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 South Carolina and you can
find all of my contact information in
the show notes if you need to reach out
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right today we're going to be
discussing the market statistics that
were released by the greater Greenville
Association of Realtors for the month of
September I typically do this a little
bit earlier in the month but for a
variety of reasons we didn't do that
this month and so we're going to be
getting to it now because I think
that there's some substantial things
that we need to discuss with regard
to those statistics before I get into
that I do want to apologize if the sound
quality is not as good as normal my
microphone appears to have completely
bitten the dust or I don't even know is
that a word is that the right way of
saying that it bit the dust I'll just
say it that way I have spent the past
two hours trying to troubleshoot it and
I believe I thought at first it was
the issue with my computer I did updates
I did all sorts of things and none of
those things worked and so I pulled out
my backup microphone which yes I do in
fact have a back backup microphone but I
have never used this before so I
apologize if the sound quality isn't
as good I'd appreciate if you guys could
could tell me if you noticed the
difference if you were okay with it if
you're okay with it I might actually
just stick with this going forward
anyway I just wanted to go ahead and
get out in front of that in case you
guys noticed the difference all right so
we're going to be going over to the
greater Greenville associations of
Realtors their monthly statistics for
for the month of September just a
reminder as always these stats tend to
be updated a bit and there's a couple of
them on here that we can't really
reliably look at for the month of
September because for some reason
particularly the pending sales numbers
just tend to be off for that month
and then they update them you know
later down the road but generally
speaking these numbers are Fairly
reliable and they give us an idea of
what the market is doing so I'm just
going to go down the list of the various
stats that we have on here first things
first the first stat on here is new
listings the account of the properties
that have been newly listed on the
market in a given month month and
this number was was kind of surprising
to me it was up year on-year
99.2% for the month of September I
was expecting new listings to start to
taper off but instead for the month
of September they went up when you
combine increasing and and they didn't
go up month- on-month I should say
that but the fact that they were up year
on year is very interesting
1,95 new listings for for the month of
September which is up from 1,744 year
prior I'm to be honest I'm not sure
what the deal is with that why there are
an increase in new listings happening
other than perhaps people are just
realizing okay the market is Shifting I
need to quickly list my house before we
you know we run into a situation where
we're in recession or something like
that perhaps there are there is a little
bit of panic selling going on but
but yeah so year on year 99.2% pending
sales this is again the number that we
can't look at the month of September for
because it's not going to be reliable
but we'll look at the month of August
because last month we couldn't look at
the month of August pending sales were
down 19.2% Year on-year big big number
that's the I mean the largest
decrease in a very very long time
now we can't explain that away as a
seasonality type of thing because often
times in August pending sales are
pretty good but they went way way down
year onye and they went down month-
on-month as well which isn't super
surprising because July can often in
our Market be one of the hottest
months of the year but year- on-ear
going down
19.2% this is what we've been waiting
on and so now we have let's see here now
we have 10 straight months of declines
and pending sales and that's going to
I'm I'm going to explain if I remember
I'm going to explain when we get to
month supply of inventory which is
pegged to this pending sales number
how this is all going to ultimately
impact our month supply I I'll explain
that here in a moment closed sales so
if you remember we had an uptick in
closed sales for the month of August
which was kind of surprising 1.2% year
on-year increase it finally came back
down to earth in the month of September
September you know with pending sales
being down 19.2% we had to see that
reflected in the close sales for the
month of September and indeed closed
sales were down
11.2% year on-ear for the month of
September so here we go we two of the
past three months because July was also
down 10.6% year on year two of the past
three months we have seen double digigit
declines year on year and and let's
see here four of the past 6 months we
have seen declines year on-year in
closed sales so this is what we're
expecting to see we are expecting to see
the market cool down it has to happen
right we have I I just saw a a graph
let me pull it up here on my computer
a graph that showed the 30-year mortgage
rate this is crazy January of 2022 3.4%
average according to Freddy Mack
February 2022 3.8% average March 4.2%
April
5.0% May 5.2 June 5.5 July 5.4 August
5.2 we had a little August dip that
was that was nice for for people buying
around that time then September 6%
October 7.2% so we have now jumped from
3.4% in January as your average 30 year
mortgage rate we've jumped all the way
in a 10mon span to
7.2% when that happens that impacts the
market it impacts the market closed
sales are going to go down pending sales
are going to go down we are going to see
this we discussed a few weeks ago
that there's a seasonality aspect to
that but also there is going to be more
than just a seasonality more than just a
seasonal decline in these things this
there are too many things at play here
to for us not to see it impact the
market so Clos sales and and and also of
course closed sales have been
