[Music] Hello everyone and Welcome to another episode of Selling Greenville your favorite podcast about the Greenville real estate market as always I am your host Stan McCune and if you need to reach me for any reason my contact information is in the show notes like it always is you can call me text me email me at any time with information that you find in there and as always I always ask if you love this podcast please go ahead and give us a rating make sure you're subscribed to it you don't need to unsubscribe and then resubscribe I don't ask for my listeners to do any of that just make sure you're subscribed to it that you don't miss any future episodes give us a rating leave us a review if you can that's great I love to see those ratings and those reviews whenever you guys leave them really appreciate it really gives me confidence to keep this podcast going and we are now at episode number 25 I'm recording this on August the 10th I will probably release it a little bit later in this week but I'm really excited episode 25 we have done an episode every week for 25 weeks now that's almost half a year and I'm really excited about that this is some of the stuff that the Corona virus that covid-19 has opened the door for right because I I didn't used to spend as much time in my home office and quite frankly I've had more time this year than normal because there is just less real estate activity even though it's still busy it's not as busy as last year obviously because there are fewer Sellers and that's causing there to be fewer buyers as well and it's giving me a little bit of extra time to work on this podcast which I probably couldn't have done in previous years and I'm really happy about that I'm really happy with how the has gone but we need to talk a little bit more about the market the real estate market what is going on it's it's kind of weird it's kind of crazy for those of you that are tracking stocks and and that that track things like that there's a lot going on in the stock market as well obviously I'm no financial planner no financial adviser but I'm seeing the price of gold and silver go up I'm seeing mortgage interest rates and other interest rates go down there's a lot going on that is concerning a lot of people I'm not going to get into all of that but just know that there there's a lot of uncertainty right now and people are concerned and that is having a ripple effect in the real estate market but I don't exactly know where that's going to go all that I can tell you right now is what I see happening in real estate and where I see real estate probably going down in the future into maybe early or the middle of next year and that's what I want to talk about today so for starters I've already alluded to this but this is literally the weirdest real estate market ever now you'll remember earlier this year we had interest rates plummet because the fed you know the Federal Reserve they dropped interest rates on their end when that happens that usually means mortgage interest rates drop as well well but there was a weird phenomenon that happened at that time and that's that Banks couldn't meet the demand for refinances and for new mortgages when those interest rates dropped so what ended up happening is that Banks actually increased their rates a little bit the rates actually kind of went up in a lot of instances because the banks couldn't handle the the number of applications that they were getting and it's simple economics when demand and outpaces Supply prices go up so even though all by any other standard interest rates should have gone down they actually went up well it seems that banks have figured out you know maybe improved their Staffing or improved their processes or whatever the case may be and interest rates have gone down and they are unbelievably low we are seeing 15-year mortgages down in the low twos like nearly in the high ones we have seen 30-year loans going even on refinances going below 3% into the mid to high twos I mean I never thought that this would happen honestly I never wanted this to happen this is almost scary I don't really know what to make of this exactly but it's great if you are refinancing or or getting a mortgage on a new property so it's in one sense it's never been a better time to buy except from the standpoint that that so fewer people are selling their homes right now the inventory levels are just insane they're hovering around two to three months of inventory which is an unbelievably insane sellers Market and so it's it's weird because it's been like the best time to sell and also one of the best times to buy at the same time but nobody can do either right because people that are selling a lot of them have dropped out of the market for one reason or another they're concerned about the economy they want to hold off they don't you know they don't want to move right now whatever the case may be and those that are looking to buy they don't have hardly anything to look at there is so little inventory so it is unbelievably weird I've never seen anything like this where buyers and sellers are in such a great position to do that to buy or to sell but that so few Buy buyers and sellers are out there because of the meta issues going on with covid perhaps the election year is playing into that a little bit uncertainty about the economy all these different things it's causing people to to do things that they normally wouldn't when it comes to this market and it's really causing a crazy ripple effect now what does that mean practically speaking and and what have I seen practically how this should impact you as a potential real estate player as someone who might be buying or selling a home in the near future all right let me let me talk to my sellers right now okay and this is a conversation that I have with people