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Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in
Greenville, South Carolina I'm your host
as always Stan McCune realtor right here in
Greenville and you can find all of my
contact information in the show note
show description whatever it's called in
your appif you need to reach out to
me for any reason that's where you can
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and help the podcast to get out to as
many people as possible today we are
going to be talking about the July
Market stats that the greater Greenville
Association of Realtors just released so
this we do this pretty much every month
usually by the middle of the month GJ
releases statistics for the month prior
and that gives us really a lay of the
land for what the market is doing the
statsfor the month of July were
crazy I mean they're just going in all
sorts of different directionsand so
I want to just jump right inwe're
going to start I'm I'm going to kind of
summarize it right off the bat and then
we'll actually look at at the stats
supply and demand are both cooling so
we're seeing that happening kind of
across the boardand by cooling I
mean really Supply is going upbut
maybe not at the pace that we would
expected to and then in some ways in
some ways it's going way upand then
demand is continuing to cool as well but
we're not seeing the market flip to
anything that resembles a buyer's market
or even a balanced market yet okay so
that is kind of me setting the stage
here for what I consider to be the the
analysis from from these sets for this
is that was kind of my en overview
50,000 foot view or whatever the the
phrase isfor what I'm looking at
here but what do the actual stats say
well we're just going to kind of go down
go down the line here new listings
new
listings th this was really interesting
so we have seen new listings pretty much
since March have been up year on year
and this has driven the supply going up
all right the fact that new listings
have been increasing year onye for March
for April for May for June June it
really spikedJune new listings were
up 18% year on year and I'm not sure if
that's a a revised number from last
month but 18% that was a huge number a
lot of people listed their homes in June
a lot of Builders listed homes in June
inome in contrast to previous years
but July actually went down year on-year
3.3% and it went down month- on-month a
lot so Juneof this past year the new
listings were
2318 in July of this year it was
1,999 that is a and and in comparison to
July
2021 that yearthat month was
2,67 listings and so listings went down
3.3% year on-ear so what does that tell
me that tells me that the market is
responding people are seeing that demand
is cooling due to interest rates and so
fewer people are listing their homes for
sale we could discuss more about the the
wise and all of thatbut I think in
general we're just seeing the market
responding this is what the Market's
supposed to do right when demand eases
then Supply is also supposed to ease
when things get out of whack that's when
we start to see either a crazy sellers
Marketwhen when demand is super high
and Supply is super low or a buyer's
market when Supply is super high and
demand is super low so we're seeing now
Supply responding a bit to the cooling
demandpending sales now this is I
always have to give this
disclaimerit's never correct at
least in my experience as long as I've
tracked these it's never correct for
the the most recent month which is the
month of July in this instance so we
always have to look at the month prior
so pending sales this is count of the
properties in which offers have been
accepted in a given monthwe have to
look at June because last month when we
looked at this we could didn't have
correct numbers for June so we looked at
mayso June of this past
year was very close to May it went down
pending sales went down
13.7% May was down
13.9% and so that number kind of it it
had been increasing basically each month
of the yearfor 2022until June
June was the first month that we saw
that gomoderate a little bit year
on year because again May was
13.9% decrease in pending sales and then
Junewasn't quite as big of a
decrease but very similarminus
13.7% pending sales so down
13.7%now remember pending sales had
been at at an all-time high last year so
for those numbers to come down is kind
of expectedbut what we're seeing is
is a little bit more than that actually
the decrease where pending sales were
for June ofof 2022 is actually very
comparable to what pending sales were in
June of 2019 extremely similar I don't
have the exact number but I can I can
see it onon the chart that I'm
looking at here they're basically right
at the exact spoton the graph and so
that's very interesting we've been we've
been waiting to see if some of these
numbers would start to reflect 2019
pending sales is right there pending
sales is starting toreflect 2019
prepandemic level numbersand you
know I wonder if it will kind of level
off at this being down 13 something perc
roughly 14% year-on-year number if
that's what you know once we getthe
statistics next month will know what
Julyreally had but I wonder if we're
going to kind of Flatline at this
roughly 14% numberdown 14% to be
clear down 14% year on year we'll just
have to
see closed salesthis is the count of
the actual closed sales in a given month
this this is one of the numbers that
pops out off the screen closed sales
were down 11.1%
in July now this is to be expected right
pending sales were down almost 14% in
May and June that had to be reflected at
some point and so here we go we're
finally you know the month of June we
had seen pending sales go down 4.1% that
wasn't year on year that wasn't that big
of a deal but July was down
11.1% year on-ear so that is a a
tremendous decrease that is the fir I
went back because I was curious I was
like okay when was the last time we saw
a double digit decrease inin closed
sales and the last time we saw that was
April and May of 2020 well what happened
in April and May of 2020 that was when
the market had come that was right after
