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 the Greenville area you can find all of my contact information in the show notes if you need a realtor in Greenville or in the Greenville area in Spartanburg and Anderson and Easley all these areas around Greenville I can help you out I'm your guy please reach out to me all of that contact information is in the show notes and just a reminder as always if you're listening to the show and you're benefiting from it please hit the little subscribe button please scroll down in your Apple podcast app and hit the festar rating and leave a short little review that would really help me with the show I've gotten several of those that have come in the past couple of weeks so I appreciate that the more we can get the merrier because I appreciate you guys and I appreciate hearing from you guys and and seeing those reviews and ratings come in today is an unscripted podcast for me where I'm just going to kind of just discuss here as we are ending the year ending 2022 and going into 2023 I want to just kind of say what I'm thinking just what I'm thinking in terms of of reviewing the past year and looking forward into the next year I literally have done basically no prep for this podcast of course I'm recording this the day after Christmas kind of a kind of a crazy week getting ready for Christmas and all of that so you please forgive me if I'm a little bit scatterbrain in this show but this was kind of what I plan to do all along for this episode was to just kind of talk about what I'm seeing what I have seen what I anticipate for the upcoming year so let's just start real briefly by talking about what 2022 was like 2022 was a tale of really two years baked into one and it all comes down to mortgage rates when mortgage rates went overnight basically I mean it feels like overnight from being in the threes to being in the six and sevens that completely changed a ton in the real estate World obviously the beginning of this year very very busy the first half of this year super busy for everyone the latter half of this year and particularly the last quarter it has slowed down a lot for everyone and specifically for me with my business as a realtor I'm seeing a lot more activity amongst investors than what I have seen the previous couple of years and really a a lot of people that were in buy mode for or potentially looking to move a lot of those people are just kind of in wait or appear appear to be in wait and see mode trying to figure out okay what's going to happen as we go into the new year are we going to see rates come down are we going to see a recession are we going to see prices go up or go down a lot of people just kind of staying tight and just kind of waiting and seeing what is going to happen and so as a result really everyone is seeing the market slow down right now and I think I've mentioned this before on previous episodes but we're seeing just any sort of like mail that's coming from like birkshire hathway home services corporate which is I'm realtor with cdan Jord Realtors which is a part of the Burkshire hathway Home Services Network emails are coming from them that are saying how to prepare for the upcoming recession my company you know recent meeting was all about a companywide meeting was all about how to survive the the upcoming months there's a lot of trepidation out there in the realtor world right now because we know what's going to happen we know that there is going to be you know we've had a few very fantastic years of real estate from a realtor perspective but this is going to be that was the feast this is going to kind of be the real estate famine as it were potentially these upcoming months maybe even years we don't know that's that's where the trepidation comes in and as we're looking forward to 2023 a lot hinges on whether we go into recession and I think most experts anticipate that there will be some sort of a recession and so perhaps maybe I should phrase it differently that a lot comes down to not just whether we have a recession but how bad is it you know I saw recently Elon Musk whatever you think about him this isn't a podcast about him but he thinks that we're going to have a severe recession coming up here in 2023 I've seen others that are kind perhaps more experts on the economy than he is who believes that we will have a mild recession that we will have some sort of a recession it'll be mild I've seen others that think you know what hey it's going to the economy is going to slow down but we're not going to have your traditional sort of recession so there are several different schools of thought right now and all of these things directly impact real estate because obviously when unemployment goes up that means fewer people can buy houses and also if we go into recession that could then signal the FED then lowering interest rates because they've been raising them in order to combat inflation and if that happens then we could see mortgage rates come down as well either way I think that there is a really good chance that mortgage rates do come down pretty substantially here in the next year I think that they're a bit artificially inflated I'm not going to get all into the weeds on that but basically in a normal environment even with what the FED has done we would expect mortgage rates to be more in the fives rather than in the sixes I think lenders are being very conservative right now and I wonder if once we get into 2023 if that will change a bit once we have more of a sense of what the economic climate is and so this leads me to kind of what I'm thinking personally going into 2023 here's kind of what I'm expecting I'm expecting the winter months to be pretty slow I think that that's just going to be what's going to happen we're