[Music] 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 Stam McCune realtor right here in the upstate of South Carolina lovely Greenville itself you can find all of my contact information in the show notes if you need to reach out to me for any of your real estate needs please please text email call whatever is best for you all of that contact information is in the show notes and if you appreciate the show if you get something out of it please hit the Subscribe button to make sure you don't miss future episodes and please as well just scroll down if you're using the Apple podcast app or if you're using spotify hit the little festar button to leave it a rating to get it out to more people to get the show out to more people please leave a short little review if you can just take 10 seconds out of your date to do that I would really appreciate it I want to today to take one final look back at 2022 because the greater Greenville Association of Realtors just released their Market stats for December of of 2022 and as we typically do typically during a normal month we review the stats once they get released by The GJ and I would like to do that because I feel like there are some interesting little nuggets get in there but first before I get into that I just want to give kind of a general observation that I'm seeing right now in this market obviously we're experiencing shifts it's been shifting now for for the better part of the past six months but where I think I'm seeing the biggest shift right now is in how buyers are just approaching the market as a whole and what I mean is this what what I'm consistently seeing is a home comes on the market buyers are really interested in it and it gets a lot of activity but now people have gotten so worn out from the past two years until recently of bidding wars that now the inventory numbers are up and there's fewer bidding war type of situations happening it's becoming kind of a self-fulfilling prophecy because people are now just waiting they're not even making offers on some of these proper because they want to avoid bidding wars and so they're just kind of you know they they'll look at the house and then they'll just be like okay let me think about it and then and then you know they'll wait a week and then maybe at that point they'll come back to it and say okay I want to put an offer now actually had this happen with one of my clients recently they they did that they looked at a house and they decided to wait on it and then a week later came back to me and by that point it had already gone under contract but this house had been on the market for for a few weeks so there's a pretty good chance that the person that got it under contract also had waited for some time as well so it's a very interesting Dynamic I think that everyone is trying to figure out what this new normal looks like this new new normal right because whatever this is we've been talking about in this in the show about going back to prepandemic Norms right that's been kind of what what we've kind of been assessing a lot of things off of and I think what I've realized is that there is no going back to pre-pandemic Norms in the real estate market that is not going to happen we have we we were talking you know the the trendy thing to say was The New Normal you know in real estate following the pandemic when things went crazy well now I think we have a new new normal and it shouldn't be surprising because prior to the pandemic mortgage rates were you know close to to two points lower than they are right now and a lot of other numbers were similar but that twoo difference in mortgage rates that's a massive difference and there was a possibility that had the pandemic not happened that rates would have ended up you know going over five 5% I know my broker at the time fritzy Barber who's no longer with us she predicted she thought that they were going to go over 5% you know before the pandemic happened so we may have ended up seeing something like that regardless but we'll never know because it just didn't happen the pandemic kind of threw everything for a loop so long story short we're seeing buyers shifting in their behavior in in very interesting ways and I really in my opinion and I keep hearing people saying I don't want to get into a bidding war situation and so because of that fear of getting into a of of of being in a bidding war situation people just aren't even putting in offers they they wouldn't even be in a bidding war situation because there's no offers coming in until a week or two later so what I would encourage my buyers and and you as listeners if you see a property that you're interested in that that fits what you're looking for go ahead and and Go For It Strike m if you think if you say well there's going to be a lot more homes coming on the market no inventory is is going down and we're going to see that here with some of these Market stats so I don't I don't encourage anyone to I don't want to encourage someone to overdo it and to be too aggressive right this isn't a market where you need to come in and offer 20,000 above list price like you like you used to do like used to have to do but at the same time waiting just to avoid a bidding war might actually have the opposite effect of what you're trying to do there's nothing really the the only downside of a bidding war at the end of the day is just getting emotionally invested in a property it really does not take me that much time to write up the paperwork it takes me some time to to do the requisite research to kind of tee up everything to make sure that there are no blind spots that we have but for you as the consumer the purchaser of real estate once you've seen the property done the showing and all of that there's really not a whole lot more that's required of you besides just in theory keeping your emotions out of it so that when you submit an offer if it does go to a multiple offer situation you're okay with that and I know that's a hard thing to do real estate is very emotional I'm not telling people to to turn off their emotions I'm not trying to gatekeep emotions as as some people might say there's no gatekeeping on this on this podcast but if your if your main concern with a multiple offer situation is is the the bad feeling of losing out I will try to to help you with that and I just encourage anyone out there if you're looking at real estate if you're interested in in a property don't let the fear of the multiple offer situation prevent vent you from potentially submitting an offer all right with all of that now out of the way let's look at the final endof year numbers the greater Greenville Association