Hello everyone and Welcome once again to
another episode of Selling Greenville
your favorite real estate podcast here
in the upstate of South Carolina I am
your host Stan McCune realtor right here
located technically in Greer South
Carolina but I am on the Greenville
County side of Greers so yes I am your
Greenville realtor if you have any real
estate needs you can find all of my
contact information in the show notes
I'd love to talk with you I'd love to
meet with you text me call me message
me however you find me I will respond
I can assure you of that if I get the
message I will respond I had someone
recently say hey you didn't respond to
that message because I didn't get it
if I if I don't respond that means I
didn't get it I operate my email on an
inbox zero basis that means I at any
given time attempt to have all of my
emails filtered into folders which means
when I get a new email I jump on it I
know it's important I take care of it or
I do something with it so if I'm not
responding to you that means I'm not
you're not getting a hold of me is
the long story short so reach out to me
and if you don't hear from me reach out
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make sure that we reach each other
all right with regard to the show as I
always say please go ahead and give a
rating and a review to the show I always
appreciate that it helps the show I'm
getting a lot of feedback from you guys
just saying hey I listened to that or I
likeed what you said about that I would
appreciate if if you could also just
Express that by means of a review
just take a few seconds to just write
that review that encourages me to
keep the show going because guess what
this is not an easy time for me to be
podcasting I'm working like 14-hour days
right now trying to help all my buyer
clients so yeah it I'm doing
everything I can to keep this show going
just to find an hour in my week to to
squeeze it in so any encouragement I can
get from you guys to keep it going
which I plan to but still any
encouragement I can get I would
appreciate all right we're going to be
talking about the pulse of the market
today and
specifically what is what is
happening and do we see this Market
cooling down in the future what do what
does the data say and anecdotally what
am I running into as a realtor right now
so we'll start with the just the
anecdotal
anecdotally things have been are crazier
than ever for me representing my buyer
clients it seems like this summer things
went to a new level a whole new level
and I we'll get into this a little
bit more but right now
it is really really difficult if
you're if you're a buyer unless you
have substantial cash in the bank that
allows you to wave appraisal
contingencies that you know allows
you to have a really strong Loan program
or basically a cash offer it's it's
extremely difficult for you to play
in this market now obviously I've got a
lot of buyer clients that don't have
much more than 3 and 1 12% or 5% to put
down 3% to put down depending on the The
Loan
program and for those buyer clients we
we just have to be patient we just have
to keep making attempts making offers
and and do putting our best foot forward
and eventually we will find something
that will go under contract if you're
listening and you're one of my buyer
clients and you're like when is when are
we going to find something when are we
going to get under contract it will
happen we just have to be patient but
here's what I'm seeing I I'm seeing that
this is I I don't want to say The New
Normal but this normal that we have
right now this is here to stay for some
time and here is why I'm coming to
that conclusion not just anecdotally
looking at the data I see this in the
data
one thing let me back up for one
second one thing that the data doesn't
really tell us is how many buyers in the
market so that's that's the anecdotal
part of it we we can measure Supply in
terms of how many homes are on the
market but it's not as easy to measure
demand we we can look at historical
demand even you know as historical as
last month but that's not necessarily
indicative of this month's demand and
that's where we have to kind of combine
some of the data with some of the
anecdotal information that we have
from me from o from others realtors
that have talked to from some
podcasts that I've listened to from
others that are really connected in the
in the real estate market there's a lot
of data out there and you have to kind
of connect it all together so let's
start with this let's look at the the
number of new listings coming on the
market I pulled data from I think it was
May 6th to to June 6th of this year that
I I pulled all this a few days ago I
meant to record this a few days ago as
well but mind you I've been busy this
is June 9th that I'm recording this
so from from May 6 to June 6th we had
uh
1,662 new listings for single family
homes okay we're I'm focusing on that
I didn't get into land and all of that
1,662 new listings during that time
period how does that compare to last
year well that is almost 11% better
than the same time period last year so
so that's good that's that's good
that's an improvement that's this is
what we need to see we need to see more
listings coming on the market so nearly
an 11% increase year on-ear for that