not just having fewer buyers which is to be expected but we're also seeing fewer sellers I'm looking at the market stats that were published by the greater Greenville Association of Realtors earlier this month earlier December to cover the month of November we're not going to go through these in as much detail as we typically do but one of the pieces of data that really stood out to me was that new listings for November were down year on-year by 6.6% that's interesting because we already know we've already been talking about how closings have been down closings were down for November 18.5% year on-year the the largest decline that we've seen in quite some time but what we're seeing here is both buyers pulling back so both demand lessening but also Supply is lessening so what we have is fewer buyers and fewer sellers and that might seem at first glance to be like okay yeah that that's normal because a lot of people that are buying are also selling well actually traditionally they are tied together to a certain extent but often times one of them kind of stays more constant while the other one really shows bigger increases or decreases right now we're just seeing big decreases on both sides on both the buyer and the seller end of things so that just means that the market is going to slow down it makes it difficult more difficult if you're looking to sell we are still in a more of a sellers Market type of environment obviously not what it was a year ago but but it's still more of a sellers Market than a buyer market for sure but what we're seeing is it's more difficult to sell than it was a year ago but it's in a lot of ways more difficult to buy as as well you would think okay with the market correcting it should be easier to buy right well no not if fewer people are listing their homes for sale that just exacerbates the issues that we've already had of supply and demand being out of whack if demand goes down but Supply also goes down then you still have the problem of you know whereas in the past supply and demand were really high so you had a lot of Homes at your disposal that you might be interested in but you were constantly getting out bid for them well now the issue is there's just not a lot of homes for sale and so you're not even finding homes to even make bids on that's what we're seeing a lot in this market right now I predicted this a while ago but the homes that or fixer uppers that are that are listing on the MLS that aren't listing for dirt cheap those homes are not selling you cannot just list a fixer upper and expect someone to come along and buy it and fix it up on their own dime people are expecting things to be nice to look nice to be TurnKey and this is how the market is Shifting now what I think is a very good potential outcome I'm not going to guarantee it but I think what we could see is mortgage rates coming down at some point in the spring or summer and what I think is going to happen is that the market is going to knee-jerk there's going to be a knee-jerk reaction that's going to happen as a response to those rates coming down because what we've seen the past 2 to 3 years has been unlike anything I've ever seen I've been a real estate investor since the early 2010 and I've been a realtor now for almost 7 years what I have seen is unlike the past couple years is unlike anything that I have ever seen before which is that normal retail buyers and sellers of homes in other words homeowners looking to potentially move they are treating real estate in a sense like the stock market the real estate has become it's always been to investors kind of like the stock market right but more so than ever to non-investors of real estate to people just looking to buy or sell their own personal home real estate is becoming similar to the stock market how it's because people are monitoring these things like these mortgage rates and are having knee-jerk reactions to them so we just saw this recently because mortgage rates went up into the sevens and then they immediately receded back down into the sixes when they receded back down into the mid to low sixes IM immediately mortgage applications went up Nationwide I'm not saying specifically in Greenville I'm saying Nationwide we saw that happen and so people I think if those mortgage rates if if it falls back into the fives I think people are going to panic and be like okay we got a strike you know mortgage rates may go back up and they're going to panic and mortgage applications are going to go up people are going to start looking at housing again and if it coincides with what is normally the busy season anyway we could see a big spike happen in the spring or summer I think that there's a very good chance that that does happen now on the flip side like I said a lot hinges on whether we go into some sort of deep recession if that happens then all bets are off but for me personally I believe that the Greenville Market is resilient the green Ville Market and in in really South Carolina as a whole I published on my Facebook page recently some stats that basically broke down a bunch of different markets I think there were like 30 or 35 different real estate markets and how much of a drop off there's been in closed sales for all these different markets and South Carolina had the second least drop off in other words it was the second most resilient area and included some states and some Metro areas the second most resilient in terms of closed sales so so it still had a big drop off I believe the number was was 28% was down 28% but in comparison to some of these other markets South Carolina was a lot more constant and this is this is what we see in the state and this is what we see in Greenville as well we're seeing this with pricing I been saying on this