[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 go ahead and give the show a rating or a review if you've not already done that please go ahead and subscribe to make sure you don't miss future episodes and if you need a realtor or if you just want to shoot the breeze with me talk discuss some ideas discuss this podcast all of my contact information is in the show notes I will reply to everyone that reaches out out to me if you don't hear from me it probably means you've perhaps sent me an email that 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]