Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in
Greenville South Carolina I am your host
as always Stan McCune I am of course
a realtor here in Greenville South
Carolina if you've listened to any
episodes you already know that I
represent buyers I represent sellers I
represent invest S I represent owner
occupants and everything in between so
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that is that is the hope that is the
thinking we're trying to educate The
Market on Greenville as a whole
trying to make sure that people
understand what local real estate is
like and I get a lot of positive
feedback from a lot of people but
make sure that feedback isn't just told
to me make sure that feedback comes
through on the the r ratings and the
reviews of the show itself now today we
are going to be doing a little bit of a
of a part two on greenville's housing
affordability crisis we did an
episode on this last year and there is
some worthwhile data to consider for
a second episode I think I don't plan
for this to be a very long episode since
it's a topic we've discussed a little
bit before but I think it is worthwhile
to consider let's start by looking
back a couple of months let's start with
an astonishing stat we know that housing
affordability is directly correlated
to a few
things more than anything it is
correlated to supply and demand so when
as we've discussed many times before
when the demand outpaces the supply for
houses when there are more buyers than
there are Sellers and prices go up and
the number of houses what we call
inventory houses that are available for
sale that number then goes way down
and so what we saw so in Greenville we
have you know the Greenville
Association of Realtors tracks what's
happening in the market but sometimes it
takes a couple of months for their
statistics to you know really be
accurate so I tend to wait a couple of
months before I start saying what
those statistics are but rest assured
none of the numbers are favorable for
housing affordability if we go back
to November December of 2020 and then
you know January which January numbers
might change a little bit but we're
looking at median sales prices up
between 10% and 15 well 10 between
10.3% and
15.7% the past three months year
on year okay so like November of 2020
was up 13% from November of
2019 so that's crazy you know we
talk about the stock market how much you
should expect to get from the stock
market year on-ear for most people they
would be thrilled if they get you know
133% year on-ear of any investment
well real estate wise we are seeing
those types of numbers happening around
here and I don't expect that pace on a
meta level to to hold up but that is
what we're seeing happening right now
so as far as the housing affordability
index we talked about this again last
year but it dipped below 100 for the
first time last year and what that
means is that the housing
affordability index it measures
affordability by region by looking at
the median house old income and then
what is necessary to qualify for a
median priced home under prevailing
interest rates and so here's what
that means basically 100 means that
the median household income is a 100% of
what is necessary to qualify for the
median priced home in other words 100 is
we're barely hanging on the median
household income is barely able to
afford the median priced home last year
we dipped below 100 for the first time
according to the numbers the GG
published recently for January January
it finally it went back up to 100 it had
been in the high 90s to end
2020 January went back up to 100 but
that's honestly not a positive thing
that's not something I'm celebrating
because that's actually the biggest
decline year on-ear that we've seen
if if that ends up being accurate you
know like I said they they will adjust
this data in future months but the
housing affordability index in January
of 2020 was
115 now it's 100 that's a 133% drop
in the past 12 months that number has
dropped
7.9% so January of 2021 it's looking
like housing affordability decreased
by
133% year on-ear that's that's obviously
not good
inventory this is even more honestly
more astonishing we've been talking
about how you know inventory in we we
look at month's inventory and when it's
in the threes that's like a crazy buyer
Market well it's been in the twos since
covid basically and a lot of that has
to do we've talked about in the past
with interest rates mortgage interest
rates being low in December according
to the GG that went down to
1.9 months I mean I did not think I
would ever in my lifetime see it in the
ones it's nuts it is absolutely nuts
again when month supply of inventory
gets low like that that impacts housing
affordability and it just makes it
very difficult to buy obviously it's a
great time to buy like I said interest
rates are so low and they're probably
never going to go this low again at
least historically it we would be
surprised if it went this slow again
right but at the same time it's
it's just such a difficult time to buy
you have to you have to to be ready okay
there's going to be bidding wars right
I'm I'm hearing people I'm hearing other
agents and experiencing it myself other
agents that are saying I had clients
