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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
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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
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