market. Ask them to provide written data on properties sold and listed in this area. When listing your property, price it according to comparable ones on the market. Remember, buyers’ frown at time wasted looking at overpriced properties. Overpriced properties sit on the market and become stale. Eventually selling at a lower price because of a wrong listing price at the start.
More people are enjoying the Lake Gaston area. We see growth in both residential and commercial development. Lake Gaston Realtors love helping people find their dream home or business at the lake!
Barney Watson is the owner of Lake Gaston Real Estate, LLC and he is Director for the Roanoke Valley Lake Gaston Board of REALTORS®. His cell is 252-532-3274 and website is www.lakegastonrealestate.com.
In the first three months of 2022 our total closed sales, land and homes, have totaled $54,086,316, an increase of 8.36%, compared to the $49,911,478 over the same three months of 2021. This year, our first quarter closed sales on waterfront homes are up 9.22% (in dollar sales), compared to the same period last year. We have closed 52 this year compared to 59 last year. The average sold price of waterfront homes in 2022 was $804,546, an increase of 23.92% over the same period in 2021. The median sold price of waterfront homes for the first three months was $727,500 compared to $570,000 in 2021, an increase of 27.63%. The median days on market for waterfront homes for the first quarter was 7. Offshore homes sales (in dollars) have also increased 66.70% this year compared to last year. The average sold price of offshore homes for the first quarter of 2021 was $243,015. The average sold price of offshore homes for the first quarter of 2022 was $243,015 vs. $178,170 for the same period last year, an increase of 36.4%. We closed on 33 offshore homes this year. Waterfront lot sales (in dollars) were down 46.59% from last year. All sales numbers are from the Roanoke Valley Lake Gaston Board of REALTORS® MLS and do not reflect private sales.
Across the country, The National Association of REALTORS® (NAR) reports “Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, sank 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. Year-over-year, sales decreased 2.4% (6.17 million in February 2021).”
"Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases," said Lawrence Yun, NAR's chief economist. "Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate. “Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties." The median existing home price for all housing types in February was $357,300, up 15.0% from February 2021 ($310,600).”
"Pending transactions diminished by 5.4% in February mainly due to the low number of homes for sale," said Lawrence Yun, NAR's chief economist. "Buyer demand is still intense, but it's as simple as ‘one cannot buy what is not for sale.'"
Our inventory of quality homes in the Lake Gaston market is also at record lows. A recent blog by the Virginia Association of REALTORS stated available inventory was down 50% from a year ago and 66% from five years ago. I believe our market is no different.
Today, a local lender is quoting 5.875% interest on a 30-year mortgage on second homes. Last April that 30-year rate was 2.875%. It is the first time since February 2011 that thirty-year mortgage rates have reached the 5% mark. Mortgage rates now stand 3 percentage points higher than they were during the popular spring home-buying season in 2021.
As if the 3-point increase in mortgage rates are not enough: effective April 1, 2022, added up-front fees for mortgage loans on second homes will be between 1.125% and 3.875%. Fees will vary based on the loan-to-value ratio. For example: A $300,000-second home mortgage with loan-to-value ratio of 65%, acquired by Fannie Mae or Freddie will pay an extra fee of $4,875. A large percentage of loans are Fannie Mae or Freddie Mac.
The cost of building materials continues to climb. Building materials prices increased 20.4%, year-over-year, and have risen 31.3% since January 2020. Ready-mix concrete has been volatile since mid-2020 and has climbed 8.2%, year-over-year. Gypsum (sheet rock) products prices are up 20.7%, year-over-year. Framing lumber prices have increased 79.5%. Over the last 12-month period the prices of exterior and interior paint increased 30.3% and 21.2%, respectively. Appliances to equip new homes are more expensive and sometimes scarce.
“The annual inflation rate for the United States is 8.5% for the 12 months ended March 2022 — the highest since December 1981 and after rising 7.9% previously, according to U.S. Labor Department”. Inflation costs the average US household almost $300 more a month. “The price of gasoline increased 48.0% in the 12 months ended March compared to the 38.0% annual increase in February, according to the most recent inflation data published April 12, 2022, by the U.S. Labor Department’s Bureau of Labor Statistics”.
Will increased mortgage rates and fees combined with record inflation and gas prices hurt second-home sales here at Lake Gaston? Great question.
If you’ve been thinking of selling your Lake Gaston property, wait no longer! The shortage of inventory has persuaded potential buyers to buy their lake homes sooner. A full-time REALTOR®, who provides written data and gives you a correct value of your home is important.
Barney Watson is Owner / REALTOR of Lake Gaston Real Estate LLC and a Director for the Roanoke Valley Lake Gaston Board of REALTORS®. His cell is 252-532-3274 and website is https://lakegastonrealestate.com/
What an unusual year 2021 was. Waterfront home listings were scarce with prices rising. Economics 101, supply and demand. Supply is low and demand is high driving prices higher.