that are listing their home with me anyway but for those of you that are thinking about selling let me put this bug in your ear okay homes that are sitting on the market that have sat on the market for a while are languishing it's a very interesting thing and I think this has to do with the fact that so many buyers have dropped out of the market now there still appears to be well many more buyers than there are sellers but a lot of buyers have dropped out of the market there's just fewer people doing real estate transactions right now and so what's happening is that the buyers are all jumping on the new listings and when the new listings come up everyone's freaking out and they're like okay I got to get that home I gotta get that home well what happens if that doesn't happen pretty soon in the life cycle life cycle of a listing particularly if it's a an inexpensive listing and so we're talking about like 250 and Below now for now what I've found is for listings that are more expensive 250 and above those are tending to take a little bit longer again because there are probably fewer buyers in that price point right now than there normally are people you know that are trying to sell those homes are having to be a little bit more patient in some ways it's not quite the Feeding Frenzy right on the front end that it has been in the past or that we've been used to the past few years but particularly if you're selling a home below 250 you know and if you start getting into the low 200s the high 100s particularly I mean that home really needs to sell fairly quickly if it languishes on the market if it lingers for several weeks for like a month for 2 months which normally is not that big of a deal right the average house in in Greenville County tends to sell in like 50 or so days and by sell I mean go under contract in like 50 or so days but right now that's a really bad Benchmark to look at if your home has been on the market for 50 or so days it's probably going to be on the market for a while longer and what we're seeing is that people aren't looking at the homes that have been on the market for a while for whatever reason they they have skepticism about those homes they're worried you know they're like well what this home shouldn't have been on the market for this long what's wrong with it and so if you overprice your home then what that means is that your home is not going to get that that benefit from the early listings people aren't going to be excited about it from the get-go and then it's going to be on the market for a while and then when you do finally start to drop your price to where it needs to be you're going to find that you're not going to get the same amount of activity that you did if you had just started by listing it at that price point so you need to list it for the correct price obviously you don't want to underprice it either I see so often in this market and we've talked about this before so I apologize if you've heard this again but or if you're hearing this again from me but so often I see these situations where sellers try to drup bidding wars and in this market because our prices are so cheap it just doesn't work the the price that works in other markets where real estate is a lot more expensive but here in this market and where people are looking for bargains and whatnot it just it doesn't typically work it's best you have to find what the home is worth and price it accordingly not too high not too low but particularly not too high if you price it too low you'll sell it you just won't sell it for as much as you probably could have if you price it too high you're just not going to sell it and you're going to find yourself in a in a bad situation there here's another piece of advice for my buyers all right so that was from my sellers here's for my buyers if you can make this work financially now is the time to find your quote unquote forever home this is something that we we deal with so we've got firsttime home buyers they're typically buying starter homes those first-time home buyers after a few years they typically look to purchase an intermediate home and then a few years after that they find their forever home right this is the this is what we call and what a lot of people refer to when they're talking about the American dream it is this process of of being able to to end up in your forever home the people that are doing really really well right now are the people that are able to make the leap from the starter home directly into their forever home and there are two reasons for that one is that it seems like disproportionately buyers on the top end and I'm using top end pretty generically but let's just say 300,000 and above that is squarely the top end of the market the median home sale in Greenville County or in the in the upstate is around 230 so once we get into 300 and above that's starting to be by Greenville County standards a very nice home and honestly you go to the to the other counties to Spartanburg to aone Anderson I mean you're talking about a really real you could get like a mansion in Anderson for for $300,000 but there are a lot more buyers at that price point that have dropped out than the buyers in the low 200s that have dropped out so you have much less competition to deal with for a home that is say 300 $50,000 than you would have in the past and if you're looking to make an intermediary type of home purchase and you're maybe going from a home that you bought a few years ago for like 150,000 and now you're looking to jump up to a home that's like 225,000 or 230,000 or whatever the case may be you're going to find that there is still quite a bit of competition that you're dealing with tons of bidding wars which we'll get to in a second but tons of competition at that price point if you can make the leap to