[Music] Hello everyone and Welcome to another episode of Selling Greenville your favorite real estate podcast located right here in Greenville South Carolina I'm your host as always Stan McCune and today we are going to be giving you a little market update I haven't done one of these in a few months but I think it's time that we finally do one but before before we jump right into what's going on in the market here in the upstate just a quick reminder if you like the show please go ahead and subscribe give us a rating give us a review make sure that as many people as can possibly see it are able to see that people are actually listening to this and we do get listens believe it or not you're not the only person we get several listens every week and I would just appreciate if you guys could go ahead and and rate to review it and my contact information as always is in the show notes should you need to contact me for any reason should you need to buy or sell a house or know someone that would like to buy or sell a house in the upstate of South Carolina I would be more than happy to talk to any of you please let me know all right so we are going to be talking about the greater Greenville Association of Realtors statistics that were recently released for the month of August they always release them about the second week of the month to cover the statistics for the previous month and I always need to warn that these statistics even though they wait a couple of weeks to release them often times they will be updated in in future months so these are not always particularly for the previous months so the year-to DAT statistics can can sometimes be the most helpful thing looking back a few months can be helpful sometimes the prior month which in this case would be August is not always the most accurate cuz sometimes they go back in and get better data and then update you know that month in future months but for now we're going to work with the statistics that we have with the data that we have and I think you're going to find some very interesting things that have come about in recent months since our last time that we did a market update so let's Jump Right In and discuss what is going on we're going to start right at the top the very first page that kind of digs into the data in the GG Market statistics is dealing with new listings now if you've been following this podcast at all you know that we had a major dip in new listings that happened during the worst part of covid April and May and June we all down months here in terms of new listings and that has really created a major supply problem a major inventory problem but the good news is that in July the listings went up year on year July 2020 versus July 2019 it went up actually 2.2% so we had a little bit of a rebound some of those sellers that maybe dropped out in April May or June came back in in July and kind of offset things a little bit and so we had a little bit of an increase but unfortunately we went back down in August we're back Down August 2020 versus 2019 again this might be a little bit low it's it's hard to say because they might come in and change just later on as they get better data but at the moment it's showing a dip 5.4% August 2020 versus 2019 that could be from a of things if I had to guess I would guess it's probably driven a lot by people changing their Lifestyles or not knowing how their lifestyles are going to change due to covid impacting schools and due to different schools responses to the Corona virus so U that's my best guess as to what's happening there now despite having this is where this information gets kind of interesting despite having all of these dips in new listings we actually only have on average for 20 for the past 12 months versus the previous 12 months prior to that only a decrease in average listings of 1.5% so that's pretty tremendous considering May was down 24% April was down 177% the fact that we only have a 1.5% dip is kind of surprising again this that's on average for the past 12 months versus the previous 12 months prior to that now I would just like to mention that up basically since what 2012 we've seen an increase in listings every year and that should happen because as we grow as a community as there's more homes being built and whatnot more people are moving here we should see more listings every year so it's not good that there's a decrease in listings of 1 and a half% there should we should see every year that listings continue to go up but I just found it interesting that despite the dramatic decrease in the spring which is normally our busy season around here we still haven't had as much of a decrease as you might expect however this is where we run into issues with inventory because we have had a decrease for the past 12 months but when you look at the average pending sales over the past 12 months those are up. 7% so pending sales is defined as a count of properties on which offers have been accepted in a given month so those are up 7% and more significantly closed sales on average for the past 12 months are up 6.9% so here we have fewer listings on average 1.5% fewer but almost 7% more closed sales and then 7% higher rate of pending sales and so this is what is really driving the market right now because this is what I I keep saying we have an issue with inventory which to State another way we have a lot less Supply than we have demand and that is borne out in the numbers here we have way more people looking to buy homes right now at least that's what it appears more people looking to buy than we have people trying to sell right now and that's creating a problem that's creating a kind of the worst form of sellers Market a sellers Market not driven by so much