[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 Stan McCune realtor right here in the Greenville area you can find all of my contact information as always in the show notes if you need to reach out to me for any of your real estate needs and please just remind please subscribe to the show if you enjoy it please leave a rating or review and let's get the show out to as many people as possible I appreciate when you guys leave those ratings and reviews so thank you to those that have and if you haven't please just take a moment to do that all right today we are going to be talking about what we do pretty much every month and particularly when the market is as volatile as it is right now and when we're trying to figure out what exactly is happening we're going to be looking at the market stats published by the greater Greenville Association of Realtors to try to read the tea leaves on what is happening in the local real estate market right now and there's a lot of interesting stuff in here so we're just going to jump right in and start at the very top with new listings new listings went way way way down in December of of 20122 I'm saying the lowest new listings number that we had seen since since December of 2018 a 4year low so the market has really in December in particular really corrected you might say overcorrected for what was happening with demand going down and we saw a massive decrease in Supply a an insane I mean for it to be the lowest in four years that is an insane number because demand hasn't gone down to 18 levels demand is still extremely high in comparison to what it was four years ago in the Greenville area specifically again as a reminder a few a few things I I need to make sure that I express here when I talk about these Market stats these are Greenville and my opinions are Greenville only these do not apply to other markets although there might be some resemblance some similarities to to other markets and as well I'm limited by the data that the greater Greenville Association of Realtors provides this data does get redacted in future months and so there's one particular data set the pending sales number which is usually way way off for the most recent month we'll get to that in a second anyway those are a few things that I want to hedge but in the Greenville area we saw a massive Plunge in new listings in the month of December but then we saw in January so so this past month which which is the primary month that we're looking at because obviously we don't have February numbers yet January hopped all the way back up from what it was in December we had 945 new listings which is like again that's like nothing that's like 30 listings per day January hop back up to 1,380 listings that is a 7 5% increase year-on-year why is that important that's important because we had had three three straight months and four out of six months of year on-year declines in in new listings so we had a 7.5% increase year- on-year in new listings and an even bigger jump month- on-month obviously from 945 to 1380 so it seems like I I don't want to draw any like massive conclusions from this but for sure listings that would normally have been in December for whatever reason people waited until the New Year to to list their homes and I don't know if that was an overcorrection as a result of okay the Market's slowing down plus we've got the holidays we're just going to wait until the new year and see what happens I don't know if that was because mortgage rates started to taper off and people were feeling a little bit more optimistic and so they started listing more houses in January I don't know I'm curious to see what happens with this number because as you probably know since We've last kind of talked about these numbers now people are expecting mortgage rates to go a little bit higher than what we originally thought this year because all of these jobs reports and different things that are coming out would lead us to to think that the FED is going to keep pushing up their funds rate their interest rates and that then in part is going to drive up mortgage rates in fact this past week we already saw it happen where mortgage rates went up basically half a half a point which is a massive increase in one week as PE as mortgage markets immediately responded to the jobs report numers so all of that to say it does appear that a lot of these new listing numbers are tied to these other things people aren't wanting to list their home if they don't think they can afford a home to buy which makes a lot of sense so we'll have to keep keep track of this but that January number that was that was a higher number that was our our first year on-year increase in new listings since September of 2022 again to reiterate some December listings appear to have been baked into that but we'll we'll have to continue to to keep track of that and see what happens all right pending sales pending sales this is the one that I just said is is going to be inaccurate highly inaccurate for the month of January but we can still piece together some some things from this all right so first off we're going to go back to the month of December because that should now be accurate so originally and this is why I'm just going to show you guys because you're probably like why does he always make this hedge about pending sales here's what pending sales for the month of December said in last year's GG Market stats sorry in last month's ggr Market stats I'm trying to to multitask here and it's not working so when they when they published a January Market stats which covers the month of December they said the pending sales for the month of December was 548 and that also impacts the months of inventory month supply of inventory which they had at 2.7 for now the February Market stats when they revised the December numbers it knocked up those pending sales back up to to 767 so that's a that's a big difference from what did I just say 500 something 548 that's a that's a massive difference you know I don't know what the percent difference is but it's big it's big right so that's why we can't really look at the current the the most recent months pending sales because this is it's this way every single month I've been tracking these Market stats for years and every single month the pending sales numbers are lower than they should be but we can look at the trends leading up to the month of January and the trends leading up to the month of January is that pending sales are appearing like they're going to be roughly 25 to 30% down basically the entire year if things continue the way they are they're going to be down 25 to 30% October of 2022 was down 25% year on year November was down 29% year-on-year December was down 28 8% year onye and I expect something very similar for for January once we next month