historically very very high the past
couple of years so to have it come back
down to earth that's that's what we
expect to see I expect that we will
continue to see these closed sale
numbers dramatically lower year on
year because 2021 will probably
remain a record year in many of these
statistics for probably several years
is what I'm guessing days on Market
until sale this is a number that
historically has been between I mean
prepandemic it kind of fluctuated
between 40 and 80 with 40 being a
really low days on Market until sale and
this is a metric of average number of
days between when a property is listed
and when an offer is accepted in a given
month so historically 40 would have been
really low for this but the past year
it's been in the 20s and we are still
in the 20s September was at 27 but
that is a 12.5% excuse me as I adjust my
mic a
12.5% increase over September 2021 which
was 24 days so homes are starting to
take a little bit longer to sell but
they still are selling historically very
quickly but
this number is is going up so 27
days will as I've predicted in previous
podcast I expect that we'll be in the
30s sooner than later and perhaps
we'll be back up into the 40s sooner
than later we we'll have to monitor that
you know just to stay on that for one
second buyers attitudes towards homes
has to change right there there has been
a norm for 2 years now people have
gotten used to this 2-year Norm of house
comes on the market it's exactly what I
want I got to get under contract right
away I've got to offer above list price
all this stuff and buyers mindsets H
have to start to shift and and we are
starting to see that start to shift but
there's still a lot of people out there
that when when that home the home that
they believe that they've been looking
for comes on the market they are
immediately jumping on it and as
eventually you know probably
in the next six months or so buyers
and their behaviors they'll start to get
used to this new normal that there's a
lot more inventory on the market that
they don't have to immediately go under
contract that they don't have to
immediately put an offer you know the
first few days at home is on the market
and so once those mindsets shift then
we're going to start to see this number
return back to to something that's
more normal something in in the the
eventually the 30s and then the 40s and
and probably at some point next year
above the 40s maybe 50s and 60s so
that's something that we'll we'll
continue to monitor here closely that'll
be a big indicator of whether buyers are
adjusting their behavior to the
market the median sales price
obviously this is a this is a big one
right this kind of tells us what is
happening Loosely from the standpoint
of appreciation or
depreciation and we topped out in July
at $
37,39 we talked about that there that a
few weeks ago in the podcast that
seasonally we would expect the number to
drop off that
$317,000 high perhaps as low as 285,000
and that would still be within the
seasonal Norm so we're monitoring
this to see you know how far is it going
to go down and for the month of
September it actually bounced back a
little bit it it it had gone down in
August to 310,000 month of September the
median came back up to 315,000 so the
median basically it it's technically not
the average but we can for all practical
purposes think of it as the average
the median sales price in the greater
Greenville area right at 315,000 and
that is a
17.5% increase year on-year so we still
are not seeing a
major I don't even know how to
describe it we're not seeing the market
shift from the standpoint of prices
we're not seeing the a Slowdown yet
in appreciation which is really
surprising right all of you know all of
these other metrics would indicate this
but again I think buyers behavior
their behaviors still haven't completely
changed people are still able to sellers
are still able to
demand a lot for their homes it's
still very much a sellers market and
we're seeing that from the standpoint of
the prices that that that prices are
still staying strong they're still
growing year onye and staying strong
month on month so we'll have to monitor
this I I my hunch is that it will go
below 300,000 or maybe I shouldn't say
below 300,000 I I think that there's a
good chance that goes below 300,000
before the end of the year I I think
it'll at least I I I would put it at
probably 80% that it will go below
305,000 and then we'll just have
to see if it if it actually goes below
300,000 that that's going to be
something that's very interesting but
but very interesting that that price
growth is still happening that year-
on-year number that's the most important
thing that's more important than
month on month even though it was up
month- on month from August to September
so we'll definitely keep tracking that
the average not as important of a number
because that's weighed heavily by
prices on the top end of the market but
the average went up 11.4% year on
year
362,000 now where we finally start to
see some of the most dramatic effects of
the shifting market is when we get to
this next statistic which is the percent
of list price received and this is the
percentage found when dividing a
property sales price by its most recent
list price then taking the average for
all property sold in a given month not
accounting for seller concessions I'm
not going to I've explained that in the
past I'm not going to explain all that
but basically you need to to think about
this is what can a seller basically
expect to to receive when they list
their house if they list their house for
$100,000 they and and if this number
were 100% they would expect to get
$100,000 for listing their
if their house was listed for 100,000
they would get 100% of what they listed
it for historically pre pandemic this
number hovered in the 98% range so that
was what historically we saw but what we
have seen the past year has been this
number off the charts often times over
100% for most of this year it's been
over 100% And then we finally saw it dip
back below 100% for the month of August
