[Music]
Hello and Welcome to another episode of
Selling Greenville I your host Stan McCune
realtor here in Greenville South
Carolina we are doing episode 51 this
week 51 episodes we had a a fun little
episode last week 50 with some
lessons that I've learned it coincided
with my fifth anniversary in real
estate which actually I downplayed
that how the closely the timing was to
my 35th birthday which happened last
week but actually I found out that
my fifth anniversary with sedan Jer
Realtors which is the company I've been
with the entire time I've been a realtor
that actually did happen last week so
so a lot of things happened last week I
was very excited about that this week
we're going to be talking about timing
the market into today's episodes timing
the real estate market but before we
get into that a little bit of
housekeeping as we always do please
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everyone that reaches out out to me if
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went into my spam or something like that
please make sure that you reach out
to me I respond to everyone at all
times I was actually on vacation last
week I got multiple clients under
contract while I was on vacation I was
setting up showings yes I have systems
in place to make sure that even when I'm
out of town I can still help my clients
that is is the way I roll I'm not the
typee of person to turn off my phone and
just decide you know what people are
just going to have to live without me
listen real estate is a 247 business I
get that and I embrace that and
and that's just the way it works and of
course I enjoy what I do which which
helps quite a bit but we're talking
about aside from the fact that all my
contact information is in the show notes
you're here listening because you want
to hear about timing the market right
and this is a question
that I get from time to time from
usually from novice investors but
also from from people that haven't
bought and sold a lot of of properties
and occasionally I'll hear it from
someone who is pretty Savvy but is is
perhaps trying to be a little bit savier
than they should be how to time the
real estate market specifically how can
we buy low and then sell High and and
and typically when people talk in those
terms they are trying to approach the
real estate market similarly to how the
stock market works now I always have to
be careful when I have this discussion
or when I talk about these types of
things because I am not a financial
counselor a fin a a financial planner
I can't assist you with that legally I
cannot assist you with financial
planning don't ask me hey what's my best
strategy should I keep this money in a
four 1K or should I invest it in real
estate I'm sorry I can't do that there
are professionals out there that are
licensed that can do that that's not
what I'm going to do and and so I
will hedge what I'm about to say with
that I'm not a financial planner talk to
your financial planner your financial
adviser for specifics on your strategy
but I can say this in my experience
there is a major difference between
purchasing real estate and now I
understand there's a lot of different
models for purchasing for purchasing
real estate and there are some models
that are similar to the stock market I'm
talking about actually buying a property
in one way or another there is a
difference between buying property and
how that works versus buying ownership
in a company buying stocks on the stock
market and the primary difference at
least in terms of this discussion is
that a house value a property value
cannot artificially grow or plummet in
value overnight in the same way that
stocks can outside of some really really
major macroeconomic event happening such
as you know like a war for instance
like if we had a Pearl Harbor type of
situation then that would impact real
estate right that would impact real
estate overnight but outside of
something like that or outside of of a
recession that is directly tied into
real estate that's what we had in 2008
2009 and and several years following
that was a real estate recession that
was because of of what lenders
were doing specifically with regard to
mortgages and mortgage back Securities
and all of that we've talked about that
in the past that was a real estate
recession we had a little recession in
2020 thanks to co that did not hurt real
estate yes we saw an immediate
somewhat of an immediate response in
March where things slowed down for a
couple of weeks and then it immediately
bounced back up and pretty much every
real estate company had record years in
2020 here in the upstate so even though
2020 experienced a bit of a recession it
did not impact real estate real estate
is different when it comes to
recessions and when it comes to to
these types of of macroeconomic things
versus stocks stocks can as anyone knows
stocks fluctuate on a day-to-day basis
this is why you have day Traders why
people are big into day trading some
people make a lot of money doing that
some people lose a lot of money doing
that I have no idea I don't know
anything about day trading so again I'm
not a financial adviser and I don't do
day trading maybe I should maybe I
shouldn't I don't know I understand real
estate that's what I do well so I'm I