the shutdown right that was right after
we had Co you know the 15 days to stop
the spread or whatever the whatever the
phrase was and so pendings pending sales
just got wiped out in March and April of
2020 and so then that impacted closed
sales the following month but then after
April and May of 2020 then those
closed sales just took off and just went
nuts so this is the first time the month
of July was the first time we had seen
double digitdecrease year- on-year
in pending sales since all the chaos of
the pandemic so that's a very
interesting statistic again the market
is cooling we are seeing demand cooling
that's that's one of the most important
metrics that we can
look at on
hereI'm going to I'm going to kind
of go out of order here so bear with me
as Iskip a few things and I'm going
to come back to them all right inventory
obviously this is one of the most
important metrics that we look at we
can't look at at July's months of
inventory because that is pegged to the
pending sales number but we will look at
JuneJune's month supply of inventory
was the highest it's been in a very
long time it was at 1.9 months I was
sayingI thought maybe it would break
into the twosfor the month of June
it did not happen but it came awfully
close 1.9 months I would certainly
expect July's number to be in the twos
so we'll just have to to wait and see
what does that meanthat means
we're still very much in a sellers
Market but that it's creeping up we've
not been in the twosin a very very
long timeit's beenlet's see here
it was October of
2021 was the last time we saw greater
than two months of inventory obviously
that was still very much a sellers
Market but this is this is good we need
more supply of inventory now if you look
at just the raw inventory number and I
can look at thisbecause this number
should be accurate it's not pegged to
that inaccurate pending sales number so
if you'll remember inventory has been
steadily climbing since May and again
this is directly correlated with
mortgage rates going upMay inventory
was up year on year
19% June inventory was up year on your
46.3% and now July it was up
70.3% year on year that is a Whopper of
a number 7
70.3% like I'm looking at the graph here
and it's just like shooting up and again
we are now very close to 2019 levels
we're not quite there yet but if if you
look at if you looked at the same chart
the same graph that I'm looking at here
you'll seeyou would see that the
2022 number is just a hair below the
2019 number so that's very interesting
nowwhy would inventory be close to
2019 but month supply of inventory isn't
particularly close to 2019 cuz 2019
month supply of inventory was more in
the 4 to 4 and A2 range whereas we are
more in the two probably to two and a
half rangethe reason is that demand
is still a lot higher than it was in
2019 so even thoughSupply might be
comparable if demand is still higher
then you're you're going to see less
months supply of inventory if that makes
any sense we really again for us to see
the market be comparable to what it was
pre pandemic we need to see that month
supply number get probably closer to the
the mid to high threesand and for
sure if we started to get into the fours
thenthen we'll know that okay we we
have reverted back to aa prepandemic
norm but the fact that we have basically
increased Supply and even though demand
is higher than it was in 2019 it's lower
than it was last year even though we are
seeing a cooling Marketnot all of
the numbers add up because I skipped
over a few of them and I'm going to
go back to these numbers the first one
I'm going to look at is days on Market
until sale now this is a very very
telling number this tells you how
quickly a home sells and it's the
average number of days between when a
property is listed and when an offer is
accepted in a given month that number
was at 19 now that's only down
9.5%year onyebut that doesn't
really matter because at some point you
have to reach like this number can't get
to zero like that's an impossibility
that it would hit zeroand so I think
what we're seeing is we're seeing the
floorof that number is in this
hovering around 20 range but that number
19 that's still the second lowest number
of all time and the lowest was June of
2022 so June of 2022 was 18 days on
Market until saleJuly is 19 days on
market and and so you know for some of
you you might be thinking well that
sounds like a long time I mean that's
like almost three weeksfrom when a
house goes under contract or a house
lists until it goes under contract yes
but remember this is an average and so
the homes that languish on the market
for a really long time and then go under
contract they really drag this number up
so we just have to look at it
historically the fact that it's the
lowest second lowest that it's ever Ben
tells me that homes are still selling
more quickly than they ever
have and and again now remember there
there's a very important caveat here
homes that are now languishing on the
market once they sellthen that
number is going to shoot up and I do
expect that to happen in in future
months that's something we definitely
have to monitor all right median sales
price this is one that we're obviously
following very closely and and you know
it looked like that number might be
starting to moderatebecause we had
been hovering around 20ish per year
on-yearmedian pricemedian sales
price increases and and this is really
how we trackyou know quote unquote
inflation which right now is a bit of a
buzzwordin real estate or you know
it's kind of a loose way to kind of keep
track of of how prices are appreciating
in the market what rate are they roughly
appreciating atand so we look at the
median that's the middle number in the
sequence rather than the average because
the average is is dragged up by the fact
that there are some expensive homes that
are that are sold the median is a more
accurate measure of what the actual
average price in Greenville is and that
went up to the highest number it's ever
been$ 37,39
basically the average house in
Greenville cost
$317,000and that is a
19.8% increase year onye now June had