that forever home to that home and and obviously that might look different to different people but that you know maybe that 325 350 $375,000 home if you can find a way to make the numbers work you will find that there is much less competition you can probably get the seller to to come down on the price in certain situations you will you will find that you're much less likely to get into bidding wars it is a much more enjoyable and and and successful route to go in that way and there's another big benefit as well right right now interest rates we just talked about they're in like the tubes okay not that long ago they were in the sixes and the fives and you know just basically like a year ago they were in the fours for a lot of people so interest rates are going to go up listen they are going to go up and probably in a few years they will be double what they are now it's going to be a big gut punch to a lot of people that right now they buy you know that intermediate home for 200 something thousand at a you know 2.75% interest rate and then when they're ready to to make the next jump into their forever home in a few years a that that forever home will have appreciated so instead of it being a $325,000 home now it's a $380,000 home but also your interest rate your mortgage interest rate it's likely it's going to be like 5% or something like that like rates are going to go up that is going to happen at some point and that's going to be a major gut punch to go from oh man I've got such a sweet deal on this house and I don't want to give this house up and I don't want to you know surrender this mortgage but I've got to sell this house in order to to make the next move how am I going to do this if you can cut out that intermediate home and I not know not everyone can but if you can do that you will set yourself up for the future in a really really good way you will have a mortgage interest rate that 15 years from now people will be astonished by people will be like wait what's your interest rate how did you possibly pull that off and you'll just be laughing and it's like well I made a good financial decision back in 2020 so that's some advice that I'm giving to to my buyers for those that are investors obviously it's a great time to purchase Buy and Hold properties for the same reason interest rates are really low now they're not as low for investment properties as they are for owner occupied properties of course but but it's still a really great time to buy rental properties Buy and Hold properties of of any kind not a great time to buy commercial there's a lot of uncertainty with commercial I'm not a commercial realtor so that's not my area of expertise but from talking to people there's a lot of uncertainty in that market right now so I'm I'm very leery of that market but in terms of rental properties really we're running into the same thing we do with with any purchases is that there's not a lot of inventory out there but if you can find the right option get it under contract get that low interest rate you're set up for the future in a very very good way it you know as far as like flipping properties go because I get this question a lot I've got a lot of clients that flip properties I flip properties myself from time to time that's a challenging Market there is particularly the past like three to four weeks the opportunities on properties that could potentially be flipped has gone down way way far there is just not hardly anything out there to flip and so if you trying to flip you definitely have to be creative right now this is just it's just challenging in a lot of ways right now for the flippers I'm actually seriously considering getting into direct marketing trying to Market directly to potential sellers myself because we just don't have enough Supply to meet the demand for those that are wanting to to do that type of thing for those that are wanting to rehab houses so I'll keep you guys more in the loop on that but that is something to keep in mind if you're an investor buyer now again again for for buyers I I caution sellers to be too bullish on this but for buyers bidding wars are just the way it is right now particularly again if you're in that sweet spot that below 250 price point bidding wars are just the norm right now and I don't see that changing unless the economy shifts right unless we see a major downturn in the economy thus far the economy seems like it's been pretty resilient it's been mostly low wage earners that people in retail and brick and mortar that have been hit the hardest by covid-19 and I hate that for them but generally that that means that the economy is is still doing okay it could do a lot better obviously but unless it really starts to get to the point where those you know middle level management type of people are starting to get laid off or where you know companies that aren't brick-and mortar type of establishments are really starting to do Mass layoffs I don't see a major economic shift happening just my personal opinion so so forbidding Wars you kind of have to just get used to that and you kind of have to plan accordingly and what I tell a lot of my clients listen you need to just ignore the list price in a lot of situations the list price helps you to kind of get a sense of what the seller is thinking but I mean I just saw a house just I think it was just today just today or maybe it was yesterday it was a duplex that the price dropped from $400,000 get this to $275,000 so that's an instance of a seller that was just they found an agent that was that agent was probably like oh yeah I'll definitely list this this for $400,000 and see what happens and obviously who on Earth unless unless this is the world's nicest duplex at least for this area nobody's going to buy that for $400,000 I'm sorry there isn't a market for