try to double down on what I do well
rather than dabbling in in a bunch of
things poorly but I I do know I I
remembered this just because it's kind
of a funny thing and I listen to The
Joe Rogan Experience Podcast every now
and then it's long so it's good for a
nice long drive and I listened recently
to he just we're recording this in
the middle of February of
2021 he just reinterviewed Elon Musk
who he's interviewed in the past and
they shared a little bit of a joke as
they you know busted out some alcohol
I don't know if it was bourbon or
whiskey or something and Joe Rogan
joked with Elon about how in a previous
episode they had smoked marijuana on
Joe Rogan's stage there well when that
happened immediately Tesla's stock
started plunging people I don't know why
I don't know why why people thought you
know maybe they thought that Elon Musk
was going to go to jail for that I mean
listen a guy like Elon Musk is not going
to go to jail because he puffed you know
some weed that that's simply not going
to happen but that's the volatility
that you have in the stock market the
dude on on a podcast which of course
they they do have video that they that
they a of it but he just he he just took
a little puff of you know of a drug
that is
you know technically illegal in a lot of
places or technically a banned
substance in a lot of places and because
of that his company stocks dropped
immediately and and smart people at
that moment went and bought a bunch of
Tesla stocks and and made a lot of money
well listen that is not what happens in
real estate that is not the way the real
estate market is so you can't take that
same Buy Low sell High approach in real
estate
it just it doesn't work things take
usually a lot more time in real estate
for the market to adjust you don't see
instantaneous adjustments you don't see
overnight adjustments outside of of very
unusual like once or twice in a lifetime
type of events like we've already talked
about like a Pearl Harbor type of event
like a Great Recession type of event but
even if you look at the Great Recession
that happened 2008 2009 9 yes that was
when it hit right the Great Recession
started around that time period but
here in the upstate we didn't really see
the real estate market completely bottom
out until probably around 2011 there are
a few different ways to to look at
that but I would argue just based on the
on the data that I've looked at it
was probably around 2000 towards the
middle to the end of 200 11 so it was
years if you really wanted to buy at the
bottom of the market that wasn't in
2009 that was actually more in this area
at least in the Greenville upstate South
Carolina area around
2011 so again it is it's just it's not
Apples to Apples we have to be
careful with timing the market and and
here if you're wondering where I'm going
with this I am going to caution you
against timing the market
in real estate I don't like it when
people try to time the market I don't I
don't think it's fruitful but I do have
some ideas about how to think
about it in in more of a of an
appropriate way from a real estate T
standpoint and the way I think about it
I'm not trying to time the market to buy
low and sell High that's that's really
difficult from the standpoint of
waiting for the market to flip right
we're in in a sell's market we've been
in a sellers market for a really long
time if you are waiting for a buyer's
market to come around so that you can
start to to buy low and then hold on to
it for when it flips back to a sellers
market and then sell High you could be
waiting a long time and then for the
buyer Market to come around and then
you're probably going to sell much
sooner than you should theoretically for
the sellers Market to come around I mean
you know I I thought it was a crazy
sellers Market Market just a few years
ago and 2020 just completely blew
everything out of the water one of my
early clients in 2020 when covid was
happening right at the very beginning
you know in March was like Hey is is
this about to flip to a buyer market and
I was like you know we didn't know what
was going to happen I was like I don't
think so I don't see that happening
and you can listen to it was around that
time that this podcast started you can
listen to some of those early episodes
where I was perhaps working out some
of the Kinks of of my audio and whatnot
U but you can listen to some of the
early episodes of this podcast where I
discussed I I don't really think that
this is going to flip to a buyer Market
not only did it not flip to a buyer
Market it doubled down on a sellers
Market which is driven as we discussed
in the past a lot by what happened
you know when the FED made changes
that resulted in mortgage rates going
down so again it's very difficult to
time the market on a macro level a
better approach when it comes to real
estate is to think about the market the
real estate market in terms of Trends
specifically in terms of trends like
appreciation now we we talk about home
value property value appreciation a lot
on this podcast because that is a very
very important consideration is a very
very important factor the reason why in
in the US
a lot of people their most valuable
asset is their house is because there is