podcast I'm closely following the medium price point to see if it goes down seasonally below what I would expect it to seasonally we always see median price points come down this time of year and that's for a variety of reasons it doesn't necessarily mean that real estate is getting cheaper part of the dynamic there is fewer expensive homes pricier homes fewer of them are going under contract and selling this time of year but generally speaking we see a little bit of a dip in the median sales price and what I've been watching to see is if that dip goes below 285,000 if it did that then to me that indicates for a variety of reasons that we're now seeing prices go down in comparison to the normal seasonal averages well in November it actually went up month- on Monon from October to$ 303,000 240 that was an increase month- on-month it was an increase year on-ear of 6.4% now 6.4% that is the lowest increase year on-ear that we've seen in a very very long time and that number now is starting to look very comparable to to what prepandemic sales price appreciation looked like so we are starting to see things normalize a bit but what we're not seeing yet is that we are shifting into a buyer Market or that we are shifting into prices going down I keep seeing people wonder and ask our prices going down that hasn't happened yet and with sellers now pulling back and with Supply now being pulled back off of what it could have been I think that that's going to cause prices to probably stabilize a bit here versus actually seeing prices go down depending on where you stand whether you're wanting to buy soon or sell soon that might be good news or it might be bad news but I think it's probably better for the market as a whole to have a a gradual slowdown than a complete flipping of the market we've already had enough of a flip that has happened the past several months mons so I think if we if we did the full flip from a full-blown sellers Market to a full-blown buyer Market I think that that would be an incredible System Shock that would leave a lot of people out in the cold both literally and metaphorically so I think it's best if we have this more gradual slowdown that we're seeing but my point is that we are not seeing at least not yet prices going down in a way that is outside of what these seasonal norms for the Greenville Market would be at least the way that I understand it so we have an interesting Dynamic at play here where if we look into the future I think we could have a very slow first quarter of real estate for this year and I think we could have a very busy second and third quarter if things play out right and I think that there's a very good chance that things do play out in that way so these will be things that we'll have to monitor very closely for 2023 but for me you guys know if you know me that I have rental properties I flip houses on the side it's not something I necessarily enjoy doing but it's something that I have carved out a niche for and it's something that I'm good at and so I stick with it I'm not a High Roller in terms of you know flipping incredible volume I I've met with someone recently that is currently flipping 15 houses right now I I don't do that type of volume I I'll usually take one two three at a time if that but right now I am in buy mode because I truly think that there is some opportunity specifically right now if you can find those opportunities but I'm I am personally seeing opportunities on the investment side of things that I haven't seen in years and that has me very excited a and it's an indicator that investors right now are and and I'm seeing a lot of indications of this but investors are playing it very safely right now and so for those that want to invest in real estate and are willing to be aggressive this is a very interesting time to be aggressive and I and I'm choosing my words carefully because I can't give investment advice but for me personally I find this to be a compelling time to invest even on shortterm things like house flipping because if if the scenario that I'm outlining is correct then properties that you purchase now and then flip in the next couple of months those could be hitting the market right around the time that the market really starts to heat up and it should I mean again what's weird about what has happened right now in in the current market is that we had all of these interest rate hikes at the same time that we have the normal seasonal slowdown so parsing between what is seasonal versus not seasonal is all of the game right now but what we know for for sure is that seasonally we will see things kind of bottom out this time of year right these next few weeks are always the bottom of the real estate year right and then in February it starts to tick up in March it starts to tick up and then April it really ticks up and then we've got that April May June crazy season of real estate that we have every single year and so even if the market is still suppressed right even if we still have less of a of an excitable real estate market than we have in the past and we for sure it for sure 2023 isn't going to look like 2022 or 2021 or even 2020 type of of numbers it's just not we're not going to have those types of closing numbers that we had in those years but whatever 2023 looks like it's going to be those spring and summer months that are going to be the busiest of the entire year unless we have some kind of a very bizarre scenario where the FED and and Banks end up dropping rates way back down into like the the threes maybe the fours again I don't see that happening this year so I think that we'll just see a normal seasonal slowdown perhaps obviously it's a little bit more than seasonal right now and we'll have the the normal seasonal build