gone down to 16.7% year on-year and I
thought maybe that number would continue
maybe July would be you know 12 or 14%
but no July went back up towhat
we've been seeing basically 20% increase
in the median sales price year onye and
also the highest of this year as well so
so that's a really fascinating number
the fact that Supply is increasing and
demand is cooling has not impacted days
on Market until sale yet and also hasn't
impacted the median sales price going
down we are still seeing the median
sales priceincrease at a record
rateanother one that I track very
closely is the percent of list price
received the percent of list price rece
received is the percentage found I'm
just reading this right off the right
off this document the percentage found
when dividing a property sales price by
its most recent list price again that
could factor that could have the list
price having been changed at some point
haven't been lowered or or perhaps
increasedyou take the most recent
list price and then taking the average
for all properties sold in a given month
not accounting for seller concessions in
other words if seller is paying for
closing costs this is this doesn't
account for thatas well all right so
basically this number was never above
100 until recently and for the month of
July it's still at 10.7% now that is a
pretty significant decrease year on-year
off the
10.2% that it was in July of
2021but that was insane that was
that was just an absolutely ridiculous
number that it was at 10.2% that's one
of the highest that we've ever seen on
herewe need that number to come down
just to help buyers out but it's still
well over 100%
100.7what it was pre pandemicwas
more in the 98% rangejust for
comparison so for us to see a more
normal Market we need that number to
really come down a lot and again I think
I think it probably will at some
pointso you look at these numbers
and it's like some of these these
numbers would indicate the market is
dramatically shifting but then other
numbers here are just like wow these are
just as crazy numbers from a from the
standpoint of it being a seller's market
that we have been seeing so so the
numbers don't all add up but I have a
few theories that I would like to just
kind of throw out there for you guys
one with regard to the high inventory
numbers going up 70.3% year onye crazy
numbermy Theory on this is that
these numbers are heavily inflated by
new constructionand that that was
kind of a theory that I came up with and
I was like well you know what I can test
that theory pretty pretty quickly I just
went inParagon which is the software
thatthat we use for our multiple
listing service here in Greenville I
went to Paragon and pulled up how many
active residential listings there are I
didn't do a lot of filteringI just
quickly how many active listings are
therethere were
2600 okay then I filtered by how many of
those were to be built under
construction or new never lived in so
all the various categories of new
construction and it came up with 11
1199 that is
46% of the active inventory almost 50%
of our active inventory right now in
Greenville less and and I bet if if I
had like taken out land and all of that
it probably would would be over 50% so a
basically
50% of what is on market right now is
new construction that is insane that is
insane
now I I also have a theory on what's
going on there I had personally a lot of
clients and I've heard this story over
and over again a lot of clients a lot of
people that were not wanting to go the
new construction route but eventually we
pushed towards new construction because
there wasn't anything else to buy and
alsoin in several cases maybe
they were these are people that were
putting offers in on resale homes but
could not get any offers accepted they
just kept getting out bid over and over
and over again and so what do they have
to do eventually they were just like you
know what I'm done with this I need a
house I'm just going to build I'm going
to go go to a build and go the new
construction routewell guess what
now that inventory levels are up Supply
is up demand is cooling people are not
having to go that route and so now we're
reverting back to themore
traditional buyer habits of them looking
for resale homes first and thenif
they simply can't find what they're
looking for then they go the new
construction routebut remember
builders
you know they plan things out they
they do everything like way in advance a
lot of a lot of their projections
whatnot they will do years in advance
they'll buy materials months in advance
and so Builders have had to kind of
shift gears very quickly here but they
can't it's it's like you know Dy trying
to do a U-turn with a massive 18-wheeler
you simply can't quickly do that it
it they their turning radius is not very
Nimble because again they're doing
everything to scale these big production
Builders and so what we're seeing here
is they are kind of caught in the middle
of all of this where they had planned to
to move a certain number of units
they had planned to build a certain
number of homes get them sold but now
they got stuck with the FED increasing
rates the way it has kind of
unexpectedly more quickly than was
anticipated now Builders are just having
their homes just sit and they have a
huge number of homes just sitting 1,200
homes right now in Greenville that are
just sitting therethat that they do
not have under contractand the
builders you know they they find
themselves in a bit of a tough spot here
homes built now the the homes that are
completed now or that are under
construction they were built with
extremely expensive materials now the
cost of some of these materials is going
down now but again homes that that are
being built now are being built with
materials that were sourced most most in
most casesa while ago and sothe
builders have these expensive homes for
salethey were expensive to build and
I think that they're going to find their
margins and Builder margins have been
quite good recently but I think they're
going to find those margins really
squeezedand they're going to
potentially reach a point where they