by crazy demand but a seller's market driven by very low Supply as a realtor I hate to see that that means closings you know for for a lot of us are going to be lower this year but that's just the way it is and and we just all have to push through it now what's interesting is when you look at the pending sales we had in May and June they went up year on year actually June for pending sales went up 21.7% so what we what happened is we had kind of a bottleneck that the that covid caused and then once people kind of got more comfortable realized that it wasn't quite as serious of of a health issue for the majority of the population as was originally reported or originally thought for a lot of people then they came back into the market and so in June we saw a big despite a few months of pending sales going down in June we saw a big 21.7% increase but then in July it went back down pending sales went back down a little bit 2.2% less yearyear versus 2019 June July and then I'm interested if this is an anomaly I'm interested if this will hold up in future months but August pending sales according to the GG was down 50.5% year on-year down in the levels that we normally see reserved for December I'm not sure that I buy that I I think that they're going to come back in and that that's going to be changed so that it's not nearly that dramatic of of a decrease but we'll see if that is the case then that means we are in for a very very slow fall season of real estate that means that we're going to have Bas basically that would indicate that a lot of buyers are dropping out and not just the sellers and honestly I could see that that could 100% be the case if we find that a lot of people are just deciding that they're not going to move in the fall that there's too much uncertainty too much life change happening and they drop out of the market altogether I'm hoping that's not the case I I'll be surprised if that's the case because I've seen usually these dramatic decreases that happen in gjr usually they end up getting changed in future months once they get better data but that's what we're seeing so far but I will wait I will wait to see for sure what happens here next month we'll see if if they redact that I'll believe it when I see it let me say it that way but you know here's the thing is at the end of the day if that is the case if we have that many buyers dropping out of the market we're going to see a complete reversal in the market we're going to see this shift it could shift very quickly from a seller's market to a buyer Market I don't expect that to happen again but that could be what we're seeing if this data is accurate and when we look at the inventory levels so we I'm trying to pull up here inventory here we go month supply of inventory we do see an uptick in August so it's very possible again this could be redacted but we had from May through July three months in a row I've never seen this in all of the data that we have in gjr going back to 2007 this has never happened to have one month like this but we had three straight of months with inventory levels in the two below three months basically it was 2.9 in May 2.6 in June 2.7 in July that is those are inventory levels that nobody wants to see that means that if basically well I'll just read what ggr says the inventory of homes for sale at the end of of a given month divided by the average monthly pending sales from the last 12 months maybe a simpler way of thinking about it is no homes came on on the market in July no new homes all the homes on the market in July based on averages would sell up in 2.7 months that's a crazy crazy sellers Market Market we like to see those numbers to be honestly I would like to see them more in like the four and a half maybe even five range that's still a sell's market but it's a lot better for the buyer you get up into six seven8 month range that's what we would consider to be a buyer Market we haven't seen that it it above six since oh what 2015 looking at the data here 2014 was the last time that we saw inventory levels in the six range back in the recession it peaked in 2011 almost 14 months of inventory so to give you a little bit of of background when we see levels in the 2.6 2.7 range it's unprecedented that's that's not great that's not that's not something that any of us want to see unless you're of course selling a home and you're not looking to buy then then that's great you know this is this is the time to has been the time to sell a home however they're reporting that August went back up to 3.4 so that's very that's very interesting now again often times these get redacted and what I found with the with the months of inventory is that oftentimes future in future months they'll redact the older months to make them a little bit lower but currently they're reporting that August went to 3.4 months of inventory versus July at 2.7 now again that's still low that that's extremely low August of 2019 was 3.6 so we're still having major inventory shortages but there's a possibility we may be seeing a bit of a bounceback here that again is not the kind of bounceback that we want to see because it's a bounceback not driven by more Supply now potentially by less demand and so again it's possible that we may just be seeing the market just Contracting here at the end of the year it's hard to know for sure we're still kind of weighing what's happening you know here in the fall this year for me my fall looks to be pretty busy but I know that it's not that way for everyone so we'll just have to to wait and see EX exactly what happens my hunch is that we're going to still see it to be pretty comparable to what we have had in the past few months I think just based on what I've seen out