Hello everyone and Welcome once again to
another episode of Selling Greenville I
am your host as always Stan McCune realtor
right here in Greenville South Carolina
and today we are going to be talking
about a concept that is a very
buzzwordy concept but that we need to
discuss it's housing affordability and
there's a lot of discussion a lot of
debate about housing affordability and
it's really important that we kind of
cut through all of that and discuss
practically what the housing
affordability situation in the upstate
of South Carolina is and what to expect
moving forward and we have some local
elections coming up that will directly
impact housing affordability in our area
area and and we need to discuss that as
well so that everyone is fully
educated everyone fully understands what
is going on when it comes to this
issue before we Dive Right In as always
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estate situation if you or someone that
you know needs to buy or sell a house
let me know all right so housing
affordability this is of course a
topic that a lot of people are talking
about right now because they can see in
in a lot of places in the US housing is
not getting more affordable it's getting
less
affordable and when we look at the
upstate in particular what do we see
when it comes to housing afford
affability is it more or less
affordable Now versus in the past or
or what is the trend well there are some
statistics that the greater
Greenville Association Realtors
publishes every month we've gone over
some of these numbers before but but we
haven't spent a whole lot of time
focusing on housing affordability but
they track the trend over time for how
affordable housing in the upstate of
South Carolina is and the numbers are
very very interesting and here's how
they're calculating it okay the index
that they use measures housing
affordability for the region U of the
upstate of South Carolina by take
looking at the median household income
and the median priced home and they have
some type of calculation that determines
the percentage of median household
income necessary to qualify for a loan
for normal financing given current
interest rates for a median priced home
so here's what here's the example that
they give it says and this is GJ
statistics it says for example an
index of 120 means the median household
income is
120% of what is necessary to qualify for
the median priced home under prevailing
interest rates a higher number means
greater affordability all right so
it's affordable the the more affordable
the home is the higher the number is so
in in the example they give 120 housing
affordability on their index would
mean that the median household income is
120% of what is necessary to qualify for
a median priced home under prevailing
interest rates so so that's good if
it's if a number is something like that
or higher what's really bad is once you
start getting getting to be near 100 or
if you start going below 100 that's
really bad cuz what that means is now
the median if you go below 100 the
median household income in in the region
is going to be less than what is
necessary in order to buy a median
priced home so at that point housing a
affordability becomes a major major
issue right once you go below 100
so what is the upstate as of really the
past several months What number has it
been at it's been at
101 we are right on the precipice of
falling into the the realm of the
median family and and when we say median
we mean we don't quite mean average we
mean the middle in a sequence of
numbers and the reason why we choose the
middle is because if you choose the
average you'll be skewed by the the
homes that are or the the households and
the homes that are are way way more
expensive or the households that are
producing way way more income than the
rest of the others so median is a little
bit of a more accurate metric in a lot
of ways than taking the
average now all of that in mind we
are like I said about to reach that
point where the median family or you can
think of basically the average family in
the upstate will not be able to get
financing on the average home in the
upstate and that is going to be a
problem how does that compare to the
past so the they track this index
all the way back to 2017 and it has
never been this low okay in in 200
7 it looks like it reached the lowest
point of about looks like about
110 was where the index went down to
I'm just the the numbers aren't very
specific they just show a graph and
it has been steadily decreasing really
since
2013 we we kind of peaked in 2011 and
actually went up to into the
180s and it kind of peaked around
that time time peaked in
2012 and then really since 2013 it's
really been on a steady
decline last year it ended a
little bit over
110 from what I can see here and now we
are down to 101 where basically the
the median household is barely able to
qualify to buy the median home in
this area
so here's the thing right we celebrate
in the upstate that we really have great
appreciation that great appreciation is
driven by the fact that so many people
are moving here from out of state from
other parts of the
state and and so home prices have
have gone up which is great for a lot of
homeowners what's not great is that
housing affordability has has not
risen or or least Flatline so so what
that means is that people's incomes are
not going up as quickly as the prices of
homes are going up and so there's a cost
here to all this appreciation and the
cost hits new home buyers the hardest
it hits people that are trying to