it went down to 99.6% % I don't
remember if that was the number that we
had when we went did these statistics
last last month remember some of
these numbers get updated but as of this
month's Market statistics for August of
this year it was 99.6% so it finally
went below 100 which is normal again it
was around 98% which is good it's good
for sellers to be able to get 98% of
what they list a house for but that
was what the normal was before the
pandemic and for the month of September
we had a huge decrease from remember
it's been over 100% for almost the this
entire year and for basically all of
last year and it went down the month of
September to
98.8% so if you list a house for 100,000
you could expect to get
988 th000 for that house so that is
that's a huge decrease because September
of 2021 it was 10.4% people were getting
on average above what they listed their
house for now people are getting on
average something that resembles what
was what's much closer to pre pandemic
98.8% so that's something again we're
we're seeing the market shift but this
is really out of all of the numbers that
I'm looking at this is the one that
tells me okay things are starting to
normalize and I'm seeing this personally
I'm see seeing a lot more scenarios
where buyers are able to come in
below list price and get a home under
contract now is that the norm no I think
that this number is heavily weighted by
the homes that are just overpriced and
you know in the past a home might be
overpriced and it would sit for a while
and then eventually with the
appreciation being crazy you know
when you get 20% year- on-year
appreciation you're getting two to
three% in some cases in some months
month- on-month appreciation if you
overprice your home and it just needs
to appreciate by the market just
needs to appreciate by 4% to get to what
your what you you listed your home for
then eventually you could theoretically
get what your home is listed for right
so if you list a home for $100,000 but
it's only worth 95,000 you only need it
to appreciate a little bit the market to
appreciate a little bit for that home to
be worth 100,000 is what I'm saying
well now that Dynamic is no longer
happening because there's so much more
inventory than there was before so now
these homes that are being that are
listing overpriced they are having to
reduce the price and oftentimes also
take less than what they have the
house listed for whereas in the past
these these months in 2020 21 and
earlier this year when it was above 100%
that was also a a crazy number
because there were so few price
reductions and price reductions aren't
accounted for in this number so now
we're seeing a lot more price reductions
and we're seeing sells are not getting
100% anywhere near 100% now 98.8% is a
lot different than 100% but this is
healthy this is this is more what we
expect the market to be now if we start
to see that number number go below 98%
then we're going to start seeing
something that resembles
really well beyond the norm at least
what has been the norm since roughly
2017 so we'll continue to track that and
see what happens housing affordability
index still very low this is the
index that measures housing
affordability for the region for example
an index of 120 means the median
household income is 120% of what is is
necessary to qualify for the medium
priced home under prevailing interest
rates a higher number means greater
affordability prevailing interest
rates are high home prices are still
going up at a clip of 17 point
something percent I I already forgot
17.5% interest rates are at 7% and
people's wages are not increasing to
account for all of that and so this
housing affordability index is quite low
it's at 75 which is tied for the
lowest it's ever been it's been hovering
it's been bouncing back and forth
between 75 and 76 basically the past
five months so the median household
income is only able to qualify for 75%
of the median house so that's
unfortunate we would we would like to
see housing
affordability be a lot better but
right now it's it's not what we'd prefer
it to be now inventory inventory of
homes for sale the number of
properties for sale and active status at
the end of the given month again this
is a number that jumps off the page
3,978 homes for sale in the month of
September at the end of the month
that is an
83.6% increase the largest increase
that I can see I I think it's the
largest increase inre on this entire
chart going all the way back to 2008
83.6% year-on-year increase it was
2,167 in September of 2021 and now
it's it's jumped it almost doubled to
3,978 and compare that to what it was in
earlier in the winter in March it was
1,46 so I mean we're not that far away
from tripling the amount of inventory we
had in March so this is now very very
close to what it was pre pandemic pre
pandemic it was hovering around the
4,000 range and right now I mean
we're basically there
3,978 so once we have a sustained period
of this being in this range or perhaps
higher I suspect this number will
probably end up going going up perhaps I
mean based on the fact that it's already
at
3,978 based on the fact that new
listings are happening at a faster clip
than we would or or higher clip than we
would expect it to we may see this
inventory number go into the 5,000
perhaps the 6000s which would take us
back to you know basically 2014
2015 levels of inventory and if
that happens then obviously we'll have a
a big shift that happens in in the
market so we'll have to keep keep
track of that month supply of inventory
this is the number that is pegged to
inventory of homes for sale at the end
of the given month divided by the
average monthly pending sales from the
last 12 months so remember pending sales
for the for the most recent month are
never accurate in the GG Market stats so
we can't look at the month of September
what we can look at is August which was
up 64.3% year on year year because
month supply was only at
1.4 for the month of August in 2021
and it jumped up to 2.3 the month of
August 2022 and we've seen a steady
