[Music]
Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in the
lovely Upstate of South Carolina I am
your host as always Stan McCune realtor
right here in the upstate in the
Greenville area the greater Greenville
area if you will and you can find all
of my contact information in the show
notes should you need to reach me for
any reason for anything at all but
specifically for your real estate needs
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would appreciate that today we're going
to be talking about the slowing down
of the market and I've got the
greater Greenville Association of
Realtors Market stats in front of my
face right now and this is something we
talk about from time to time the GG
publishes stats every month these stats
are not always highly accurate I find
that so the way it works is in
September they'll publish the stats
through the end of August and then in
in October through the end of of
September etc etc what I've learned is
that some of those stats as I've studied
them are very inaccurate for the most
recent month and so I tend to focus more
on
the stats from two months back so
really right now I'm I'm zeroed in on
July statistics from the stats that were
published this month if that makes any
sense at all I don't know why they
changed so much if it's just the data
just the flow of the data coming in but
that's just the way it is I've
learned that when they publish the last
month's stats usually in following
following examples of the stats that
come out usually that month will change
wildly and so I want to make sure that
the stats that I'm telling you guys
about is most accurate I think that
looking at July and then basically
extrapolating from that will be the best
way to go by the way I'm recording this
from a different location I normally do
I'm not in my home office where I
normally record I'm actually in my
office office and hoping that nobody
decides to poke their head into the
the door normally they don't
but if you if it sounds a little bit
differently that may be the case but
anyway let's Jump Right In it let's ask
this question for starters is the market
slowing down because there's a lot of
angst right now about it and the reality
is that yes the market is absolutely
slowing down now what does that mean
that simply means that it's not as
intense of a sell Market as it has been
and that simultaneously it also means
that there's just not as many
transactions happening that's that's
kind of the two things that that
means now what happens when when people
start getting angst about a Slowdown
there needs to be a few things kept in
mind one is that markets it's normal
it's cyclical for markets to slow down
there is a an inverse correlation
between the
retail Market get retails and stores
you know buying stuff clothes and toys
for your kids and things like that that
it goes in the opposite direction as the
real estate market does so you know as
everything's getting geared up for the
holidays Black Friday and all of that
and people are are buying all these
gifts and and holiday decorations and
and Christmas trees and Manas and all
these different things the exact
opposite is happening in the the real
estate world where fewer and fewer
houses are getting listed and fewer
houses are being purchased the the
bottom line is that fewer people want to
move or sell real estate during the
holiday season that is normal so we have
to first keep that in mind that there is
a normal slowdown and that starts in
September okay so let's let's keep that
in mind a little bit
additionally we have to keep in mind
that Co has still just made everything
weird we we don't know what anything
means in during this pandemic still
ongoing it's really hard to predict
what's going to happen in the future
and as well I think we need to keep in
mind
that really the main thing when when
people have angst about a Slowdown what
they're really worried about is that
there's going to be a correction a
correction is when the market flips when
it goes from being a seller's market to
a buyer's market when it goes from
being a buyer's market to a seller's
market whatever the case may be that is
what people are really concerned about
because when it flips then a lot of
people get left in the cold if it
flipped from a sellers Market to a buyer
market like
overnight that's when we're starting to
talk about a re a recession at that
point that's in essence what would
happen if that happened there would
be a lot of foreclosures it would
really be damaging to our economy and
so we need to keep all of these things
in mind as we're as we're talking about
the quote unquote slowdown but what does
the data say we're going to actually dig
into some of this data with that the
greater Greenville Association of
Realtors has for us to see exactly
what is happening is this just a
seasonal slowdown is it more than that
is it a little bit of the two I want
to first start by look looking at April
April was really the peak of the
madness and when I say Madness I'm I'm
talking about when it was the the
craziest frenzy of all when a lot of