move out of a rental into into a
house the hardest there's a lot
of things that are impacted by this
housing affordability crisis and it
really is a crisis like I said we are we
are nearly at the point where it's going
to drop below 100 and once it does
that's going to really be difficult
for a lot of families to be able to move
into a home that they want to move
into and here's what's tricky about this
right we have people moving into the
area from out of the area and that's
what's driving a lot of this
appreciation and so so there's a lot of
demand for new construction tons of
demand for new construction I hear
people all the time being like you know
my goodness all this new construction in
Fountain Inn Lower
Simpsonville you know the Eastern
edges of of Five Forks
Reedville you know up there towards
Travelers Rest I mean there's all this
new construction going up all over the
place Greer you know even on the west
side of Greer but also on the east side
of Greer all sorts of new
construction going up all over the
place and people have differing opinions
on this but the reality of the situation
there's only one way that we can fix
housing affordability and that is with
more houses at the end of the day that
is how you fix the problem the when
you have more people coming into the
area than you have houses that are
available for them then housing
affordability becomes an issue because
the houses are getting soaked up so
quickly and it drives up the prices and
that's what we're seeing right now we
we're seeing since Co the our
inventory levels have have dropped into
the two-month range which is insane that
that means in two months roughly
speaking all the houses in our area
would be bought up if none came on the
market that is insane I've never seen
that
in my career I've never seen that
prior to my career either I mean when
people say we live in unprecedented
times that that means a lot of things
in real estate there are a lot of ways
that we're living in unprecedented times
from a real estate
standpoint now one of the tricky things
here when we're talking about housing
affordability again we have to balance a
lot of different things right because we
can't just say well let's just throw up
new houses everywhere cuz there are a
lot of other problems right when you put
up new houses in an area new
construction in an area that strains the
local infrastructure and what a lot of
people think about is the roads but it
it strains other things as well
utilities you know local governments
a lot of things end up getting strained
by new houses going up and so we have to
balance all of those things and so
this year we have a lot of County
council elections coming up some other
local elections that are coming up and
you guys need to educate yourself on
what the candidates believe when it
comes to housing affordability
development and all of those things
there are some people in our area that
there a big drbeat of theirs is
housing affordability but they want the
government to be planning everything
they want the government to be
controlling everything and historically
in our our area once the government
starts controlling things then they
start doing things backwards they start
implementing zoning and planning
related laws or they go Rogue and they
skirt the laws and that they put in
place or the guidelines that they put in
place and it ends up being a big mess
they end up making it harder to develop
an area and that ends up again making
housing affordability worse in general
we find that developers they want to
build more houses and as long as
they're allowed to they will and that
will help housing affordability what we
need is for our local government to
support building up the
infrastructure kind of what we've seen
in Five Forks Five Forks has been kind
of a good example of that where they
have done some things to support the
infrastructure that area couldn't
support
the new
construction that we've seen the past
10 years in that area it it would not
have been able to support that 15 years
ago but they did some smart things
they figured out they got ahead of the
curve and that's a really
important aspect to all of this we
need new construction but we need it to
be done in concert with the
infrastructure improving so in my area
where I live in Greer there's a lot of
angst that a local horse farm an
equestrian little equestrian area that
they're trying to sell off part of the
land to a developer and it's on a
road that is you know just a just a
basic one lane on each side I guess you
would call that a two-lane road it it's
it's a small road that it doesn't have
the most amount of traffic but there are
some peak times and and and the road
you know if you add 300 more units in
there or however many they're projecting
to put in there it's going to put
more strain more potholes more issues
with with the roads there you run
into an issue of at some point the
public schools get maxed out so if
you're in a very desirable School
District you might find yourself
redistricted and that could be a
major major problem that can impact your
home value negatively so there is a
fine line and a
major divide between how to address
these things and we need people in
office we need people representing us
that understand this and that are
willing to tow the line to make
development something that is easy
and flexible while
also understanding that there needs to
be things that the government is doing
alongside developers in order to make
sure that areas don't get completely
overwhelmed with new
development an example that I ran