of Realtors published when they came up with the December Market stats now just a reminder as always there are some stats that for whatever reason are always in accurate for the the most recent month I will navigate through that I'll let you guys know which stats those are but for the most part these stats are typically Fairly reliable there are some instances here and there they they they do get tweaked kind of as the year goes on so they're not you know sometimes some of these stats will go up and down by by I don't know let's call it 5% here or there but for the most part these are going to be pretty accurate so let's start with new listings and just a reminder is always we look at year onye the the the most important thing is looking at these stats year on-ear but at the same time we do have some month-on-month considerations as well so there are some interesting things from a month-on-month standpoint that I think are worth talking about in certain circumstances so for the month of December new listings were down 177% year onye more substantially they were down well I don't even know the percentage but they went from November 1300 1,00 sorry 1,314 new listings to December was down to 940 new listings we went below 1,000 new listings for the first time for the first time since 2019 so that is a pretty pretty tremendous drop now that was 2019 that was the month of December I believe that it that it went down below 1,000 listings and actually pre pandemic it was really common that we would see things drop below 1,000 listings in the month of December that actually was a very consistent Trend going all the way back to to 2010 so we are seeing a reversion to pre- pandemic but as I said before nothing is the same as pre pandemic except some things on paper and so where we see this inventory or we not yet in inventory but where we're seeing new listings dropping the thing is that demand is still higher than it was several years ago and so we're seeing the market kind of overcorrecting for What's Happening Here we still have fairly low inventory but fewer people are listing their homes for sale we've talked about that before we've been talking about that every month it's a phenomenon that's happening for multiple reasons one of the main on ones being that people that are locked in to a 3% mortgage rate they're not going to move and double that mortgage rate to go up to 6% they're just not it for most people it doesn't make sense to do that and so unless mortgage rates come back down quite a bit we're going to see low listing levels for potentially for years right because again who is going to be incentivized to leave behind a 3 % mortgage rate when rates are so much higher it's going to be really really hard for people to do that so we're we're looking at I believe an extended period of low inventory here in the upstate of South Carolina and probably probably for the most part Nationwide although there there are some markets that are that are are operating a little bit differently but for sure in the upstate I anticipate that pending sales this is one of the ones that tends to not be accurate for the most recent months so it says that pending sales were down 49% year on-ear for December I'm just going to ignore that for now because we need to go back to November because November's numbers last month were were way off so November of 2022 pending sales were down 33% year on-year massive massive decrease and it was below a th000 and it went below a th000 again for the first time since 2019 so another reversion back to pre-pandemic Norms it so it was 913 pending sales which is the count of properties on which offers have been accepted in a given month that was down from the previous year which was 1,362 for the month of of November 2021 now these numbers are saying that December was down to 548 pending sales I can tell you right now that's way too low this number is always low for some reason reason when they when they published this based on historical Trends I would guess that that number is going to be either in the high 800s or low 900s so still very very low and and and so that's what I think is going to happen however December of 2022 was only 1,77 so the percent if I end up being accurate and it ends up being in the High mid let's just call it mid 800 to low 900s is what I where I think that's going to end up being then the percent decrease won't be nearly as much year onye as we saw in November but I do think we'll see a month-on-month decrease in pending sales we'll have to wait until January Market Stats come out which won't be for another month and then we'll go back and look and see what the December pending sales numbers were closed sales but by the way of course the important thing about these pending sales being low is is this sets us up for the future month's close sales so seeing November pending sales being down below a thousand that just means that now we're setting ourselves up for a very slow winter because those pending sales turn into closed sales in the following month and that's exactly what we saw we saw closed sales for the month of December go down 24.5% year on-ear so it was at 1,221 versus the previous year is 1,617 however I want to say those numbers for December of last year were insane like that was not a normal by any stretch of the imagination that was not a normal December what we had in 2021 so I'm I'm not going to draw too many massive conclusions from closed sales being down 24.5% I think that's actually those closed sales numbers are actually higher than I would expect them to be it was actually increased month- on-month versus November which was 1,197 so I think that that honestly that's a a fairly strong number even if it was down year on-ear that being said as I just noted pending sales are really low so I would anticipate once we get January and February closed sale numbers they're probably going to be quite low days on Market until sale this we I've been talking about this a lot we're going to see this number Skyrocket I don't remember what my prediction was last month I think I predicted that it would go into the high 30s I think but it surpassed my predictions it went up to 43 days on Market until sale now this is the average number of days between when a property is listed when an offer is accepted in a given month and here's the thing what I've been what I've been saying is that we're going to see this number Skyrocket at some point because there are some homes particularly new construction that are just sitting and have been sitting for months and when those sell those are going to cause this number to absolutely Skyrocket and so that's what we're seeing we we're we're starting to see the number Skyrocket because it was 35 days in November and now it jumped up to 43 days in December and that is a 59. 