Stats come out and then we can see the revised number for January I'm expecting it to be kind of in that 30% range so pending sales are down and obviously that then impacts closed sales and that's exactly what we've seen December Clos sales were down 24.3% year on year in January it was down 31.2% year onye if you're Cur curious about those numbers it was 767 closed sales in January of of 2023 in this past month versus the previous year it was 1, 115 sales for the month of January 2022 so that's a that's a big drop off and and that's also a very low number that is the lowest number that we've seen since Jan January of 2019 so here we go again where we have a 4-year low in closed sales and and again that's a 31.2% decrease year on-year so the market the real estate market is Contracting right now that's just the reality of the situation the least number of closed sales in four years and I talked about this what was it last week I think how I was talking to other Realtors and we were discussing about just how slow the beginning of the year was and that's what's reflected here 767 closed sales you know how many Realtors are in Greenville there's like 4,000 realtors in Greenville and some of those 767 sales would have had a dual agent so it's pretty safe to assume that less than 750 Realtors this past month made any money and that's insane that is insane to think about for for for the Greenville Market all right days on Market until sale I've been saying this number is going to keep going up up up because so many sellers didn't adjust to the shifting Market they listed their homes too expensive they were you know assuming that their homes would keep going up in value at the at the rate that they had been they didn't know what they were doing they got greedy whatever the case may be and we've been seeing this number going up roughly 60% year on-year for each month basically for the past four months and January was no different the number climbed all the way up to 49 days on Market until sale that's a 58.1% increase from 31 which is what it was in January of 2022 now just a reminder days on Market until Sal it's the average number of days between when a property is listed and when an offer is accepted in a given month I think this number is going to continue to go up and I've been saying this over and over and over again because all of these people that didn't adjust for the for the market as the market was adjusting when they listed their homes for too expensive now their homes are lingering on the market they're getting stale eventually they will go under contract and eventually a lot of these you know homes that are being built by home builders that are listed in MLS eventually they will go under contract as well but if they've been on the market for 90 or 100 days that's going to Drive the number up so as the as the absorption rate for some of these homes that have been on the market for a long time goes up and as these homes start to sell again we're just going to keep seeing this number go up so we'll keep tracking it I expect it to to plunge well into the 50s the next time we're looking at these Market stats and and it it may it may keep just going way up from there until we absorb absorb a lot of these home a lot of these listings that have just kind of been lingering on the market because they've been overpriced now here's an interesting one median sales price this is one of the most important numbers that we look at this is really a good judge of what the market is doing and as I've discussed a gazillion times but I'm going to mention it again this isn't necessarily a onetoone correlation with appreciation because part of what goes into a median sales price when it comes to when you're looking at the entire Market obviously if a bunch of really cheap homes or a bunch of really expensive homes come on the market or don't come on the market that seriously impacts this number but this is the closest number that we have to kind of tracking whether the market is is appreciating or is potentially in a depreciative market and so we've seen now going back to September of 2022 we had seen four straight months of declines in this number January bucked that Trend January the number jumped back up to a 7% increase Year on-year from 280,000 in January of 2022 it went up to 2995 40 January of 2023 now I think a lot of this is impacted by that we had some more expensive homes sell in January than we normally do and so I think that that is an impact on this but at the same time I think what this is telling us and I've been telling you guys this pretty much every month for the past several months I've been waiting to see does this median sales price go dip below 285 or does it come within range of 285 that's kind of the number that would make me think that we're actually seeing home prices going down and and you know when we looked at at December numbers it had gotten down to 296 and so it was like okay maybe there's a possibility that we will see that prices have have started to go down below their seasonal Norms but now it's jumped back up to 299 540 that tells me and and with the 7% year on-year increase at least for the moment it's it's not looking like we're seeing any sort of of actual prices go down again this is not a perfect way of looking at it but there isn't a perfect way to look at it this is this is the best way the best simple way for us to to assess this now as I've said before this median sales price it does not account for seller concession so we can't I I would have to do a lot more digging in order to figure out okay what about closing costs cuz sellers are having to pay a lot more closing costs than they paid in the past for buyers that has it's finally come back right it's been it's been 2 and a half years basically since sellers have had to pay any buyers closing costs that used to kind of be the norm unless it was a a bidding war multiple offer kind of situation we are seeing more of that happening where where sellers are having to to contribute some towards buyer closing costs now it's interesting that really you have to look at what Builders are doing to kind of better understand to to best understand what's happening in the market Builders are offering all sorts of of incentives to buyers right now offering all sorts of closing costs offering Realtors you know 5% commissions plus bonuses all sorts of of different things offering upgrades retail sellers are still I'm still seeing that they are lagging behind that they're not understanding the Dynamics of the current market and that's being reflected in them you know overpricing their homes and saying nope I'm not going to I'm not going to lower my price well I'm fine with sellers not you know with sticking to their guns and I'm encouraging my clients that are selling to stick