and what could happen is that normal seasonal build that happens into the spring and summer could actually be increased by the fact that mortgage rat could be coming down around that same time so it could have kind of a cascading effect so that's what has me interested about buying now I think that there is kind of a unique window of opportunity for less competition even if that also comes at the cost of there being fewer houses to look at and so that's kind of where my headp space is right now going into 2023 specifically in the Greenville Market remember I always say this any opinions that I have about real estate the they are Greenville opinions I don't know anything about real estate in San Diego I don't know anything about real estate in Chicago or New York or any of these other places Texas I do real estate is very local and very Regional I know Greenville really well I don't know you know if you're listening in in from another Market I can't speak to what your Market is going to do in 2023 and as it is I'm I'm only giving my best guess as to what is going to happen in Greenville in 2023 but I have a pretty good track record you guys can go back and listen to old episodes the sound quality might not be as good but you can go back and listen to those and and see that generally speaking I have a pretty good track record when it comes to making these predictions and I'm and I feel I feel good about what I'm seeing right now in the market and what that means for the future m I'm not worried about what's going to happen in real estate this upcoming year I think that there's is going to be a a lot of exciting things and for me as I already said I have a lot of my investor clients right now coming online that have kind of been offline for a while and that's one thing that I have worked on so much over the years and has been a big niche of mine is working with investor clients so I am Diversified in terms of my real estate work and in terms of of my client base and so that really has helped me over the years to weather the storms because real estate fluctuates greatly and we had a a period in 2019 where this happened where things started to kind of decline faster than we expected it to seasonally and people were were kind of bracing for a recession then and guess what then Co happened we thought okay real estate might be deemed non-essential we might be in real we might be out of work and instead the opposite happened instead real estate in South Carolina was deemed essential and then it just took off and it just resulted in a crazy couple of years so it's really hard some of these things are really difficult to predict at the end at the end of the day but I feel honestly really excited about what the future brings I think that a lot of my buyer clients are going to find some good opportunities and I think for those that are kind of on the fence with whether to buy or not I think the conventional wisdom out there is that rates have come at or near their top and that they are most likely going to come down at some point here in the future and so what that means for a lot of people is that that this might be this could be the best opportunity to buy while competition is light and you might have a higher mortgage rate right now but then you have the opportunity to refinance in 6 months or a year or a year and a half some new home builders are offering low interest rates for people that are willing to to purchase their inventory because home builders have gotten crushed by this Market shift right now so i' I've seen some home builders that are offering an introductory mortgage rate for the first year of 3.99% and then that goes up in successive years but the the thinking is that if you lock it in for that first year at 3.99% and then a year from now or perhaps two years from now you'll have that opportunity to refinance to a a a locked 30-year rate that'll be probably in the in the fives perhaps in the fours and so there's a lot of interesting things out there by the way I represent clients with new home builders as well that most new home builders the vast majority of them are willing to at no extra cost to the buyer allow them to have a realtor and then trust me you should have a realtor when you're purchasing new construction there's a variety of reasons for it but the builders will there's a lot of subterfuge that happens with new home construction and they won't tell you the whole story having someone on your side is helpful so that's just an aside um if you're looking at new construction I for sure can assist you with that and it will almost certainly come at no cost to you because these Builders unless it's Ryan Holmes Ryan Holmes um they don't like to compensate Realtors but um I have other opinions on Ryan Holmes that I'm not going to share right here right now so we can talk about that later um but anyway long story short I feel great about 2023 I think there's a lot of exciting things I think the market is going to slow down but that's okay um that doesn't mean it has to be a bad year that just means it's going to be a different year and I'm really excited to work with you guys in the future so please contact me for any of your real estate needs my contact information is in the show notes if you need to reach out to me for anything please subscribe subcribe to the show if you like it and if you love it leave a rating leave a short little review I would appreciate all of those things hey we're about to enter the new year so I want to wish you guys a very Happy New Year I'm looking forward to a prosperous 2023 and next time we talk it will be the year 2023 so until then stay safe don't do anything crazy with any fireworks don't do anything crazy on New Year's Eve we'll talk again next time [Music]