period of time that's great that's what
we want to see that's we're going in the
right direction there what about
month over month if we pull April 6 to
to May 6th or roughly speaking it's
nearly a 5% increase over that time
period from basically the month of
April that's good as well all right
we're trending in the right direction
but remember last year in May we were
still really in the early stages of
covid so you know we had just had the
however many weeks to flatten the curve
and blah blah blah blah blah and and
there was still it was still crazy so
it it's really hard to
obviously the comparisons fall short
when we're comparing this period this
year to last year because last year
we had so few listings coming on the
market due to covid for a variety of
reasons and and that's something you can
listen to the my podcast from back then
we went ad nauseinto into all of that
so we really have to go back to 2019
okay 2019 is is when we need to to look
back and and see compare listings now to
to then and normally what we see is is
kind of or what we hope to see at least
is more listings every year so we want
to and and there's a simple reason for
this there's more people in our area
each year and in theory there should be
more new construction coming on on the
market every year and so there should be
more new listings more houses sold etc
etc every year with occasional dips with
occasional
dips unfortunately the data it this
is where the the positivity ends so
2019 the same period that May 6th to
June 6th period of
2019 had we are down almost
8% for that period this year versus that
period in 2019 for the entire year to
date 2021 versus 2019 same period of
time we are down 7 and a qu% new
listings during that time period so
what was the market like in 2019 you
know how does that compare well I will
remind you that 20 that 2019 was still a
sellers Market this was not it's not
like we were in a buyer Market in 2019
now the market in 2019 it was a sellers
Market it was not anything like the
sellers Market that we currently have
right it was we were in the the three
and a half month inventory range we
typically look for a a comfortable kind
of equal Market to be around the
the 5 to six month range roughly
speaking which we have not been in 5 to
six month inventory range in a very very
long time so may of 2019 we're at 3 and
a half months inventory that is squarely
a sellers Market that is still
consistent multiple offers that is still
people getting upwards of
98% of of on average in the market what
the house is listed for which means that
uh
most homes are getting at or above what
they're listed for because that number
is dragged down by those that overpriced
their homes and then have their homes
end up selling for you know 5 to 10%
less than what it's listed for so if
even if we return back to May levels we
are still in a sorry in sorry not May
levels 2019 levels we are still squarely
in a sellers Market I we need to keep
that
in mind
and so unfortunately we aren't even back
at those levels in terms of new listings
and we have more buyers than we did
back then again that's hard to measure
but every Source out there indicates
that there are more buyers and
anecdotally again in Greenville we are
having people I I'm literally getting
calls I I can't tell you how many weeks
straight I've gotten calls from people
out of state that are moving wanting to
move here out of country wanting to
move here I'm getting calls I I have
I've never had a string like this a
string of I don't know six seven or
eight weeks of getting calls from people
out of state looking to move here I
know that that's not firm that hard and
fast data but I've been a realtor for 5
and a half years so for me to have a
streak like this that I've never had my
in my career that tells me that
Greenville is we're getting a lot of
people just coming in here from outside
the market and that really makes things
even tighter because those people don't
aren't selling a home here those people
are only
buying so we have historically low
inventory but we also need to discuss
what's happening here and why the
market I think this summer has gotten
even crazy easier because now we have
obviously as we've talked about before a
glut of buyers in the market that is
being driven by the low interest rates
of course and of course the FED is
threatening to increase them which it
will these interest rates are
historically low so they are going to go
up everyone believes they're going to go
up so we've got all these buyers trying
to cash in on the fact that they can you
know get a home for like 3% or low 3% in
some cases I just had a closing that was
and the high 2% on a 30-year
conventional loan rates are still
really really mortgage rates still
really really low really wonderful for
people looking to move here we've
already talked about people moving here
from out of town that is a big driver I
I was listening to a podcast recently
about some of these other areas that
are seeing tons of buyers move to
them from out of state Austin Texas for
instance tons of people from California
moving to Austin that Austin is now
seeing appreciation price
increases year onye of
25%
25% why is that because people with
California incomes are are going to
Austin and saying you know they sell