to their guns but I'm also not encouraging them to overprice their home so that's a really important I've seen I'm I'm still seeing a lot of homes being overpriced um and and sellers just not being realistic about what they can get um and then we're still seeing I I've I'm surprised how much I've run into this sellers not um in situations and and I have to be careful with how I say this because it is it's not directly what the seller is doing it's an agreement between the seller and the listing agent on how this is handled but in essence that a a buyer's agent is being offered less than 3% what what we see most commonly is 2 and a half% and that is something seller sellers are going to have to and and again in cooperation with their with their listing agents are going to have to determine whether that's the best strategy me personally I don't think that that's the best strategy I think that sellers should be offering buyers agents 3% and the simple reason for that is Buyer Agents often any good buyer agent and that's who you want to be working with if you're selling you want to work with the best buyers agents out there trust me you don't want to work with the bad ones any good ones that are out there are requiring a minimum 3% commission that's just the way it is the good ones are going to get they're not going to reduce their paycheck just to get something just to get people under contract or or whatever the case may be and so if you're offering only 2 and a half% then you're expecting the buyer then to have to come up with that extra half percent to pay for their agent well what if the buyer can't do that or what if the buyer just doesn't want to out of principle which I've seen that before as well they feel like that this should be the seller's responsibility traditionally that's been what the seller has done I think it's more attractive and and and I've seen this as well you've got certain agents that are out there that when when they're looking at a bunch of homes that come on the market they see some that are offering 3% and some that aren't what do you think even if their client has agreed to to pay the 3% even if the seller isn't paying for the entirety of it it's still that's a conversation that you have to have with your clients that's another thing you have to factor into the numbers it disincentivizes everyone to look at those properties and now you can see on Zillow and realtor.com and whatnot it they're required now to publish the buyer agent commission that's being offered and by the way in the state of South Carolina previously so the entire time that I've been a realtor there's been multiple options for Buyer Agents where basically you could agree to potentially have you know basically I'm going to get paid whatever the seller offers me as as an option that is going away this year they're going to remove that the South Carolina Association of Realtors is removing that from the form and it's going to be a set number and so every buyer's agent is going to have a set number maybe some will go in there and put 2 and a half% I don't know again when they make these big changes there is a little bit of an adjustment period but I think that the vast majority that and and already the vast majority of good agents are already doing 3% probably the bad agents or the new agents also will will default to 3% as well so people need to be getting in Minds as they're selling their homes they need to expect that that in this market you just you have to offer the 3% to the buyer agent that's my that's my personal opinion you are free to disagree with me but I just laid out the data you can respond with with your own data and your own arguments if you want again my contact information is in the show notes um I found this moving on from the median sales price I found this interesting as well because this this supports a little bit of what I said about the the median sales price being bolstered by more expensive homes the average sales price went up 11.6% now I don't spend a lot of time on the average sales price because the median is kind of more indicative of what's happening but it was up 11.6% year-on-year it went from 317,000 to 3538 76 so 353,000 and I'm going to explain more about these more expensive listings selling here in a moment percent of list price received the percentage found when dividing a property's sales price by its most recent list price so not accounting for Price reductions then taking the average for all properties sold in a given month not accounting for seller or concessions all right hopefully you got all of that if you didn't that's fine all you need to know is that that number went down to 97 7% so the average house that was listed and sold received 97.7% of what it was listed for so a $100,000 house on average sold for $97,700 but that's not accounting for seller concessions and as I've already mentioned sellers are having to pay more concessions to buyers than than they've had for a long time so really that number is is we we should be considering this substantially lower than what we're comparing it to last year when it was 100.1% and no seller concessions were being paid at all now 97.7% historically that's pretty close to what it was pre pandemic I mean we saw pre pandemic it was more like in the 98s but again that that's within that Norm now I would not be surprised if we saw this number come potentially substantially down I could see it easily falling into the the 96s which if it did that that would be like going way back but again we've got sellers with unrealistic expectations right now not understanding the Dynamics of the market and when you have that and they're listing homes for for more than they're worth what's going to happen is they're going to to to get this number they're they're going to get a lot less for their home than what they're expecting to the only variable of course is that this does not account for for homes having reduced their price so perhaps price reductions and then sales happening after price reductions will keep this number from going down into the 96 Range but we'll have to keep track it would not surprise me if it did inventory numbers the inventory of homes for sale jump back up to 3517 that is a 133.7k by far year onye that we've ever seen it's it's a month- on-month jump not super surprised by that but inventory is is up but it's still not at pre-pandemic levels that that's an important thing to to keep in mind so it's up but it's still low if that makes any sense hopefully that makes sense and I was just looking just out of curiosity at what the what's currently active in Greenville MLS if I look at residential um oh and I just got logged out give me a second here so if I just look at the residential class on Greenville MLS and I look at everything that's active it comes