people were selling a lot more people
were buying and you know it was 10 15
offers on anything that was listed
below
350,000 pretty much
in April new list listings went up to
19.3% increase year onye so April of
2021 had
19.3% more new listings in April of
2020 now let's bear in mind as well
April of
2020 was a little bit weird from the
standpoint
of that was right after lockdown and all
of that so a little bit weird there a
little bit weird there it it may not be
a complete Apples to Apples comparison
on everything but that said that's still
a big increase almost say 20% increase
in listings year- on-ear for the month
of April and that that was the
highest year- on-year increase that we
saw all year again a lot of that did
have to do with with the fact that
that Co directly
impacted things a bit here as
listings were down in April of 2020
probably from what we would have
normally expected to see
that said it was also a very big
month for pending sales so we're looking
at new listings we're also looking at
pending sales in both March and April
pending sales in the upstate and of
2021 were around 30% more than they were
in 2020 again had that with Co was a
phenomenon played a role contrast that
with July July and and and I would
say what also seems to be true of of
August even though again I I don't trust
yet the data for August I'd like to wait
another month but I I think that what
the data said for July is probably also
true for August we normally have by
the way before I discuss July we
normally have a little bit of a July
slowdown and then a little bit of an
August not recovery but a slight bump
back up in August that's a normal
part of of the cyclical Market here in
Greenville we've talked about this
before a lot of that has to do with
people going on vacation all of that
July 4th there's a big holiday it's the
biggest holiday of the summer and and
this year July 4th the way it fell some
people took vacation the week before
some took it the week after that had a
big impact there you go you can hear a
siren that that's something you don't
normally hear when I'm recording from
my home office so hopefully you guys
can can hear that and enjoy that I'm
I'm not driving I'm not being chased
down by a policeman that's just that I'm
recording from a different place I
got North Pleasantburg Drive right
outside right to the left of me right
now so it's a little bit a little bit
louder than normal but July had
the normal slowdown but we still saw new
listings up
7.4% versus July
2020 now that's actually very
impressive because July 2020 people were
no longer caring about covid and so
for and and so for in July of 2021 for
us to still have had more listings
because there were quite a few listings
in July of 2020 for us to have 7.4% more
in
2021 that's that's impressive that
shows that even though we had that
normal July slowdown it was still a
lot of people looking to
sell so if you contrast that with the
with the increase in April again the
year-on-year increase in April it's a
12% different April April was up
19.3% year on-ear and then July was
up 7.4% year on-ear about a 12%
difference here's where we see
something that I wouldn't say it's
caused for concern but it's worth
monitoring when you look at the pending
sales they tell a different story so in
April of this year year on-year
pending sales were up
29.4% versus what they were in 2020
April of
2020 in July of this year they were down
minus negative
15.8% in fact pending sales in July were
actually comparable to January levels
which is highly unusual highly unusual
because as I said before or I alluded to
it at least the winter months are almost
without fail the depending on what
you define as the winter months but I
would say generally without fail the
months of November through February are
these four slowest months of the year
for Real Estate almost without fail and
usually July isn't anywhere near in the
same category as those months but this
year for pending sales July was very
similar we had
1,361 pending sales in July of 2021
versus January we had
1,324 so that's close in in a lot of
ways
what then again remember we just said
that the new listings there is a
difference in terms of the year-on-year
increase of 12% from April to July well
if you look at these pending sales which
went from
29.4 to minus 15.8 that's from April
to to July that's a swing of going
down 45%
and again we're we're not saying that
pending sales in April versus July were
down
45% that would be crazy it's just the
year on-year
change was down
45% and I would just say as I
mentioned before it appears that August
and September just from what I've seen
and the data does indicate this a
little bit if it's trustworthy that
August and September were and have been
similar I I I wish I had reliable
data to demonstrate that but just
anecdotally I think that things are
similar we haven't seen as much of a
drop off in new listings although we are
the normal seasonal slowdown the normal
seasonal drop off but we're
seeing more than just perhaps a normal
seasonal drop off in demand and there
are some other we we'll talk about some