In 2021 Lake Gaston Realtors closed 268 waterfront home transactions, averaging $685,552 each. Totaling $183,727,816 or an increase of 3.80 percent in dollar sales over 2020 sales. Our average waterfront home listing price was $680,713 at time of contract. The average selling price was 100.71 percent of the asking price. Unit sales of waterfront homes was down 17.79 percent from 2020 because of lack of inventory. Offshore homes showed an increase of 1.23 percent over 2020 sales with 129 closed, averaging $179,904 each, totaling $22,621,597. Waterfront lot sales were also up with 137 sold, compared to 115 last year, averaging $198,027 each, totaling $25,445,850, that’s up 20.90 percent. Offshore lot sales also improved with an increase of 114.46 percent from 2020 levels averaging $20,518 each. Total homes and land (lots) all firms all around the lake closed 663 transactions compared to 688 in 2020. Totaling a record dollar amount of $243,540,808, an increase of 9.09 percent above the same period in 2020. Sales numbers are from the Roanoke Valley Lake Gaston Board of REALTORS® Multiple Listing Service (MLS) and do not include private sales.
The median sales price for waterfront homes in 2021 was $605,000 which sold for 101.34 percent of asking price. This was a 19.92 percent increase in sales price over 2020. The median price for offshore homes was $173,900, selling for 97.21 percent of asking price. This was a 24.26% increase in sales price over 2020. The median price of waterfront and offshore lots has remained flat with 2020 levels.
The increase in sales with lack of available inventory also brought an increase in sales prices. Sales of waterfront homes, which closed below $500,000, was down 49.1 percent over 2020 sales. Sales of waterfront homes, which closed between $501,000 and $800,000, was down 12.6 percent. Sales of waterfront homes, which closed between $801,000 and $1M, was up 18.5% percent. Waterfront home sales for $1M and up increased 300.0 percent. The most expensive waterfront home sold on Lake Gaston was $2.9M. Waterfront homes sold over the asking price in 2021 totaled 118. That is 44.0 percent of the total sold, compared to 80 in 2020 which was 24.6 percent of the total sold.
“Consumer confidence declined this month as rising inflation, and the highly-contagious omicron variant of the coronavirus, dinged the optimism of Americans. The Conference Board said Tuesday that its consumer confidence index — which takes into account consumers’ assessment of current conditions and their outlook for the future — fell to 113.8 in January, from 115.2 in December. Even with the decline, consumer confidence remains high in the U.S. despite surging prices for just about everything. Earlier this month, the Labor Department reported that inflation rose at its fastest pace in nearly 40 years in December, a 7% spike.”
“Prices rose sharply in 2021 for cars, gas, food and furniture but that has not hindered the U.S. consumer. The proportion of people planning to purchase homes, automobiles, and major appliances over the next six months all increased, the Conference Board said.”
National Association of REALTORS® (NAR) reports existing-home sales declined in December, snapping a streak of three straight months of gains, with sales falling in each of the four regions of the U.S. Despite the drop in December, year-over-year sales for 2021 were up 8.5%. NAR also reports pending homes sales are down 2.7% year over year in 2021. "There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability."
The median existing-home price for single-family homes across the country was $364,300, up 16.1 percent from a year ago. Housing inventory across the country was down 22 percent from a year ago, days on market continues to be low in most areas.
NAR also predicts a strong year in 2022. “The housing market was doing well at the turn of the year and may normalize, said Lawrence Yun, chief economist at the National Association of Realtors. All markets are seeing strong conditions, and home sales are the best they have been in 15 years, Yun said. The housing sector’s success will continue, but I don’t expect [2022’s] performance to exceed [2021’s]. He said sales may decline this year but predicts that they will exceed pre-pandemic levels. His forecast is based on an expectation of more inventory in the coming months. With more housing inventory to hit the market, the intense multiple offers will start to ease, Yun said. Home prices will continue to rise but at a slower pace. Yun projects that mortgage rates will increase to 3.7 percent in 2022, pushed up by persistently higher inflation.”
Mortgage interest rates remain at low levels, 3.50 percent for a 30-year fixed rate mortgage and 2.50 percent for a 15-year fixed rate mortgage. Both rates have increased by just under a full percentage point from a year ago. Rates are expected to rise slightly through the end of the year.
Available waterfront home inventory remains at an all-time low. In 2021 we had 262 new waterfront home listings become available as compared to 328 in 2020, a 20.2 percent decline. But, in 2021 we sold 268 waterfront homes vs. 326 in 2020.
Have you been thinking about selling your home? There are potential buyers looking for waterfront homes, priced right and in good condition. Do not miss a great time to sell. The shortage of inventory has persuaded potential buyers to buy their lake homes sooner. “Spruce up” your home and get it listed right away! A full-time REALTOR®, who provides written data and gives you a correct value of your home is important.