this assumption that their home value is
going to appreciate now there are some
parts of the country a lot of parts of
the country where homes do not
appreciate at the at the level of
inflation or greater than other ways you
can invest that money in the upstate we
have been blessed at least since
201122 home values have appreciated
in a lot of areas and at a lot of price
points much better than
even a lot of other options in the
stock market and whatnot things that you
can do with your money in terms of of
stock trading in terms of 401ks and
whatnot for a lot of people their home
values are out appreciating those things
and for sure their homes are out
appreciating the infl rates almost
across the board we talked about that
there was an episode way back when I
don't even remember the episode number
there was an episode that I did that
really got into the nitty-gritty on
home value appreciation where we tracked
the median price point for different
homes and some of them were were
appreciating in some areas 15 to
20% per year which is which is crazy
but that's not out of the question for
this area
and again I'm not going to rehash all
of that we talked about that but
everyone wants to know right as part of
this whole Buy Low sell High
conversation everyone wants to know what
the next big area in the upstate is
going to be from the standpoint of
exponential appreciation so we know that
the upstate you know is appreciating
well if you want to buy a home in in the
east side of Greenville you know you're
probably going to see annually 5 to 10%
appreciation like pretty
consistently but what are the areas that
are like really up and coming where
we're going to see more of those 15 to
20% rates of appreciation in home
values and where you can you know buy a
home really cheap now but then sell it
for three or four times what you bought
it for this year sell it for three or
four times that in just a few years
where you might actually see you know
even significantly greater than 15 to
20%
appreciation well again that's hard to
predict at the end of the day now we
know that there are some depressed areas
that seem likely to improve in the
future when I say depressed I just
mean areas where homes you you see a
much larger percentage of homes that
need significant repairs properties
where there are landlords that aren't
updating their houses properties that
have been in a family for a really long
time they've been vacant for 20 years
there are several areas like that and
you can kind of reverse engineer which
areas are the ones that are likely to
to to at some point improve in the near
future just based on their location if
they're close to downtown Greenville in
one way or another or close to other
areas that are being revitalized then
they will probably at some point flip to
some type of exponential appreciation so
you know some areas that come to mind
are The Donaldson Center area the PO
Mill area of Greenville there are
actually parts of Overbrook that I would
consider you know that would fit that
description parts of the White Horse
Road Corridor and you might even
consider some parts of
Malden and and some parts of Taylor
in there Taylor is an interesting one
well Malden as well there are a lot
of homes there that you know people
moved in them you know
40 years ago when they were in their 40s
or 50s and now you know those people are
getting older they're starting to to
sell them off they haven't been able
to do updates to those homes in a very
long time and and now they're starting
to get sold and now those areas are
starting to that that already aren't bad
areas but they're starting to be
revitalized even in spite of that to
to kind of take that next leap so we can
read the tea leaves on on some of those
things we can you know read the Tea
Leaves by by looking at you know
what areas are are getting the most
amount of of money dumped into them
whether that's money from the city or
the county or the state money from
developers you know what areas have
predominantly absentee owners in them
you know some of these things can help
us to identify what those next up and
cominging areas are but at the end of
the day again is that
really necessary I would argue that
there there can be some value in that
there's certainly some some value in
that I own a property in the PO Mill
area that I think will be extremely
valuable in years to come and it's
doing fine as a rental property I
could probably sell it and make a good
bit of money versus what I bought it for
a few years ago but but why would I I
feel like that's an upand cominging area
at some point down the
road so there is some value in that
if you're planning to hold on to
something for a really long time but I
don't think it's really necessary and
and in a lot of in a lot of ways it
might not even be feasible again to try
to time the market and from not just
from the standpoint of the macro Market
how is the the macro real estate market
going but trying to time the market in
terms of identifying those areas those
High upside areas that are really
cheap right now I mean it's again it's
pretty obvious you can find pretty
easily the areas where homes in
Greenville County are selling cheaply if
that's your strategy if you just want to
roll the dice with just buying cheap