that put eight offers above list price
on various homes and finally the eighth
one they got I mean that's crazy that is
frustrating for everyone it's it's me
as an agent it means a lot of work
that I have to do for my buyer clients
and you know I I we all have to just
kind of endure the market when it's like
this obviously if you're just selling
and and you don't have to buy well it's
a great Market to do that if you're an
investor looking to potentially sell
properties this is the time to do it
you you have an opportunity here where
there's just nothing available that you
can sell in ways that you haven't been
able to in the past and so that's
something for sure that that needs to
be considered but the Greenville Journal
took this housing affordability
conversation to the next level by
talking about developers that are
specifically focused on affordable
housing so the last time we talked about
this and in what we'll call now our part
one episode on the housing affordability
crisis we talked about how really among
other things one of the main things is
we just need Builders to build more
houses that has a ripple effect when
when there's more new construction
that's out there people that are
maybe in the first home that they bought
and are looking to make their next move
they're very likely to consider new
construction and by the way if you're
looking at new construction consider
using a realtor rather than using the
Builder's realtor having your own
realtor will help you in a variety of
ways one it just gives you that layer
between the Builder and you someone that
can advocate for you but a good realtor
can also push for the Builder to do
different things can also help you to
understand what you need to inspect and
what you need to consider as you go
through that process so keep that in
mind by the way if if you're in that
bucket of potentially looking at new
construction
but as people are moving out of
their their first home their starter
home and if new construction is out
there a lot of them will will buy that
new construction and then that puts
their home back on the market and so
that helps housing affordability in a
variety of ways so we talked about
that in the past but there's also a
segment of of specifically affordable
housing I say that in quotes air quotes
affordable housing these are developers
that are spe specifically building for
below the market for a specific
demographic and and I don't mean that in
a in an identity politics type of way
I mean that specifically from a
financial perspective a demographic that
normally is unable to afford home
ownership or at least home ownership
that they need there are developers
that that are attempting to build build
homes
for those people in order to help them
get out of this constant cycle of
renting and to be able to finally
purchase that first home and it's really
great if they can finally purchase that
first home and its new construction
you know that's that's a best case
scenario now it's going to be Builder
grade everything's going to be Builder
grade it's not going to be anything
fancy but it allows people to break a
cycle and to be able to finally Pierce
through some of the economic
restraints that they that they may have
had due to being unable to get out
of a cycle of just going from one rental
to another so the Greenville Journal
published this article it says the
title of the article is kind of wordy
but it's Greenville has trouble finding
suitable residents for affordable
housing units despite widespread need
and that's a little bit of a misleading
title but it gets into a lot of
interesting aspects of of this other
concept of affordable housing which is
actually trying to build for people that
that need affordable affordable types
of of construction below what the market
is which is going to be increasingly
more and more prevalent so an analysis
that the Greenville Journal linked to
that was conducted by the Greenville
housing fund
the Greenville County Redevelopment
Authority and Thomas P Miller Associates
it found that we're approximately 12,000
units short to meet Demand with
35,000 residents earning less than
30,000
$513 per year which is the wage needed
to afford rent on an average two-bedroom
house in the county so we need
12,000 units more 12,000 in theory
houses but could be Town Homes too I I
believe 12,000 units short and
additionally I found this very
interesting Greenville it was in the top
10 Metro areas that experienced the most
growth for cost burdened rental
households now we've talked about that
before that it is disproportionately bad
to rent in Greenville versus buying
there are are other episodes on the
podcast where I just discuss that we
actually broke it down how the same
house that you're renting for $1,700 you
could purchase and have a minimal down
payment and your mortgage would be
several hundred your mortgage and
utilities and everything would be
several hundred less than that per month
but again it's tricky to break the
cycle because it's easier you know if
you've got credit score of 600
there's probably going to be someone out
there that's willing to rent to you
whereas if you got a credit score of 600
particularly during covid it's
difficult to get financing that is the