their house and in California have a
cool $500,000 in their pockets plus a
California income drive up the prices
25% why not we want to move to Austin
guess what that's happening here in
Greenville we have people selling their
homes in in New Jersey and California
and who knows you know where else
saying well I I've got all this money
in my pocket let's let's let's make
an offer on on a house down here that
can't be can't be refused and then the
market gets reset when that happens now
you see prices all over the place go
up and and so we have that happening
here obviously we have those that sat
out the market last year now gaining
more confidence those that have been
vaccinated those that are less
concerned about covid for what you
know for one reason or the other
those people now that sat out last year
are we're seeing them enter into the
market this year and this was also a
very interesting one that I heard
recently from Bloomberg is the
idea that is well documented this is
there there is data behind this I don't
have all the data in front of me but
there is data behind this that there
is a a new group of home buyers entering
the market now that we call the Sleepy
gen xers okay these are the people that
are roughly 40 to 60 years old now and
in some cases some of them have never
bought a home they've never bought a
home and there's a reason why there is a
clear reason why the Sleepy gen xers
haven't bought a home and that's because
they were hit by the financial crisis in
2008 in ways that that others were not
hit by it but before they had an
opportunity to become home buyers and
they lost their jobs and they had all
this hesitancy and they've just decided
hey we're just going to rent or we're
going to live with our parents or or
whatever the case may be and what's been
happening is the past 15 years they've
been saving up money well I guess we
can't say 15 years let's just say the
past 10 years they've been saving up
money and waiting for the right time and
for some reason Co sparked for them that
this was the right time it was perhaps a
combination of getting stimulus checks
from the government that then added to
that war chest that they had perhaps
it was the fact that that the housing
market didn't go into recession that we
didn't have a housing crisis and so then
they're like oh okay every time
something major happens in the global
economy it doesn't crush the housing
market that gives us more conf confid to
go out and buy a house so we have an
entire basically an entire
generation entering the housing market
looking not to sell looking to buy
and again there is there's a lot of
data out there on this if you want to
if you want to listen to the podcast
there was a a Bloomberg Bloomberg
podcast called Odd Lots it's a it's a
very good podcast I just started
listening to it and they covered this in
a recent episode I think it just came
out this week so you can listen to that
odd Lots shout out to them great podcast
and they they talk about all sorts of
things with the
market so all in all right even
though we're seeing an uptick in
inventory right now you know year on
year month on month it's pretty clear to
me at least that more buyers have
entered the market than
sellers I can feel it what we're
seeing is you know houses that in
January might get two to three offers on
them now we're getting 8 to nine offers
on them that's how I'm feeling it we we
are consistently seeing now situations
where there's eight to nine offers on on
homes that wasn't the case in January in
January is you know like I said it's
more like two to three houses sorry
two to three offers on a house we're
start I'm starting to see offers that
are 10 15% above list price getting
rejected that a that is a change it
it was before it was more in like the 5%
above list price range now that that has
uptick to 10 to
15% I'm starting to see AB
absorption happening this past week
I had multiple situations where
either I was attempting to show a
house that had been on the market for a
really long time or put or getting ready
to write an offer on a house that had
been on the market for a really long
time and right when I was about to do
that they went under contract what in
the world is happening there well again
people are are looking at what's
available they're desperate they need a
place to buy a place to move and it's
like okay let's look at what's been on
the market for a while it might not be
perfect it might be overpriced but
what's everything else that's on the
market is not perfect and feels
overpriced so why not let's just
let's just go ahead and and buy those
homes so we're starting to see Market
absorption that we didn't see earlier
so a lot of things happening that
indicate to me that we have are seeing a
a strong strong buyer Demand right now
now I will say this okay usually in July
it the market slows down ever so
slightly ever so slightly and I usually
attribute that to vacations I don't know
if that's going to happen this year or
not it didn't really happen last year
but there is a possibility that we see a
little calm in July but then usually it
picks back up in August again we have to
throw out kind of
everything in terms of historicals
because last year we had to throw out
everything historically and we don't