3% increase from December of 2021 which was only 27 days how does that compare historically well pre pandemic the norm was usually in the 50 to 70 days on Market range and again this is an average so it's not not necessarily that you know even pre- pandemic we still had multiple offer situations properties going you know selling in one or two days or whatever like that's always been the norm even during the Great Recession that would happen but looking at the averages kind of helps us to kind of gauge where we are in comparison to other markets 43 is still very low that is still historically very very low but now it's starting to look more like what prepandemic was actually in in 2018 we had a stretch where we were kind of in the low 40s and then that jumped up a little bit in 2019 as mortgage rates started to go up so there there is a direct correlation here between days on Market until sale and and mortgage rates median sales price all right this is one that we have been tracking very closely as I have said repeatedly on this podcast if I saw the median sales price in Greenville go below 285,000 that would tell me that we are for sure seeing prices drop below what the seasonal Norm would be so we typically see median sales price drop this time of year that's just part of the seasonality of the market part of that is there's not as much buyer demand and so it so homes can't command as much as they would at other times of year but also part of it is just the more expensive homes not not being sold and and and or not going on the market so for December of 2022 we saw the number decrease down to 296,000 which is a 2 .7 % increase from December 2021 which was 28826 this is our lowest percent increase in a very very long time 2.7% now that isn't that unusual for Greenville that would that would be a a pretty standard year-on-year type of type of increase for the Greenville Market which is a more stable Market than many but in comparison to I mean I'm still looking at in may we had a 20.5% year-on-year increase April was 19.7 March was 17.3 February was 20.8 I mean we were seeing 20 plus% year-on-year increases in the median sales price for for several months out of the year and now it's dropped all the way down to December being only a 2.7% increase we're starting to really knock on the door and and my $285,000 figure that I came up with whereby I would determine that the market is kind of Contracting and we're seeing prices go down at a non-seasonal rate that wasn't an arbitrary number that was based on Research that I had done on a standard seasonal medium price drops that we see in this market but that being said there is still a margin for error in there is the number really 290,000 ,000 is it is it really 280,000 what I'm trying to say is the fact that we're now at 296,000 for the month of December we could pretty much already be there so that's something to that obviously we need to continue to keep track of and we could absolutely see a situation where very soon sales prices median sales prices are below what they were in 2021 now does that mean that we were in some sort of a recession or something like that no I I need to remind you guys now I'm not saying that we won't go into recession in fact I have predicted that we will go into a mild recession I had a bold predictions episode recently so let's let's not hear this as me being overly optimistic oh we're not going to go into recession but it's not uncommon if you look at the Historical Trends there are sometimes months that you can look at historically where the year on-year medium price was actually down from the previous year sometimes weird things happen particularly in the winter when buyer demand just cools off and and like I said when more expensive homes are just not selling as much where we can see the occasional year on-year drop for for one or two months but then the trend once the year is all said and done the the trend is that there was an increase by usually somewhere between 2 to 6% the increase in 2022 for the entire year was 14% so we saw home prices go up 14% for for the the month of sorry for the year 2022 versus 2021 average sales price I'm not going to really get into that that's we don't talk about averages as much because that's skewed by the most expensive and the cheapest homes that are sold but if you're curious the average sales price for December was up 6.4% up to 351,000 however from a in compar in comparing that to the rest of the months of the year that was actually the lowest number that we've seen since February so take that for what it's worth which I don't think it's worth very much percent of list price received this is one of the more jarring numbers on here so this is a percentage found when dividing a property's sales price by its most recent list price than taking the average for all properties sold in a given month not accounting for seller concessions so again I have to say this for people that may be new listeners what that means is that we're looking at the most recent list price so this doesn't account for Price drops and right now there's a lot of price drops it also doesn't account for seller concessions closing costs Etc that are paid by the seller right now there's a lot of closing costs a lot more closing cost being paid by the seller than there has been the past two years so this number went down 2.4% year- on-year it was the percent of list price received in December of 2021 was an insane 100.3 3% in other words the average listing was getting over what it what it was listed for which we all knew that that wasn't going to remain the same for a very very long time we saw that number hover around 98% and we finally saw it start to get into that range around well in August it went down to 99.6% and then it's been steadily going down until December of this year when it went down to 97.9% this is looking very 2019 is if that makes any sense that that was that would be a number that we'd very much expect to see back then but this is a more staggering number when you consider that again it's not accounting for Price drops and it's not accounting for seller concessions so even though it's 2.4% lower on paper year on year I would say it's probably closer to 5% lower year on-year if you accounted for those other things because when you're selling obviously it's a really big deal what you listed it for originally like did you have to drop the price if you're having to pay $5,000 in buyer closing costs like that's real money