there I mean most of my clients that I have they don't even want to wear masks they're not worried about covid I don't think that people are too concerned about Co I think what people are mostly worried about right now is the potential for career changes or for their careers to be impacted by covid or what's happening with their schools and schools are in this area a lot of them are starting to make plans for kind of going back to normal and and we're starting and and I think that that's what we'll see I think that in a few months we'll start to see a lot more schools implementing more days in the classroom and maybe even full weeks in the classroom and and so as that happens once people are more assured that they can just have their normal life back I think that we'll see real estate bounce back to more normal levels but again it's a weird year and we don't know exactly what's going to happen so we'll have to wait and see so what does all this mean what does all this information mean practically well the first thing that stands out to me and we've talked about this when inventory levels are low when you have more demand then you have Supply when you have more buyers than you have sellers that drives the price up because it's a sellers market and that is exactly what has happened we have seen for the very first time again we're we're just setting all kinds of Records here in 2020 and again this is good for sellers bad for buyers we're seeing for the very first time the median sales price for August broke the 240,000 mark so the mediprice being the middle price basically if if you look at every single transaction every single closing you look at the middle price well I'll just Define it as ggr says the point at which half of the sales sold more and half sold for Less not accounting for seller concessions again so this doesn't account for closing costs that the seller might pay of the of the buyer closing costs but basically the middle number you take all the closings you just look at what's the number right in the middle that got up to 240 and that's really even more accurate than the average sales price for determining kind of what the average is in this area and what's crazy about that number is that that's up almost 10% versus August of 2019 that's the biggest increase that we've seen in a very long time I don't remember the last time we we had a an increase year on-year of nearly 10% you'd probably have to go back to oh man I don't know I I I'd have to analyze the data a little bit more because they don't make it very it's it's hard to read these graphs but the the main point is that August of 2020 up to 240 for the medium price point and that's nearly a 10% increase versus August of 2019 which was 220 so the prices are up and that's also reflected in the average price as well the average price went up to if you're more of an average person that went up to 290 which is a 13.6% increase versus August of 2019 which was 255 so that's obviously driven what what's that big gap between the average and the median with the median being 240 the average being 290 really the main thing is happening there is we're having a big increase on homes that are $300,000 and above and so if you look at this data it says that August of this year had an increase of 20% on ver year on-ear on houses priced at 300,000 and above so that is causing the average price to go up a 20% increase on on a 300 and above $1,000 home is a really significant increase year on-ear and so that's driving our average price to go way up as well even outpacing the mediprice point which is interesting and it's also worth noting here again the percentage of list price received which is a bit of a of a deceiving number because it doesn't account for times that the price has been dropped it doesn't account for seller concessions such as if the seller pays for a warranty for the buyer or if the seller pays for buyer's closing costs things like that but that being said tracking it over time can be helpful and tracking it over time again a new record this is the highest it's ever been since GG has tracked it 98.7 % so if a home is on the market generally speaking if it's if it's priced correctly let me say it that way if it's priced correctly and you don't account for seller concessions the seller will get roughly 98.7% of what they have it listed for so that's a great again a great number of your seller that's a record for the upstate for the Greenville Association of Realtors if you're a buyer you have to be aggressive this is not the time to say you know what I I want the seller to to give me this I want the seller to give me that M no no no this is not the market to do that the buyer has very little leverage obviously if you're not in a situation in a position of desperation then yeah try to try to get what's best for you and and maybe hold out and put in a few offers until is accepted but if you're if you find a house you really like and you really want to get that house you've got to come in hot and heavy with that offer I true story I had a house that I had listed earlier this year and we had to take it down from the market for a variety of thing for a variety of reasons and I just relisted it this past week when I listed at the first go around several months ago which was right around the time of Co like right around when Co was first beginning we had decent bit of activity great house decent bit of activity and you know a few offers that weren't that great one of them that was eventually within about $5,000 of what we had it listed for $5,000 lower than what we had it listed for and at that point we went under contract with that offer that was by far the best offer that that we received this go around and of