know when things are going to go back to
normal this year or next year or
whenever that podcast that oddlot's
podcast that I just referenced they
said that there might be kind of an
New Normal here because primarily
because of of the the Gen xers entering
in and some things going on with new
construction whatnot that I'm not going
to get into here that we might have a
bit of a new normal and if you're
looking to buy right now you don't want
to hear that but unfortunately there
is a good chance that that is the
case
so
now I'm not done yet now we're running
into a new issue that had that I've
heard hit other areas before it came to
Greenville the Greenville Market is not
the hottest Market I mean Austin is a
much hotter Market than Greenville we're
not seeing 25% appreciation there are
other hotter markets and I've heard of
this phenomenon happening in other
markets to the extent that it hasn't yet
happened in Greenville until just
recently I feel like and that is that
buyers that have been in the market a
while right and they put offers on
multiple properties they have gotten out
bid multiple times and they're starting
to get fed up and desperate are now
turning the market into an arms race
and let's you know let's say you've been
you're a buyer and you've been out bid
two to three times and and you really
need a place to move for a variety of
reasons you're running out of space your
current house you got a bunch of kids
you need to move let's say you're
coming you're you're you're coming from
an area where you're rent is
astronomically high and you can get that
down a lot by buying a house here you're
relocating because you got a job here
what whatever the case may be you need
to move and you keep losing out on homes
that you're putting offers in on what
are you going to do the next offer you
make you're going to be a little bit
more aggressive you're going to make it
a little bit more enticing maybe you
wave that appraisal contingency you go
substantially above list price maybe
before you were only going 5% above list
price now you're going 10% above list
price 15% above list
price now let's say that house has
eight offers on it okay and thanks to
your aggressive offer you get it well
congrats that's awesome you you beat
the field which you know is hard to do
it's hard to do so congratulations but
guess what now there are are seven
buyers in the market who just got outbid
by you and they are more likely to be
even more aggressive with their next
offer and so on and on the cycle goes
it's an arms race now every house that
has multiple offers on it has multiple
buyers it is representative of multiple
buyers that are becoming more aggressive
on future offers so it's cascading the
market is is ratcheting up with each
multiple offer situation until this year
Asis offers and when I say as is I mean
offers where you forfeit your earnest
money if you find anything wrong with
the house you can if you do inspections
and you find something wrong with the
house you can't back out on the basis of
those
inspections those types of offers were
exceedingly rare and you almost never
saw them until fairly recently now
they are becoming almost normative we
are we are seeing a glut now and and
this is really to me at least in in
terms of of my clients really only
the past few months that now we're
seeing both on properties that I have
listed and and with clients that
are making offers that we're having to
go the Asis route in order for those
clients to have any shot any shot at
getting the house
because of just how much competition
that there is and and I hate it I hate
that for my buyer clients I love it for
my seller clients I I have a a
listing right now that has is about as
easy as possible because they've done no
inspections on it because they did it as
is and they were just like you know
we're not even going to do inspections
well great I mean that's the best case
scenario if you're a seller but if
you're a buyer it's it's it's really
discouraging you really have to take
that showing seriously and and I really
with my buyer clients I really try to
take it take it seriously where we look
at the house and try to identify if
there are parts of the house that
could be problematic that could
indicate that there's something wrong
with it so that we're in a position to
potentially wave the inspection
contingency H
unfortunately there is not really a
solution to this problem if that's what
you were about to ask me hey Stan is
there a solution to the problem at the
moment not really not really I I have
some buyer clients who aren't desperate
to move but would like to if the right
house comes on the
market but you know what the odds are
that there will be a
desperate more aggressive buyer putting
an offer on the same homes that they're
looking at and so the not so desperate
buyer that is hoping that this Market
slows down so that you know so that they
can can find something that not so
desperate buyer that doesn't really
want to get into a a bidding war doesn't
really have a choice I mean you have
you're going to get into a bidding war
unless a property is dramatically
overpriced and we're seeing in some
cases properties dramatically overpriced
are still selling in some very unique
cases so either you compete or you