out to 20 2,719 now I don't think I I don't think that this is the same thing as what gjr is looking at I think that they must be looking at everything is active and everything is also under a contingency contract because for whatever reason I don't know why contingency contracts are still listed as semi-active if that makes any sense like they're still cons that's considered an active category even though it's under contract if I do that that then the number if I include those then the number jumps up to 378 so that's pretty close and a tick higher than what these January numbers were but to me I feel like the real number is more of 2719 I feel like that's more accurate because that that's the homes that aren't actually under contract now we know that a lot of inventory right now is being bolstered by new home construction and so if I look at the age of these homes the approx oate age and I take out everything that has already been built so I'm only going to include to be built under construction or new slash never lived in all right when when I included everything the number was 2719 when I only include new construction that number is 1431 so over half of the active inventory is new construction so again new home builders still it's still tough time for them right now if you're listing your home for sale as a retail reseller type of type of home sale situation there you're there's not as much direct competition with other sellers you're competing more with with new home construction so that's just something to keep in mind as well month supply of inventory for December I already mentioned it was 2.5 that's actually a that was a decrease from November when it was 2.7 so very very interesting number there you know we're we're kind of expecting month supply of inventory to go up but it went down from November to December now January it's saying 2.8 but that is inaccurate as I've already said this number this month supply of inventory is pegged to pending sales and pending sales is always wrong for the most recent month so I expect this number to be probably either right there again at 2.5 or perhaps at like 2.6 next month we we'll see for sure and then we'll be able to to answer it but the year before it was only at one month of inventory but we knew that that wasn't that wasn't sustainable but in the mid tws still very very low that's still historically an extremely low number and so again if if mortgage rates start to to really pick up like if we see mortgage rates potentially hit seven 7% something like that on average seven or higher then I think we could start to see these inventory numbers really go a lot higher than they've been now I found this to be interesting because when I saw the medium price point and the average price point m the increases that we had there I wanted to go and look okay what is driving this where are we because the I don't normally get into this granular of detail when I'm doing this podcast but but GG Market stats actually does have a buy price range number m and breakdown in these stats and so I wanted to see okay what are the price ranges that are seeing increases or decreases year onye and the biggest increases year onye were for homes there was a 23% increase in in Clos those sales year on year for homes between $350 and $500,000 so that's above the above the median a and the biggest increase a 34.7% increase for homes year-on-year that were sold between 500,000 and 750,000 that's way above our median and then a 25% increase on homes that were sold for 1 million and above so we saw and and there was a slight decrease for homes between 750 and a million there was a 4.3% decrease but but that was really minuscule like at the end of the day that only amounted to 18 homes total less than the year before so there were I I mean we're talking about let's see here about 700 1,000 we're talking about pretty close to a, more homes that were sold between 350 350,000 and above than what we had the year before so that's a massive increase and there was also an increase in homes sold between 250 and 350,000 just not as big it was a 7.7% increase year-on-year and then everything below 250,000 decreased by 30 something per. and that's simply because there's just not a lot of homes on the market that are below 250,000 anymore that's just the reality of the situation so seeing those big increases particularly in the 500 to $750,000 category and then the million and above I think that I don't know if that was an anomaly this is something I'll definitely be tracking more often but regardless we're seeing we saw in January a lot more expensive home sold than what we saw in January of of 2022 and and that certainly bolstered some of these numbers and and and we'll just continue to see what happens as we go along but they right now I think the story is less Supply less demand fewer closings just all around that is just what we're seeing in this market and I've already told you I tell my Sellers hey you need to be patient I tell my buyers hey you need to be patient as well there's less to go around there just is and even if inventory levels get to where they were in 2019 2018 whatever even with the mortgage rates being higher there is still more demand than there was back then that is just the reality of the situation we have more demand in the Greenville area and and now than than we did pre pandemic more people are wanting to move here more people are coming of age again the millennial demograph TR is really strong right now in terms of home buying a lot of them are like you know what we don't care if mortgage rates are higher we just need to break the cycle of rent or we don't care that mortgage rates are higher we have kids now and we need a bigger place and we're just going to have to bite the bullet take the the higher mortgage rate and then refinance when we get the opportunity to refinance in a year or two so all of those things are driving Demand right now and and those things aren't changing Millennials aren't going away the desirability of Greenville is not going away all of these things are going to keep keep driving that demand and it's it's going to be a baseline of demand that we have for this area regardless of what happens when it comes to to these mortgage rates and all of that so thank you guys for listening that's all for this episode I appreciate every one of you if you don't mind please hit that fstar rating please leave a short little review for the show subscribe if you've not subscribed but you enjoyed this content and if you need to reach out to me for any of your real estate needs if you need a buyer's agent if you need a listing agent someone to to bounce ideas off of I'm happy to do that as well please let me know my contact information is in the show notes and we will talk again next week [Music]