other things with regard to that here
in a little bit now is this a reason to
panic if you're a seller or if you're
just scared about a recession or scared
about a big Market correction
happening I would say no no I'm I'm
not scared about any of this stuff from
the standpoint of of a seller from the
standpoint of the the general economy
I still don't see anything that
indicates to me that there is some crazy
correction happening in the local real
estate market now I can't speak for
other markets this is a Greenville
podcast there I have heard that some
other markets have had a a a correction
happen every Market is a little bit
different and those markets don't impact
US unless it's like it becomes the kind
of thing where like all these markets
start having corrections but generally
speaking usually the market Market in
Greenville is different than it is in a
place like Denver or a place like Austin
even in a place like Charlotte it's
not exactly the
same when we're looking at this data
just looking at the new listings and
just looking at the pending sales you
can you can look at that and be like oh
man this this doesn't look good at all
like this looks like a big correction is
coming but you have to take other data
points into account one of those big
ones that we talk about a lot is the
inventory levels which tend to directly
correlate with the frenzy of the market
inventory which we measure on a
monthly basis should in a fair market
be around six months now Greenville
historically for several years has been
in between three and four months of
inventory that is
a mostly sellers Market and obviously
it's not a crazy sellers Market but it
is a strongly sellers Market
so and then the higher that goes the
more it goes towards a buyer Market once
you get into six seven eight months of
inventory now you're talking about a a
very very big buyers Market back
in you know
2010
2011 that was when it was the most
amount of inventory it hit that
eight-month level that was kind of crazy
that was when hommes were just
sitting for forever and you could get a
great deal on a house back then
not anymore in May of this year it hit
its lowest level that it ever has in the
history of at least since it's been
measured but probably the history of of
modern real estate in the upstate it
went down to 1.1 months now there are
some markets I've mentioned some markets
are way different than Greenville I've
heard of some markets that have been at
half a month worth of inventory I can't
even comprehend that because in May when
it hit that 1.1 month level it was nuts
around here I feel bad for the realtors
in in these markets that hit half a
month or or perhaps even worse so
what's it done since then well it has
continued to oh actually I'm sorry let
me correct one thing I actually made a
mistake before I said it hit 8 months of
inventory back in 2010 2011 actually it
was it was 13 months was actually
what it hit so it was even a lot
higher than what I said I I misspoke
there I I had a graph pulled up and I
pulled up I I said the wrong thing so
yeah at its worst it was around 13
months at its CRA its worse from the
standpoint of selling a house and
then this year it went to 1.1 month
since then every month it's crept up
a little so June went up to 1.3 July it
went up to
1.6
August this sheet currently says it's at
it was
2.2 I'm not taking that at face value
that is usually wrong the first
time they publish this so I'm going to
assume that that's wrong but we have
the two months following May that both
crept up all the way up to 1.6 months
of inventory so what does that mean that
means yes it
is creeping up and we are seeing a quote
unquote slowdown in terms of
demand but that is still a crazy sellers
mark it had never in
history been below two up until
2020 never
and so don't let that and actually I
I I say that I think it's actually it
yeah it was November of 2020 was the
first time that we we dipped below two
months of inventory so looking at this
and seeing Oh 1.6 months of inventory
yes that's a half a month higher than it
was in May that's still historically
unbelievably low this is you know a
phenomenon that we run into people
panicking about things that they
shouldn't panic about similar with
interest rates mortgage interest rates
you know people panicking oh man
mortgage rates just went from 3 to
3.25 in you know in a few weeks and
it's like 3.25 is still an unbelievable
rate like let's just calm down a bit it
it's not that big not that big of a deal
so I want to keep all of that in
perspective
and and I think that this is healthy
we knew that that that
pace was not going to to be able to to
sustain I mean that's that that could be
actually crippling to the housing market
if it just stayed at those insanely low
inventory levels
we need kind of some of that to to
ease off a little bit so that buyers
actually have a chance to to buy house
and we can actually keep the real estate
market
flowing and it's not like we're
seeing a change from 1.1 to 2.5
overnight again I said August it says
was 2.2 even if that's true which I
don't think it is I think it's lower