don't there's no hey I'm just going to
submit a solid offer no there there
are no solid offers anymore there are
knock your socks off offers and then
there are offers that are simply not
going to have a chance at making it and
I listen at the end of the day I don't
encourage any of my buyer clients to
make an offer that they're not
comfortable with and I will submit an
offer on behalf of my buyer clients that
I think has only a 10 15 20% chance of
making it you you never know there are
times when those offers get accepted
and and I don't want to you know if I've
already shown the house to someone
you know that's honestly the hard part
that's what takes the most amount of of
work and effort if I've already shown
the house let's go ahead and submit an
offer it doesn't it doesn't hurt to
submit it but we do need to to consider
we do need to at least try to put our
our best foot forward with it and
whatever that best foot forward is I'll
represent my buyer clients on that and
and hopefully will get maybe perhaps
lucky on on something I have had
instances over the years not that long
ago I had an instance of this where
where I had a a offer of one of my
clients accepted where the seller said
and the listing agent said this was not
our our highest and best offer but they
really felt confident with with you and
with the way you presented your offer
and all of that and they they wanted to
move forward with this and so I
always tried to to even when I I'm not
confident an offer is going to be
accepted I always put my best foot
forward on that offer in order to
Inspire as much confidence as possible
with with the listing agent and
potentially with the seller and there
there are a lot of different ways to do
that we' discussed that in previous
podcast but it's tough if you're not
a desperate buyer you have basically
two options if if you're if you're
wanting to buy but you're like I'm okay
where I am you can either wait it out
until interest rates go up knowing that
probably prices are not going to go down
so you're going to be paying more most
likely or you can decide how
aggressive you want to be and find your
comfort level with being aggressive
because right now you have to be
extremely aggressive to compete to make
competitive offers Will the Market
self-correct well of course the market
always self-corrects in some way but
when there's a problem here and one of
the problems is that that Builders are
really really lagging behind and
that's usually who we kind of rely on to
help the market to self-correct and
remember we're seeing fewer homes on the
market now than in 2019 when 2019 was a
sellers market and we have substantially
more buyers now than we did in 2019 and
what's happening is these buyers were
not we're now getting a back log of
buyers imagine real estate is like a
restaurant it's the only restaurant in
town and it's got a 100
seats Loosely speaking I know that
not you know you have groups you can't
be 100% efficient but we're just going
to be theoretical here Loosely
speaking if there are fewer than 100
customers at a time at that restaurant
nobody has to wait again obviously there
will be some groups in there that will
want to all be at the same table but
let's just pretend like like that's not
the case 100 individual customers at a
time 100 seats we can be 100% efficient
if we have exactly the same number of
customers as we have seats but the
restaurant becomes more popular and
lines begin to form and as the wait
times increase people who are online are
getting hungrier and hungrier and you
know perhaps more aggressive with each
other but they also can't just leave
they don't have anywhere else to go
and so the line keeps getting bigger but
while let's say while this is happening
now some of the chairs and tables start
to get broken and now we have even fewer
seats but more people in
line this makes weight times and lines
even crazier so so what's the
solution the the solution isn't for the
restaurant to Simply fix the tables and
chairs now they have this massive line
even if they fix the tables and the
chairs that are there
they won't have enough places to seat
anywhere near the number of people that
are waiting to get into the
restaurant and so you actually need a
surplus just to to get back to the
normal weight time that it was before
the tables and chairs were broken you
need to get a surplus of more than a
hundred seats for the customers just to
go back to what that weit time was and
then to go back to the no wait time
scenario you you have to I don't know
double triple the amount of of seats for
for people obviously this is all
theoretical I don't have an actual
here's the actual number of people
waiting etc etc but I'm just trying to
paint the picture for you even if we go
back to 2019 inventory levels that's not
enough because we have a glut of buyers
that are in line right now that are
getting desperate and ratcheting up the
arms race and and and there's not a
clear solution for for when this is
going to
self-correct again new construction
has slowed down dramatically due to
covid we're having many many sellers
who are waiting to find the house that
they can buy before they attempt to sell
their house so that is also driving down
inventory levels it used to be that you