increase in this since April every month
since April had it this number has gone
up so in March it bottomed out at one
month of
inventory April 1.1 May 1.3 June 1.8
July 2.1 August 2.3 I would expect
the month of September will probably be
2.5 we're seeing a point basically a. 2
to. 3 increase in month supply of
inventory pretty much every month and
just based on some other things that
I've seen I expect that the month of
September will be roughly 2.5 his to
put that in historical context we
were pre- pandemic hovering around the
three to to four month inventory range
so I anticipate you know if we
continue this 0. 2 to. 3 per month
increase then I expect that either by
the end of the year or early next year
we will be in the
threes and and at that point then
again we will see something that
resembles something pre pandemic
now and and and actually the I I almost
did forget I told you guys I might
forget I almost did there is an
interesting thing with with this number
that I want to point out that will so
you might would be surprised that it's
only going up you know 0. 2 or. 3
despite all of these other changes that
are happening although obviously the
year- on-ear increase is 64.3% but
the month- on-month increase isn't that
big when are the big month- on-month
increases coming oh they're coming
they're coming because the pending sales
number let me let me pull this up here
the pending sales are so the that
month supply of
inventory sorry let me go back and and
reread this again it's divided by the
average monthly pending sales from the
last 12 months okay why that's a very
very important detail because we are
still within the 12 Monon range where we
saw big big pending sale numbers
at the end of last year well once we get
past October and November of last year
every month since starting with
December has had a year-on-year decrease
in pending sales and obviously we're
seeing a big decrease in pending sales
now and so what I anticipate happening
is once we get past past November of
this year this number is going to take a
big big jump up so
actually I I kind of misspoke a little
bit before I do anticipate it'll go
up 0. 2 to3 for the month of September
probably again same thing for the month
of October probably again same thing for
the month of November that'll take us
probably to about 3 months inventory but
then based on the pending sale
numbers being low from December of
2021 and probably through December of
2022 we might see this month supply of
inventory number jump way up it might
overnight you know basically from
November to December go from three to
perhaps four four and a half or five
and again that will that will really
take us to way way pre-pandemic levels
of inventory and I've said in the past a
lot of that inventory is new
construction now I read something
recently that new construction tends to
bounce back more quickly than resales
so I'm not exactly sure you know we're
seeing some things that we've never seen
before in the market this is such a
strange environment for the housing
market so nobody really knows exactly
what's going to happen but but we'll
be keeping track of this every month
that's why I make sure that I always do
an episode every month where we look at
this and I know that I have a lot of
listeners that are into this if you're
not into into it I'm sorry I'm going
to keep doing this because a lot of
people are interested in
it there's some other interesting
things when we look at closed sales
based on rolling 12-month total
condos are up 2% from year on-year in
terms of closed sales and single family
homes are down 7% so that's not super
surprising because a lot more condos are
being built but you know people don't
have to buy them just cuz they're being
built but people are buying them the
it it's obviously a much lower number of
people buying condos than single family
homes but the number is increasing year
on-ear whereas the purchases of single
family homes are going down and a lot
of that is just pricing condos are
cheaper and single family homes are more
expensive two-bedroom homes are up
two bedroom or fewer purchases are up
99.5% again people feeling that squeeze
this is what that housing affordability
index being at 75 this is what happens
people are having to buy two-bedroom
condos when you know three years ago
they could buy a three-bedroom house
and so
unfortunately this is just a product
of of the way the market is so we're
going to see some some really big
shifts Happening Here we we are still
very much in a sellers
Market but if we start to see those
month supply of inventory numbers if if
it exceeds five we could very quickly
find the market flipping to something
that is more of a flat Market if it
exceeds six then we're into buyer Market
range I don't anticipate that just yet
we need to see a lot more happen on
on the we we need to see what happens on
the The Meta economic landscape and I've
talked about that in the past right
now demand in the Greenville area is
still very strong in fact I
compared some of these numbers to some
of the national numbers and again these
numbers are way more stable in
Greenville than they are on the national
landscape the national landscape you
look at Cas Schiller and some of the
numbers that that that they have the
decreases the home values are going down
in in on average in the country on a
nonseasonal basis okay we need to we
need to be honest about that because
that can ultimately impact us home
prices in the US are going down they are
depreciating the past few months
because that there are some charts that
that take the seasonality out of it
but in terms of the Greenville Market
Greenville is more resilient we're not
seeing that happening not yet at least
and so we will we'll keep track of
that but I appreciate you guys listening
with me with my new microphone let me
know how that sounded and as always
if you need to reach out to me all my
contact information is in the show notes
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have yourself a great rest of the week
and we'll talk again next time