can't lower prices anymore we are seeing
some Builders lowering priceon on
some homes that are for saleso this
is a very fascinating DynamicI I've
also read not specifically in Greenville
but just Market you just Nationwide
that Builders are also seeing record
highs in people breaking their contracts
and I'm guessing the reason for that is
that people are either a no longer able
to affordthe the new construction
with rates going up or B they're seeing
oh there are other homes on the market
that I like better now than this new
construction I can actually get them and
so they're breaking their contract and
going for a resale Home Instead
there's another
interesting conclusion that I can draw
from from this databasically the
fact that we have inventory going up but
and and so Supply going up demand
weakening but still all these crazy
numbers days on Market super low price
point super high all of that
basically when a house lists there are
one of two things happening it either
sells quickly for a high price or it
just doesn't sell at all it just sits on
the market there's there doesn't appear
to be any more of this Middle Ground of
like a home that isn't in a bitty War
but stillyou know after a couple of
weeks someone comes along and buys it
that was what it was even even during
the pandemic I mean I flipped a house a
couple of years ago that was like that
where it came on the marketdidn't
get a bidding war but after a couple of
weeks got a good offer B basically at
full price and went under contract and
and the rest is history on thatbut
right now we're not seeing that we're
seeing either homes that are very
desirable just going under contract
right away for a high price or homes
just not going under contractand
so that that to me is is the the best
way of explaining why price are still
going up at a record ratedespite the
inventory situation moderating the way
it hasnow when these homes that
currently are just sitting on the market
when they finally do sell we're going to
seethese numbers really drop you
know the we're we're going to see days
on Marketgo way up as I already
kind of alluded towe will see the
the year on-year increases on medium
price point Come way downetc etc so
it'll be very interesting to see
once some of these homes once the
absorption rate increases and and you
know particularly now thatyou know
at least for the past month supply
started to respond the market started to
respond to the decrease in demand by
Supply going down if that Trend
continues then eventually these homes
that are just sitting will end up
getting bought up but when that happens
that's going to really dramatically sway
all of these numbers and make it it
might even make it look like we're
entering a buyer's market again we're a
long way away from a buyer's market
that's not happening anytime soon
right now we just want it to be a calmer
sellers Market but right nowit's not
it doesn't feel like it's calming
despite there being way more homes on
the market available accessible for
buyers than there has been in years it
still feels crazy there's still tons of
bidding wars and I have to wonder do we
just have this new Norm where people
have to panic purchase have to when when
the home that meets what they're looking
for comes on the market that they have
just been reprogrammed the past two
years that they just have to go nuts and
and immediately go after the home and
you know immediately put but a really
high offer very aggressive etc etc I I
don't know I don't I don't know what the
answer is maybe that is the case or
maybe it is that we that buyers just
need to learn that that old normal what
what has been the normal for the past
two years doesn't need to be the the
norm anymore but the problem is that I
can tell you that but and and maybe
you're just like okay well I'm not going
toI'm not going to be as aggressive
well then you're just going to lose out
on your home to all the other people
that are being aggressiveand so it's
kind of like what will it take for the
market to shift enough that people
realize oh I don't have to be crazy
aggressive anymore when when a whole my
like comes on the
market the only indicator that I have
seen personally from my own clients from
people that I talk to that would
indicate that that some of the consumer
sentiment is is starting to shift a
little bit is I have t talked to quite a
few people that are just like I'm not
doing the bidding war thingand up
until just recently my response to to
people when they said that was well
you're not going to buy a house
everything is a bidding warbut I
don't have to say that anymore people
can be if if people are flexible enough
with what they're looking for they can
theoretically avoid a bidding war
basically what that looks like is you
just wait to if a house is listed wait
wait a week see if it sells during that
week and if it doesn't then you have an
opportunity perhaps to go in without a
bidding warand so and and maybe not
even a week maybe just after the weekend
comes and goes the first weekend that
is on the marketyou know usually by
that point the Monday or Tuesday after
if they don't have offers then you're in
pretty good shape go ahead make an offer
you can probably avoid the bidding
war soit'll be very interesting to
see how these numbers change we're we're
we're seeing obviously inventory Supply
can't go up and demand go down without
it having a direct impact on on these
prices on these days on Market until
saleall these different things it
has to have an impact it has to moderate
those numbers at some point but so far
it hasn't sowe'll have we'll
continue to track it we'll continue to
see what happensit's going to be a
wild ride right we we
have a lot more year left in 2022 and I
think that it's going to really change
dramatically in the upcoming months all
right thank you guys for listening as
always my contact information is in the
show notes if you need to reach out to
me for any of your real estate needs
please subscribe to the show rate it
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and we'll talk again next week
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