coming out of your pocket like you you you're considering that as part of the transaction and unfortunately we don't have GG does not track that for us but the if we factored all of that in I would expect that the real number would be at least double the the difference what than what we're seeing here housing affordability index this is the the index where 100 means that essentially the median household income is exactly what's necessary to qualify for the median priced home under prevailing interest rates so we like this from an affordability aspect to be at least at 100 or greater so that the medium family can afford the median priced home unfortunately it's been below 100 pretty much the entire post pandemic or the entire pandemic and post-pandemic era that we've been in it's now at 80 which is a drop of 2.4% from the previous year which was 82 however it's trending in a more affordable Direction which is interesting given that mortgage rates are where they are now mortgage rates have come down a a little bit the past couple of months which is a good thing they're they kind of peaked a few months ago so that's factoring in and again the medium priced home being cheaper is factoring in as well so we'll track that m I don't know if it'll ever go back up to 100 I think probably that ship has sailed maybe if we go into a recession we could see something like that but for now it's it's sitting tight in in the 80 range inventory of homes for and this this one I find to be very interesting on multiple levels on the first level we sell a 101% increase year on-year in inventory it went from December of 2021 we had 1,72 homes for sale at the end of that month the end of December 2022 we had 3,421 homes for sale that is absolutely insane it literally doubled 100 1% increase year on year however it now has gone down for the second straight month so October we saw inventory Peak at 3571 and I said this on my podcast I don't remember which one it was but I said I believe that inventory may have peaked in October and I didn't come up with that on my own I do a lot of reading on on the subject experts out there said we think inventory is going to Peak in October and sure enough November it went down slightly and then December it went down again so we're seeing some some indicators that perhaps inventory did peak in October now what's going to be interesting is when we go into the the busy season are we going to see it pick back up cuz typically we would but everything is just different now so who knows what will happen we we'll have to we'll have to track whether inventory does pick up month supply of inventory this one actually surprised me a little bit of course the the month supply is the inventory of homes for sale at the end of a given month divided by the average monthly pending sales from the last 12 months remember the pending sales is the one that is kind of a bugaboo in these stats so we can't really look at December's numbers but November only went up to 2.7 months of inventory I would have expected that to go a little bit higher than it was but again new listings are really cooling right now people have really responded to to the shifting Market with much much fewer listings than what we typically see and so this is causing the inventory to like I said to Peak and then the month supply of inventory to be at 2.7 in November that's still very very low pre- pandemic you know we saw inventory levels they would be in the in the three to four range typically typically closer to four it just kind of It kind of depended on the month but for us to still be at 2.7 I I'm honestly a bit surprised by that I would expect inventory to climb above three months of inventory but at 2.7 that is still on paper a sell's market now again what's strange is how much of the inventory is new construction which is kind of mudding the waters when it comes to all of this We've we've never seen so much new construction inventory at least not since post Great Recession we just have a lot of new construction inventory that's just sitting there that like I said it's it's mudding the waters so we're at 2.7 months of inventory we typically consider anything less than really 5 a halfish months six months if if you want at least by these stats anything less than that is considered a sellers Market anything more than that is considered more than six months is considered a buyer Market I think the way things are right now just the the way things are trending I honestly I think it it would feel a lot like a buyer Market if we hit 4 and a half to 5 months of inventory just because of how people are reacting to things right I think that that we have to kind of rethink some of these numbers like what how we've traditionally interpreted them I think we might just have to interpret them differently going forward because 2.7 months of inventory I mean by all metrics is squarely a sellers Market but this feels like a pretty it it it's definitely a sellers Market but it feels like a much more flat Market than 2.7 months of inventory would indicate and I don't anticipate that number you know going up by a whole lot just based on I mean we we need to look at hold on let me look at the at the pending sales again here so pending sales yeah it pending sales are are still probably going to stay quite low inventory is still probably going to going to kind of Flatline where it is it would not surprise me if we continue to see sub three months supply of inventory but it doesn't feel like the insane sellers Market that you would expect it to feel like in typical sub three months inventory type of environment so at some point I I'm not ready to do this yet we have to kind of see how the year plays out but at some point I think we need to start kind of reassessing these numbers and what they actually mean not historically but now moving forward the his the historicals of all of this May honestly no longer matter to a certain extent so that is that's pretty much all for the stats for today I'm very interested to see how this year plays out as I've said before I'm very excited I think it's going to be a great year from a a real estate standpoint but for those who don't adjust their expectations it's it could be a really really rough year so I'm trying to stay on the crest of the wave I'm trying to help you guys ride the crest of the wave as well with regard to at least some of this data and and my interpretation of it so I hope that's helpful for you if you have any questions let me know my contact information is in the show notes please leave a festar rating a short little review and I hope you guys stay safe we'll talk again next time [Music]