that in Greenville County and you just in a situation like that like obviously that was an anomaly but most people they they list a property for roundabout what they think it's worth but you as a buyer you need to be thinking about what is this property Worth to me and don't get fixated on the list price right don't get you know if if it's listed for what seems like a great deal probably there's going to be a lot of other people bidding on that property there's going to be a lot of offers on that property and you need to be thinking in from the standpoint of what is this property Worth to me it might be listed for 200,000 but but what if that property came on the market for 230 would you have been interested in it at that point well if the answer is yes then you might want to offer 230 and in that case I recommend to my clients to offer escalating offers that allow them to not lead with the 230 but allows them to go up to 230 if the seller can provide proof of a competing offer that was close to that price point that's something that we've talked about in the past but there are some tricks that you can do with some of that on the flip side if a property is listed for too high then yeah you can offer what it's worth to you that's lower than the list price just understand right now that a lot of sellers are a little bit I don't want to say delusional but like I said that one that listed that duplex for $400,000 you know they weren't being serious about selling it for $400,000 they just wanted to see what the market said obviously the market said heck no and now they just dropped it by $125,000 but understand that when a house gets first listed if you want to come in there with an offer that's 10% below what it's listed as you're not going to get that offer accepted like yeah I'll write it for you I I'll I'll represent my buyer clients however it best serves them but the likelihood unless your offer is just sweet cash you know basically no contingencies very quick closing the likelihood that that offer will be accepted well below what it was just listed at it's not very likely now if the home's been on the market for a while then you have more of a likelihood that the seller will consider a lower offer but right now it is a sellers Market sellers are testing the waters with how high can I go and the result is that they want to kind of let a listing sit for a little bit before they're willing to entertain those lowball offers but the the bottom line is when you see the Le the list price that's not necessarily the best the best offer that the seller is getting isn't not isn't necessarily that list price it might be well above that list price and there is no way to know a good Agent almost always will never reveal to other potential poal buyers what type of offers they've gotten they might give little hints but you're as an as a realtor you're not supposed to reveal a whole lot of information without the seller's approval and most sellers you know don't want that information to be revealed obviously and so that's we're a little bit in the dark when there's multiple offers on what those offers look like you need to to figure out what offer you are happy with and and I and again I say think about at what price you would be like what you know top price you would be like you know what okay I'm still I'm still happy about this this is still a good deal for me that is the price you need to be thinking about in your mind it might be 200,000 it might be 215,000 230 240 whatever the case may be but that's where you need to to plant your flag and make sure that you don't have buyers remorse right don't don't go crazy and then in the end be like man I overspent for that I don't I very rarely have that happen with my clients because I talk them through all the different options and I and I try to structure the contract in such a way that they get the best price possible but I hear a lot of stories of buyers that have buyers remorse because they just they just LED with with too much money and they afterwards think you know what I probably didn't have to do that that's something to keep in mind as well less with regard to purchasing or selling or whatever real estate and obviously this doesn't help me at all when typically when my clients do this or when people I know do this but you might consider refinancing right now right obviously and I'm not going to spend a lot of time on this I have done three refinances this year well I'm actually in the process of my third hopefully that closing will be at the end of this this week but on my properties I'm working on my third refinance this is listen a great time to refinance it's taken a while though because banks are obviously not prioritizing the refinances they're prioritizing the new home purchases to have more of a deadline but refinancing can get a lower interest rate if you want to do a Cash out refinance let's say you have a lot of equity in your home let's say that you know your home is worth 300,000 but you only owe $150,000 on the house you can do what's called a Cash out refinance take that Equity so you you have $150,000 of equity in the home you can probably get 100,000 or more of that basically the bank to write you a check at closing and you're basically re- getting a new mortgage on the total value which is now $300,000 maybe 80% of that value and now you're in a situation where the bank is paying you so it's as if you're purchasing the home at 300,000 and getting you know a loan with a 20% down payment that's the way it is in the eyes of the bank but the bank is literally writing you a check and then you can go take that money and hopefully use it wisely maybe use use that money to do some house updates that you've been neglecting for a while and you will be starting over in terms of your mortgage but in some