properties and waiting for exponential
appreciation to happen to them it's it's
not hard to figure out what those areas
are but we already know in general
that the upstate as a whole regardless
of of those areas appreciates
consistently over time we already
discussed that even in in this episode
and again you can go back and listen to
my episode where I specifically dealt
with
appreciation but in in my opinion the
way to buy low isn't to try to time the
market or to try to just buy those cheap
areas that are perhaps depressed and
are going to appreciate over time but
instead you need to identify what the
opportunities are right now there are
opportunities right now in this market
that don't just involve you purchasing
the cheapest possible properties in in
the areas that may appreciate
exponentially in the future obviously
there are always opportunities out there
people that are selling below the market
for one reason or another I always tell
people when for instance a multif family
property comes on the market almost
always there is something wrong with it
almost always because people don't
typically sell multif family in our area
there's something there's got to be
something wrong with it either needs
work done on it or it's got a tenant
that you know is causing issues or
whatever the case may be and so those
can be opportunities what we might call
Value ad opportunities where you can
purchase something below the market and
prove it and and see greater
appreciation in that property than what
you invest into it there's always people
out there this is you know we talked
about in previous episodes about
wholesalers wholesalers specialize in
identifying motivated sellers people
that don't want to go through the
whole process of listing their home on
the open market they just want to have a
smooth easy transaction they're willing
to sell the house for much less than
what they much less than what they
could sell it for On the Open Market
because they get something in return a
smooth transaction something that
they don't have to to to manage and
worry about they don't have to clean the
home for showings etc etc
additionally I I think that it's
important to accept that at least for
the immediate future I think the values
of the upstate will continue to
appreciate there's no reason to think
that values won't appreciate the way
they have in the past because that's
being driven by supply and demand and
demand's not going away anytime soon we
have plenty of people wanting to move to
the upstate of South Carolina and the
people that are here they're by large
not looking to leave and Supply you know
we do see more developers more Builders
trying to pull out permits to build
in this area but we've got a long
ways to go before there's going to be
more Supply we we need a lot more Supply
we've talked about the housing
affordability crisis in this area we
need need those Builders way more
than what we currently have lined up so
all that to say I don't see any major
risk in in appreciation dropping off
anytime soon and so that means that it's
less important to try to time the market
you you try to time the market when
you're unsure of the future you need to
to be very careful okay I've got to be
very careful
that I buy low so that I can sell High
we're in a market here where all
indications are that as long as you
don't buy extremely high if you buy
where the market is you should be doing
fine several years from now as the
market just continues to appreciate at
its normal rate another consideration
of course when you're trying to to
time these things and and this is a
little bit more of a timing based thing
is mortgage interest rates now we talked
about this as well on several
episodes but they have been for several
months now at historically low rates
again we're here in the middle of
February
21 mortgage interest rates are
ridiculously low and it's a good bet
that they will never go lower and and
may never go back down to these levels
again I would be shocked Ed to ever see
30-year loans go below
3% again it's possible we we are in
very strange times in terms of of how
the government acts but it would it
would be surprising to me it's a it's
definitely a historical anomaly and
so that can be a good indicator when to
buy as well if you're able to to buy a
property that you're planning to hold
for a long time and you get a
ridiculously low interest rate then
you're able to buy more home for less
money it's it's very simple and you're
able to M to keep that interest rate
for as long as you have that house
and as long as you have that loan that's
a great way to to in invest your
money in my opinion as a non-financial
counselor now some of course will
mention that when mortgage rates are low
usually prices go up the prices for
homes as the market get kind of balances
out and that's true to an extent but
here here's the thing we need to to
caution on that way of thinking because
different parts of the country have
different real estate markets and and
what we've seen here in the
upstate is that while that is true we
did see prices really go up last year
when interest rates went down but what
we haven't seen is as interest rates
creep back up which up until last
year during covid they had been creeping