reality of the
situation and so here's what ends up
happening with these affordable builds
that are that they're trying to add
to the market is it's it's kind of a
vicious cycle of the the developers the
builders building these homes they get a
hodg podge of funding from all sorts of
different groups the federal
government the County government the
city government advocacy groups Banks
and maybe even the developers themselves
I'm I'm taking this straight out of the
Greenville Journal article that exact
language they're they're getting help
from a lot of different places because
obviously the only way to build
affordable housing is if you cut costs
in some way well you don't want to cut
costs and make make the house not sturdy
or or not sound or poor quality so they
need help government assistance
charitable assistance whatever the case
may be but the lay on top of that
that makes this extremely difficult is
that what is required by a lot of these
groups is that they actually have
before they start
building a pre-qualified
person that is that fits the parameters
of this demographic that they are
looking for that financially needs to
to be able to get affordable housing
they need that person to already be teed
up prior to them starting construction
on the home and it's a it's a vicious
cycle because those people that are
out there they might it might take a lot
of work for them to become creditworthy
to be able to to get the type of
financing they need but then and
additionally there's no homes out there
by the time they finally get
creditworthy now they can potentially
link up with one of these communities
to be able to
potentially get you know a property
under contract that hasn't been built
yet well now it's got to be built and
that might take several months or maybe
a year and while that's happening these
people people are are still renting and
so it ends up being this vicious cycle
and what's happening is that we're just
not having a lot of affordable housing
being built in the area and and I really
encourage again as much as possible
our our state our County our local
officials to cut out as much red tape as
possible the the Greenville Journal
kind
of references this in passing that
you know there's all sorts of of of
aspects that are involved here and
there's just a lot of red tape at the
end of the day and it ends up hurting
everyone and so we need to that's
something as a community we need to get
together I am a part of some
things as a realtor a few different
Community a few different committees
rather where we try to assist with this
with with affordable housing and try to
promote that sentiment among government
leaders and among other people because a
lot of people don't understand how this
works they just think oh affordable
housing that just means that people
need to stop artificially inflating
prices and landlords need to drop their
rent and all of these things but there's
a whole lot more that goes into this
that that doesn't meet the eye and a lot
of it comes down to honestly just too
many cooks in the kitchen at the end of
a day and so we have 12,000 units that
need to be built and that number is
probably going to keep increasing every
month hopefully I'm I'm very hopeful
that as Co starts to hopefully ease
off as things get more open
theoretically interest rates will go up
which is you know it's a positive and
a negative as mortgage rates go up
that means that there will be you
know fewer people buying
but at the same time that should mean
that our inventory levels become a
little bit more buyer friendly it's not
going to flip to a sellers Market
anytime soon outside of something major
happening like a war as as I
mentioned I believe last episode but we
have a need for at least it to move a
little bit more towards the seller and
it will still or sorry towards I
think I said before sellers Market we
needed to move at least a little bit
more towards being a buyer's market to
balance it out because it's been so much
of a sellers Market for so long I
wonder how many times I've mentioned in
this podcast buyers Market when I meant
sell's
Market it's a sellers Market all right
if I said anything about it being a
buyer's market listen it's not been a
buyer's market for like a decade so
so anything that I said before
disregard that I am not re-recording
this podcast this is one of my busiest
weeks of the year and I'm just trying
to squeeze this in right now to be
completely honest but that
is the problem there are more questions
than answers when it comes to this
but if you guys have any thoughts or any
ideas or any questions about this as you
know my contact information is in the
show notes just like it always is please
feel free to reach out to me I'd
be happy to just chat about this or if
you or someone you know is looking to
buy or sell real estate let me know
that as well of course that is that's
how I actually make money I don't make
money on this podcast I make money as
a realtor as an investor those are the
things that I do and as always please
if you love the podcast subscribe
download rate review do all those cool
things until next time stay safe let's
buy and sell some houses together
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