cases I had I did a Cash out refinance recently that because the the interest rates are so low my mortgage didn't go up that much which is crazy it's crazy to think about right I I got a lot of money at closing and my monthly mortgage did not go up very much because of the way rates are right now so it's it's a it's a great Market to do a refinance can obviously also do a home equity line of credit that's kind of a different way of skinning that cat you keep your mortgage that you already have so you know maybe you you already have a great rate and you're not really able to refinance down to a better rate but you might have enough equity that you can get a home equity line of credit it's basically like having a credit card against your home but you can take that money out at any time for any reason and you can pay it back off at any time for any reason and that just stays there and you can use it at any time I've used I've done both of these at different times for various reasons and they've both been very helpful very effective for me for different things now looking forward to the future what's going to happen in the future as far as as as far as the market is concerned con ered well I don't know for sure but when Co ends and when the election season is over and by the way it is going to be a season there is not going to be an election night this year everyone should be prepared for that there's going to be mailin voting it's going to take weeks to tally up there's going to be all kinds of controversy just get yourself ready for that we don't know how that's going to impact the markets but regardless after all of this is in the rear viiew mirror I think that the market is going to erupt in some way I'm not exactly sure how but if I had to guess I would guess it's going to erupt in the way that a bunch of people are going to enter the market all at the same time most likely people that are wanting to sell and to buy so we're going to have a glut of new homes come on the market all at the same time and simultaneously some of those people will also be buyers I think you know when that happens it'll probably flip a little bit more to a buyer's market but I don't know the ju I the way I see it it seems like supply is getting real in in the real estate market is getting pent up you know all these people that would normally be selling right now they're not I have to think that at some point they're all going to decide that it's time to sell and and that's probably going to happen sometime next year maybe at some point they have a safe vaccine that people are taking for covid and we get that under control I would think at that point I I just don't see the market staying the way it is right now I think it's going to shift at some point but it seems like it's going to take you know for us to get past all this covid nonsense for that to happen and that seems like it's not going to be probably until what maybe spring of next year I think the current conditions that we have are most likely to continue for a while because even you know the most optimistic thoughts that are out there about a covid vaccine or that there could be one by the end of this year but the thing is that they're rushing it and I'm no expert on this by any stretch of the imagination but I've done enough research that it seems like they're they're kind of rushing through the clinical trials and whatnot normally it would take longer than than just a few months for them to get a a brand new vaccine to Market and what's going to happen is the there's going to be a lot of early adapters to the vaccination that are going to be kind of almost like an extension of the clinical trial and a lot of people won't be willing to to take that first vaccine even people that are normally vaccine positive and so that it's going to take a while before people are really comfortable with taking a possible covid vaccine it's probably going to continue to take a while before you really get this under control probably the best case scenario is if we get this herd immunity thing which we don't know if that really happens with Co or not but that would be the best case scenario maybe that could happen by the end of the year but I'm tentatively planning for the market to really shift in the spring because I think that that is when we'll have the election nonsense over with hopefully will have co under a little bit more under control hopefully the economy will have rebounded by then and then spring is normally the time here in Greenville you get to the months of April May June that's when the real estate market usually really heats up around here and I think it is going to be nuts in 2021 and probably it's going to shift a little bit more in the buyer Direction at that time but that's going to be to to the downfall so to speak in some ways to sellers right now it's a great market for a lot of sellers unless you're selling homes that are that are more expensive so that's a lot to consider that's just conjecture I don't know for a fact that that's what's going to happen but that's my best guess regardless that is what we're seeing or that is at least what I'm seeing in the market right now it is a weird and wild Market but I'm just thankful for for the clients that I have for the business that I've had this year it's going to be down for pretty much everyone but that's okay you know what we are able to weather this storm and hopefully everyone is being patient as they wait for the right home to come on the market and as they wait for things to to kind of settle down a little bit but if you need help with anything in real estate or you know someone that does please reach out to me again my contact information is in the show notes and until next time stay safe and have a little fun with the last week or two of the summer [Music]