quite a bit up from the previous time
that they had bottomed out we don't see
prices go down and again it's a supply
and demand thing so what I don't expect
is okay so prices went up in 2020 due to
very low mortgage
rates presumably those rates those
mortgage rates will go up as this year
goes on we're not going to see prices go
down we should not expect that there is
no data to indicate that the cost of
housing will lower as in as mortgage
interest rates go up that is that would
be a an extreme historical anomaly for
the upstate nobody is predicting that
that's going to happen you can expect
that prices are going to continue to go
up regardless of what happens with
mortgage interest rates it's just
that when rates are low those prices are
going to go up a little bit faster than
they normally
would
but in general a home that you can buy
right now in February of 2021 is going
to cost you less than it will cost in
February of 2022 so if you can get it
for less than you would next year and
you can get a low mortgage
rate do the math yourself to me in most
instances if if you're looking to make a
purchase whether as an investor or
whether as an owner occupant sooner is
going to be better than later generally
speaking of course everyone's situation
is different if you want to discuss your
situation in more detail obviously
that's where you can reach out to me
with my contact information that's in
the show notes
but I would just say this if you're
in real estate in the upstate for the
Long Haul whether it's as an investor
whether it's as an owner occupant you
really don't have a lot of value in
attempting to wait for the market to
flip to try to time the market because
you're you're probably again we've
talked about this a little bit but
you're going to end up waiting for a
really long time you're probably going
to end up buying too soon you're not
going to buy when the market has
bottomed out you're going to see the
market flip to a buyer's market and
immediately start to buy and then when
it flips back to a sellers Market you're
going to immediately start to sell and
and you'll never buy at the lowest point
of the buyer Market you'll never sell at
the highest point of the sellers Market
it is very very challenging to predict
those things on a real estate level it's
much more challenging in my opinion than
is when it comes to the stock market
there are clearer indicators of when
it comes to company stocks than there
are when it comes to
houses a better option in my opinion is
to take advantage of the opportunities
in front of you is there a good
opportunity
whether it is a good investment whether
it is a good house for your family take
advantage of that there's no virtue
There is almost certainly not going to
be any value you're not going to win out
by waiting and and you can be
confident almost certainly based on the
data that's out there that the property
that you purchase as long as you don't
overspend it will end up being a good
investment and again I as a real realtor
I try to help my clients to make sure
that they don't overspend I'm very
honest I spend more time talking my
clients out of purchasing properties
then I spend trying to talk them into it
that's the way I run my business I try
to be as transparent and as honest as
possible I feel like that's the best way
for me to do
business I I think another consideration
is is this and this is particularly
for owner occupants it's that the the
market often appreciates
linearly okay in other words we don't
see like you
know homes that are in this price point
up to a certain price but let's just
call them middle class homes we don't
see like more expensive middle class
homes appreciating at a lesser rate than
cheaper middle class homes generally it
appreciates kind of in the same straight
line like for instance if $200,000 homes
are appreciating at about 10%
in a given year probably
$300,000 homes are also appreciating at
around the same rate and and what I hear
frequently is people will say well you
know what this Market is too crazy right
now I'm going to wait for this Market to
settle down before I you know before
I move for instance I mean obviously I
work with a lot of investors as well but
let's talk about owner occupants I've
heard some people say you know what I
want to move we're going to move in the
next few years but I want to wait until
this Market settles down this is just
too crazy I'm not going to get into
bidding wars I'm not going to you know
deal with all these situations where
there's highest and best offers all this
crazy stuff I'm just going to let the
market settle down a little bit and you
know what I've got a home that I have
to sell and as even though next year the
homes that you know if the market
settles down the homes that I'll be
looking at will have grown in value my
home also will have grown in value
well here's the problem with with that
if you're if you're moving into a more
expensive home or if you're an investor
and you're looking to sell a cheaper
investment to buy a more expensive one
you're going to end up spending more
and paying more by waiting because if if
you've got a $200,000 home that
appreciates by 10% then over the course
of a year then it appreciates $20,000