than that but even if that were true
we're still seeing a gradual over
several months trend of of Correction
and we need that we need inventory to
creep up a little bit to help out to
help out the market as I've already said
because it it it impacts things a lot
of different ways for instance buyers
a lot of buyers will just drop out when
things are when they're such a frenzy
like this they'll just drop out of the
market and those left will do
irrational things they will over bid on
properties for instance and then
immediately have buyers remorse and
so you as a seller if you are selling
real estate
it's it's not all bad news when you hear
that the market is slowing down a little
bit really think about it less as a
slow down and think about it more as
stability the markets are stabilizing a
little bit as they
should and I've already mentioned
that for several years the the
Greenville the greater Greenville Market
had kind of stabilized into a three
three and a halfish months of
inventory level
and that
is that is kind of The Sweet Spot what
we had for several years and we were all
comfortable with that for a while and
I don't think that there will be any
problem if it goes back to that I
don't think it would be any problem for
it to go to four or five months of
inventory you just have to shift your
expectations if you're buying or selling
when that happens and what we don't want
is for it to happen over night to catch
a bunch of people by surprise and then
that's when things could could go bad
when we could see a lot of foreclosures
see a lot of people not be able to sell
their homes
Etc so it's still just judging based
on on inventory it's still very much a
sellers Market but also looking at other
data points it's still very much a
sellers Market Days on the market still
historically low some of the lowest days
on market for homes that are being sold
that we' ever seen 21 days in July
which is the lowest that's ever been
measured and August they said it was
again this data might not be entirely
accurate but currently it's saying it
was also 21 days in the month of
August so un unbelievably low and that
indicates very much a sell's market and
on the flip side the median sales
price continues to be in the 12%
increase range in other words prices
market wide in the greater green roll
area are essentially going up 1% each
month that has been consistent for the
past year that has remained consistent
the past several months as well and so
again that is a just as strong of an
indicator as any of these other things
that the
market is slowing down in some ways but
it's it's also
staying kind of where it is in some
other ways so there is still some
there is still some volatility that we
perhaps can expect but there is also
indications that there are some things
that are holding stable and I'm not even
saying that all of those things are good
things you know 1% increases per
month is a really bad thing if you're
looking to buy but that's kind of
where we're at that's that's what we're
seeing
so what does all this means I've already
given some thoughts I'm going to add
some anecdotal experience to to go along
with some of this data in my
experience for for buyers purchasing
homes under
$300,000 under that price point it's
still crazy and and right now the median
sales price is is in like the
$270,000 range so once you get under
300,000 you you get you know at that
Point basically people competing for an
average is home roughly speaking
and it it's like diving into a shark
tank that under $300,000 price point I
mean it is still bidding war after
bidding war chaos upon chaos it's
nuts and those over 300,000 on the flip
side what I've seen are are are
honestly getting pickier so that's where
it is a little bit trickier to sell the
over
$300,000 price point buyers have
gotten
pickier and so we've seen that market
that part of the market slow down a bit
they aren't just submitting offers
for the sake of submitting offers we've
seen that for those in the you know 270
280 range I've seen Panic Panic
purchases so to speak people saying oh
man this house you know this is the
best house that's going to come along at
our price point we got to submit an
offer let's let's wave all the
contingencies etc etc I'm not seeing
that so much in the price point up above
300,000 I'm seeing people be a lot more
cautious and I think there's a reason
for that and I've alluded to this in
other podcast but I think that the
people at that price point are able
to afford a lot more they could probably
afford 400,000 and they're looking at
home in the 300,000 range but because
they can afford more they're going to be
pickier that's just the way it is those
looking in the 250 to 280 range that's
all they can afford and so since
there's very little houses at that price
point that's where all the chaos is
now to hearken back to what I said
before there are a lot of people out
there a lot of clamor a lot of news
articles saying that the market is
slowing down and making it sound like
it's slowing down dramatically that
we're
seeing like what I referenced earlier