course that contract fell through and and then we had to take it off the market for a little bit this go around having it listed we had multiple full price offers on the home so that was a very interesting A Tale of Two markets just how much the market has shifted people were when that home went on the market people were going crazy my phone was lighting up I I had to work through the holiday weekend with Labor Day I worked Friday Saturday Sunday Monday I mean I I didn't get a single day off Labor Day weekend it was crazy but that's the way the market is right now and sellers are getting if again if the home is priced correctly sellers are getting basically what they're asking for right now again you have to hedge that a little bit because this doesn't account for closing costs being paid but generally speaking that's what's happening so we talked a few weeks ago about housing affordability and I'm sure that you probably figured out from all of this that none of these numbers are very good for housing affordability I discussed in my episode a couple of weeks ago the housing affordability crisis that we were right on the precipice of falling off the housing affordability Edge and unfortunately in August that is exactly what happened so here is what the numbers say about August we finally went down below 100 in the housing affordability index sitting at 99 what does that mean that means that well let me let me Define the housing affordability index straight off the GG page here says the index measures Hing housing affordability for the region for example an index of 120 means the median household income is 120% of what is NE necessary to qualify for the median priced home under prevailing interest rates a higher number means greater affordability so there's a lot that goes into this calculation that I don't get to see so I don't know you know 100% where you know how they're determining all all of these numbers but basically we're now at the point where the median household is not able to afford the median priced home we're at 99% so 100% would mean that you know basically the the median household makes just enough just enough income in order to afford the median priced home we're at 99% that means that it's just not enough on average or or or based on medians so housing affordability is is going squarely in the wrong direction we have again another record we have never had in Greenville this number go below 100 it's never even prior to really prior to 2019 it had never even come close 2019 it kind of came close in around the the June per time period but here we are this is perhaps The New Normal I'm not sure we we discussed this I'm not going to Hash through all that cuz we did discuss this a few weeks ago if you're curious go back and listen to the housing affordability episode but this is just something that we need to be prepared to understand is that middle class families now are going to be probably driven out start to be driven out into newer neighborhoods and by by newer I mean less familiar neighborhood hoods I should say whereas they've been you know kind of focused on some of these different school districts you know like Riverside for instance where I live they're probably going to have to or or maybe like Brushy Creek or whatever the case may be they're going to have to start probably pushing out into some other areas that are less expensive but also less desirable and that's just the reality of the situation when housing affordability gets to the point that it's at so here we are we've got maybe some more questions than answers the data kind of confirms what we what we already knew but it may be alluding to the fact that maybe this Market is starting to flip if if buyers are dropping out if there are going to be fewer closings coming up here in the future months then we will see an increase in inventory it'll still be a lot lower than last year but we will see that happen potentially if these numbers are accurate for for August and at that point maybe it'll shift a little bit in the buyer favor which wouldn't be the worst thing in the world I represent a lot of buyer clients and it has been a frustrating time I mean every single offer multiple offer situations every single time every single time and nothing comes easy in in this market right now and so we'll just have to keep monitoring this and keep seeing what exactly is going to happen whether as the school situations kind of get more figured out if people come back into the market I'm I'm very curious if we're going to have a a very slow fall season as it looks or if I think that there's also the possibility that we have a rebound fall season as people are like oh you know what there's not a second wave happening of covid or oh you know now my school went to to 5 days you know in the classroom whatever the case may be if people if their fears are alleviated or whatever it is that's causing them to not move are alleviated that maybe we'll have an an unusual uptick in the fall I think that that's possible obviously it's that's a very rose-colored glasses type of situation I'm not banking on that by any means but there are several different scenarios could play out but up to this point the scenarios are mostly geared towards the fact that it's still a sellers Market there's not a lot to buy out there and there are a lot of people looking to buy and so we'll have to keep monitoring that and we'll talk about that again next month but I hope you guys are doing great I look forward to talk to you guys again next week but until then stay safe in the market don't drop out don't be one of those statistics that drops out I want to help you guys buy or sell a house but stay safe and we'll talk next time [Music]