versus if you're looking to buy a
$350,000 home that you would move into
that's going to appreciate by $35,000
and so you'll end up losing $155,000 by
waiting again every situation is
different but most of the time people
tend to not think logically when it
comes to deciding whether to wait to
purchase or to to make some type of a
real estate acquisition versus doing it
now odds are generally speaking if you
think that you're going to make some
type of real estate purchase in the next
year it makes more sense to do that
sooner than later and I'm not just
saying that because I want more closings
I promise you that is not why I'm saying
it this is how I practice my business
because you guys know if you've listened
to other podcast that I also invest in
real estate and I jump on the
opportunities when they arise I don't
say you know what I'm going to I'm just
going to wait this is too crazy yeah the
Market's nuts right now
okay but that doesn't mean that I'm I'm
just going to wait for it to settle down
that doesn't make any sense there are
opportunities right now and that's what
I truly believe that everyone needs to
understand and needs to recognize that
there are always
opportunities right now to consider and
there's yeah maybe a bidding war doesn't
feel nice maybe that's you know it's
frustrating to to try to purchase
several homes and to and to end up
losing out on them because of the
bidding war types of situations and you
know me as a realtor I don't like
spending time putting writing a bunch
of offers that end up getting rejected
because it's it's just a crazy market
right now but that's just the way it is
that is the
way the market is right now and we don't
have any indication that that's going to
really change anytime soon and in the
absence of that I think that that we
need to push forward and deal with the
with the yucky feelings of having offers
rejected that's what I have to do as a
realtor and you know I put in a ton
of offers on investment properties that
have that I've been out bid on as well
it's just the way it works you it's it's
like fishing you you put your line out
there you just need to get one fish to
bite on it and a bunch of them will pass
by the line but you only need that one
and and that's the way it works
that's what we're that's what we're
looking for but trying to wait it out
and trying to time it and trying to say
you know let's just wait until the
market calms down settles down you're
going to be waiting for a while and
and you're going to find that home
prices that property prices that
investment property prices by the time
you finally determine that the market
has slowed down to your liking now the
market is going to be way more expensive
and so you have to to pick your
poison the poison that I pick is to and
what I recommend is to go for the
opportunities now and just understand
that it is a sellers Market is a wild
Market you have to take that into
consideration and just move forward with
with putting your best shot in there
with taking it seriously with not
lowballing
offers because you can't do that in
the seller Market typically
and if you can I'll let you know I did
have some clients that we were able to
get some lowball offers under contract
last year despite the crazy Market
there are some opportunities like that
and I can help to identify that and
that's where I come into the equation
right I'm able to help identify where
the opportunities are I'm able to help
you to not have to time the market that
is a lot of the value of what I tried to
bring as a realtor is so that you don't
have to be like okay well when is the
right time to strike well there may
always be a the right time to strike is
when the right time to strike is is when
the property that fits your criteria
comes on the market and and for some
people you know I have that discussion
where it's just like you know what what
you're looking for and at the price
point that you're looking for at it for
it at you're not going to find that
so maybe you you just need to decide
hey I'm we're just not going to buy that
investment property that doesn't exist
we're not we're not going to buy that
that new house it doesn't exist
sometimes that is just the reality of
the situation and those people they
might find
themselves and stuck you know in
paralysis
analysis analysis paralysis whatever the
whatever the phrase is they might
find themselves being frozen because
they don't know what to do they they
can't figure out whether to to pay
more than what they feel comfortable
paying because that's what they have to
do in order to get the the property that
they want or to just wait it out which
is a Fool's errand because properties
are going to keep going up in in
value again where I come into the
equation is that I can help to identify
the opportunities and to help filter
things and to give you an honest as much
as I can non-biased assessment on
where the market is and how that fits
into what you're looking to do whether
it's add to your rental portfolio or
whatever the case may be so if you're in
the market for anything let me know all
my contact information once again is in
the show notes I'm happy to help you
guys out with anything let me know I
hope you guys stay safe and have a good
rest of the week
[Music]