that we're seeing a correction coming
and I think that that is an exaggeration
at least here in the greater Greenville
area but that said I suspect that
these headlines and the and these
Whispers going around will scare some
sellers into deciding to wait to sell
and I would not be surprised I would not
be surprised if we see a big drop off in
new listings in the upcoming months
that's even more than than the normal
seasonal drop off we haven't seen that
up to this point but just based on
you know what people out there are
saying that would not Shock Me sellers
may drop out because they're scared that
there is a correction happening and that
you know that they're not going to
get what they want for their house
and and there are some indications that
that has happened we'll just have to
wait and and get more data to see all
in all I think piecing all the data
together I think that what we're seeing
is mostly a normal seasonal
slowdown maybe it's a little bit more
than that maybe buyers are starting to
just get exhausted and have decided
just to kind of cool it a little bit
a segment of the market cool it for the
fall for the for the winter
season but I think mostly what we're
looking at is generally speaking a
seasonal slowdown some of the data
indicates that it might be a little bit
more than that some of the data doesn't
I think all in all you put it all
together it it seems like we're
experiencing by covid standards what
should happen this time of year as
things slow down a bit and this this is
what happens usually sales new sales
new contracts new listings Etc Trend
downward from September to December
every year that's always what happens
and then they start to creep back up in
January so that's happening again
this year all that to be said
Greenville is really a remarkably Stable
Market and and you know I mentioned
before how there are some markets that
had inv
go significantly lower than it went here
in Greenville Greenville even during
the worst part of the frenzy has not
been at all the craziest Market in the
US not even close and on the flip
side as well I've heard not just this
year but in past years that there have
been other markets that have cooled down
dramatically when Greenville hasn't so
Greenville just in general is more
stable what happened in the spring of
this year when things went crazy is very
unusual for the Greenville Market that
doesn't normally happen in our market
and and in general dramatic increases
or or
decreases don't happen in in any
direction with regard to anything in the
real estate World increases and new
listings and new sales and new closings
and days on market and
mediprice points going up or down
increases or decreases tend to be more
stable more gradual in the market they
don't typically tend to correct
overnight in the Greenville Market so
this may not get me clicks or new
listens or new shares or whatever but
what I'm saying is that nobody should
Panic I'm not I'm certainly not
panicking what's happening now is mostly
normal at least in so far as
this we have this new normal that is
this pandemic that has caused all kinds
of crazy things in construction and and
everything else and and you know
mortgage rates being weighed down
weighed down all these different things
um
it's still what we're seeing doesn't
indicate to me that there's something
major coming down the road it just seems
like people are are kind of taking a
break for the holidays
or taking a break for the fall and
winter seasons and I think we'll
continue to see that and then when
January comes around it'll start to go
back up and probably the spring will be
crazy all over again so keep that in
mind really that doesn't mean that
you should change your plans that just
means you should cater your expectations
if you're selling in that above $300,000
price point just understand you you're
probably not going to get 10 offers
right away it's just not going to happen
you might have buyers that come in and
that are kind of nitpicky on different
things these are things that you just
need to keep in mind it again just so
that you're not surprised that you don't
find yourself in a situation where
you're shocked oh I wasn't expecting
that I thought I was going to get 20
offers right away that might not be the
case you'll still sell your home it is
still a sell's market don't worry about
that if you're a buyer this is
probably going to be your best time to
buy for a while so keep that in mind
as well there's not going to be as many
listings to to choose from but you'll
have a better shot with them than you
probably will and you'll have a
better shot in the next few months than
you will early next year keep that in
mind as well that's it for today's
episode I appreciate you guys listening
there weren't any more Sirens that I
heard but but I hope the added
noise level wasn't a big deal but I
appreciate you guys tuning in I
appreciate appreciate you guys listening
remember to subscribe rate review
again my contact information is in the
show notes if you need to reach me for
any reason and I hope you guys have a
wonderful rest of the week
[Music]