into recently where again you know just
poor in my opinion poor government is
I have a client that did a full
renovation on a house completely
renovated the house in the Parkin
Mill area of Greenville so a nice area
and they put in a driveway that was
conforming to the street it was a a
normaliz driveway it was a small two-car
driveway so you could fit two cars on it
but it wasn't too big there are a lot of
other driveways on the street that had
similar a lot of other houses on the
street that had similar driveways and so
it wasn't like it was something that
stood out like a sore thumb or or
anything like that and we actually
we got the house under contract we
listed it under contract right away and
after we got it under contract mind you
this house you know had been permitted
for the work that they had done and
everything the the you know the city it
was in city limits they had signed off
on everything someone comes around from
the city and determines that the
driveway was too wide and says that they
recently changed an ordinance that used
to apply only to new construction but
now it applies also to not just new
construction but fully renovated homes
okay however you define that I'm sure
they have a a definition but I'm also
sure that they don't follow that
definition all the time fully renovated
homes in that area now require not a 15t
wide driveway like we had there but
it could not exceed 10 ft 10 ft
wide well you go from 15 ft wide to
10 ft wide and now you're talking about
a single car
driveway well that's a big difference
fitting two cars in a driveway versus
only fitting one makes a big difference
and guess what now our buyer that we had
on the house they didn't want to buy the
house and my client you know graciously
let them go because it wasn't their
fault that the city came in and did that
but guess what the the ramifications of
that are going to be we've got that
home under contract again with the
smaller driveway we had to they had to
cut down the driveway what are the
ramifications going to be this is a nrow
Street in the Parkin Mill area there's
going to be more cars parked on the
street now there already are cars being
parked on the street and it's a narrow
Street guess what this whoever lives
there they're going to have at least one
car and if they ever have a second car
or if they have visitors over those cars
are being going to be parked on the
street and now that street is going to
be more cluttered than ever just because
of a simple zoning ordinance
that the city put into place that's
really doesn't impact anything except
Cosmetics it literally only impacts the
Cosmetics of the street the way the
street looks and already that driveway
was conforming to other driveways on the
street so it wasn't like it was
something different than all the other
houses in the area this is the type of
thing that is why a lot of us are
skeptical about the government getting
more power to do things zoning and
planning because they tend to not
make logical decisions and they tend to
not even play by the rules that they
want to play by and so we have to be
careful as the elections are coming up
we want people that are in in our
councils that don't want to overdo all
these zoning and planning and ordinances
that don't want to try to use government
to fix everything because our government
is pretty efficient around here but even
with our local government being
efficient it still has problems there
are still problems when you get other
people telling residents what they
can do with their homes they tend to be
overly restrictive when you give people
more or less unchecked power they tend
to use that power in ways that often
times can be
unbeneficial and at the end of the day
day we
need more houses we need infrastructure
that supports those houses and we need
to try to get this housing affordability
to to change gears and and you know
last time around it the housing
affordability improved only when the
economy got worse well that's not what
we want either we want for as the
economy continues to hopefully improve
we want housing affordability to at
least turn the corner right for at least
the trend to go back up a little bit and
right now in the absence of people
making a whole lot more money than they
currently make right now in the absence
of that the only way that we can improve
housing affordability is if we build
more houses and so that is the task
at hand that is a big thing honestly
this is going to impact people in our
area and a lot of ways a lot more than
the presidential election will so do
some research on the local
elections I have interviewed a lot of
the candidates so I'd be happy to share
my thoughts I might be able I might have
interviewed your candidate in
whatever District you are in if you live
in Greenville I've interviewed
several County
Council people that are running
for for the council this year
and I'd be happy to to share that
knowledge with you privately from what I
glean from that I'm on the realtor
political action committee and that's
one of the things that we do we support
as Realtors we support some
candidates over others try to make sure
that we get people that understand the
the delicate balances here between
housing affordability between
development and infrastructure and all
of these things and so at the end of
the day the more one is educated about
this the better our area will be that's
it short one today if you guys have any
questions please feel free to reach out
and until next time stay safe and let's
buy some houses
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