would put your home up for sale and then
go looking for the house that you wanted
to move into well guess what when
there's almost no houses to move into
nobody wants to list their home for sale
because they're afraid that they'll get
that under contract and then have
nowhere to go so there are fewer houses
on the market and it perpetuates the
cycle even more crazy
the the only two things that I could
see slowing the market down and I'm not
going to put a time frame on this
because I I just don't know I I've
stopped guessing
buyer
fatigue which mean which is When Buyers
just drop out of the market because
they're so exhausted with it and
mortgage rates starting to go up those
are the two things in the short term
obviously a global recession or
something like that you know which we
which are really hard to predict
obviously
could slow down the market substantially
but given current conditions given what
we know about new construction all of
that
really the only two things that I could
see putting somewhat of a damper on the
market is buyer fatigue and mortgage
rates starting to go up and I have
heard and seen some signs of buyer
fatigue in that Odd Lots podcast I
referenced they said that they're seeing
in some very very unique cases not
market-wide but in some very unique
cases that there are some markets
where they're no longer getting above
what a house is listed for but what
does that mean that's not happening in
this market you have to you have to
look at every Market differently
Greenville weathered the storm in 2008
2009 much better than New York City and
and San Francisco and those types of
markets did so I don't see that
happening in Greenville to the point
of of people listing their homes not
getting as much as they as they pre
previously had but I am seeing some a
little bit of buyer fatigue I've had a
few buyers drop out of the market and
just say we're just going to kind of
cool things off and just kind of just
kind of wait for the market also to to
cool off but then what happens when when
that happens what happens when the
market does start to cool down and those
buyers come back in will there be a
second wave I I mean nobody knows we
can't predict what exactly is going to
happen if and when mortgage rates go
up they will we just don't know
exactly when or or How High but how
long will it take for things to slow
down to get that glut of buyers through
you know how long will it take for
the restaurant line to finally dwindle
its way down that there's only five
people in front of you instead of 50
people in front of you how long will
that take we don't
know I'm hoping I I I think mortgage
rates will go up a little bit before
the end of the year I'm not hoping for
that but I you know not for my buyer
clients but I think that that will
happen maybe
maybe that combined with entering the
winter months will cool things off a
little bit a little bit again are we
going to see inventory go go back up to
May 2019 levels when it was still a
sellers Market I I don't think so I
don't think that's going to happen this
year so it's going to be a sellers
Market through the end of the year that
is going to happen it's going to be a
sellers Market well into next year we we
have so much self-correction that has to
happen for it to flip from a sellers
Market to anything close to an equal
Market I I can't see it flipping in
that way for at least two years that's
my that's just my opinion it it would
take there would be so many different
things that would have to happen for
that to happen that I just don't see it
happening and again with these with all
these buyers relocating from out of town
specifically to the upstate of South
Carolina these sleepy gen xers waking
up and realizing that it the time is
ripe for them to buy a house all of
these things converging at once you
know even if interest rates go up a
little bit is that going to just
cause those buyers to drop out of the
market even if rates go up into the high
three that's still very very low
historically very low historically my
first mortgage interest rate was
65% that wasn't that long ago that
was 10 years ago so rates are still
extremely low but we do see a
correlation between how low rates are
and how crazy the buyer Market the buyer
side of real estate is so we will see as
rates go up we will see a little bit of
a cooling off but it's not going to be a
okay now you know we're able to to
offer you know $115,000 below what a
house is listed for no that that we're
not going to see that for a while we are
not going to see that for for for quite
some time I believe so I hope that
that this is helpful to give you guys
some perspective I'm getting a lot of
questions what where is this Market
going what's it doing I wanted to study
it I wanted to research it I wanted to
provide as well a Harmony of of that
research with my own anecdotal
experiences that I'm having having and
so this is the episode where I did that
I hope that's helpful for you guys if
you have any questions let me know if
you have any real estate needs for sure
let me know rate review subscribe to the
show make sure you don't miss future
episodes I appreciate you guys I look
forward to hearing from you and I hope
you have a wonderful rest of the week
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