Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in
Greenville, South Carolina, I am your host
as always Stan McCune realtor right here
in the Greenville South Carolina market
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all right today
I want to look back again we just had
an episode where I look back at some of
the Bold predictions that I made
towards the end of last year coming into
the beginning of this year and I want to
also kind of do something similar to
that not exactly the same but to look
back at a podcast that I recorded in
June of last year I believe it was
episode 122 where I talked about
investing in a shifting market and
and we talked about how there have been
all of these different markets since
2008 that have just meant different
things for Real Estate Investors and
there's it's always a good time in my
opinion no I'm not a financial advisor
but in my opinion it's always a good
time to invest in real estate but that
doesn't mean that you maintain the exact
same strategy through all of these
different markets as markets shift you
have to shift your strategy as an
investor that's just a very crucial part
of doing this and I and I think that
that goes for just about any investment
so last June I broke down kind of
different types of markets that we've
seen at least in the Greenville area
since 2008 and and I broke them down
into chunks basically the way I saw
these markets and we talked about
how what these markets meant for
different investors and I discussed you
know I knew that the market in
Greenville and Nationwide was shifting
at that point that was I didn't realize
it at the time but we know now that that
was when the housing recession began was
in June of last year of 2022. so
I saw that happening and and so I
recorded that episode and it was the
idea was the market is going to shift
which are we going to go back to one of
these previous markets that we've seen
in the past in the Greenville area and
so I think it would be fun just like
we looked at my bold predictions let's
look back at this episode as well and
see okay has the market shifted back to
to what it was back
back in 2008 or back before that or is
what or after that rather or is what
we're experiencing something new so
let's go back to some of my notes
from that episode where I first
started off talking about the Great
Recession the market from what we'll
Loosely say from 2008 through 2011. this
was a very unique Market
and to be completely honest we may
never see a market quite like this again
that market that Great Recession Market
saw home sitting generally almost all
the time all of the time for months at a
time we would see homes sit for years at
a time
it's insane that people would even keep
their homes on the market for that long
a lot of those homes though were
foreclosures there were an unbelievable
amount of foreclosures in the market you
could go to hudhomestore.com which is
where HUD posts their foreclosures and
you could just scroll through dozens of
foreclosures I mean they were just
sitting there the first house that I
bought
was one of those types of foreclosures
that had been on the market I think for
around a year and I had passed it up so
many different times and finally decided
you know there's nothing else that I'm
able to that I've been able to get
let's just go ahead and make an offer on
this house if that's a global offer and
HUD accepted the low ball because they
just wanted to move the property
but this was the time when they were
just incredible opportunities you could
buy single family homes in or near
downtown Greenville for around a hundred
thousand dollars you could consistently
get rental properties that hit the two
percent rule for those of you that
that don't remember the two percent rule
is when your your monthly rent is
essentially two percent of what you've
purchased the property for
so to to make that practical you you
were actually hit even in some instances
even higher than the two percent rule
you could get a 25
000 condo and rent it out for 650 a
month like this was a treasure Trove of
opportunities for people that had money
and that wanted to purchase rental
properties
finding flips was easy but it was a pain
selling because there was so much
inventory on the market so many things
selling you had to be willing to sit on
a property for a good year before
before you could be confident that it
would sell
there were a lot of board contractors
just sitting around needing work it
was a weird time to be contractors a lot
of them went out of business during that
time
and and so yeah it was a it was an
interesting time again it depended on
what you were doing if you were trying
to sell a lot of stuff a lot of real
estate it was an awful time to be an
investor if you were able to be a buyer
during that market it was a great time
now how does this compare to the market
now it is completely different it is so
different that market was fueled by
foreclosures our market today has
basically no foreclosures and you may
have heard recently that foreclosures
are on the rise listen yes they have to
be they have to be on the rise right we
we have had record low foreclosure rates
so of course they're going to come up
from record lows you don't stay at
record lows for forever it's just that's
just not how records work right if you
have a a a a team for instance in
professional sports that is setting
records they cannot keep setting records
at some point those records have to come
to an end for whatever reason it's the
same thing in in the real estate market
when you have something at a record low
or record high it has to come down it
has to slow down or it has to come up or
it has to to to do something it has to
change and so so we don't have that
we don't have properties on Market
that are hitting the two percent rule
that that is just not happening
now have could there be opportunities
off market for that
sometimes yeah sometimes there can be
are we seeing homes depreciating
well we've talked about this a bunch of
times no you're not going to find
opportunities in Downtown Greenville for
around a hundred thousand dollars
You probably never will again
unless we experience some kind of
major currency crisis where the
dollar has been devalued so much that
that real estate is just all of a sudden
super cheap but I just don't I don't see
that type of of thing happening
finding good flips
is not impossible in this market it's
been pretty hard to do for the past
few years but in this market it has
gotten a little bit easier but it's not
anything like it was during the Great
Recession that was just there was just
like I said all sorts of opportunities
out there and then as far as selling
property is taking like up to a year to
sell no no we're nowhere near that
I've talked about this show
recently on the show recently about how
there's almost no inventory that's been
on the market for three months or
greater
big and that's just because inventory
is so low as it is and so so no it's
selling you can you can expect to sell
within a reasonable time frame in this
market if you assuming that you don't
over price your home and even those that
are like really overpricing their home
even though they're having to to reduce
the prices as long as they do reduce
their prices they are selling
now so that very different than than
the recession Market what we're seeing
right now doesn't look at all like what
we saw in 2008 through 2011 and
prognosticating what we will see again
we've talked about this in the past but
it doesn't look like we're going to
return to anything resembling that
market anytime soon what about the
post-recession market 2012 to roughly
2015.
we'll just call that we'll call the
Great Recession Mark at a buyer's market
we'll call 2012 to 2015 a neutral Market
compared to today it felt very much
like a buyer's market but really
historically speaking more of a neutral
Market
during that market it wasn't uncommon
for homes to sit for a while before
going under contract but there were more
homes that would sell quickly now during
the Great Recession there were homes
that would sell quickly too
it's not like every single home
stayed on the market for forever homes
priced competitively in desirable areas
still sold quick quickly and I know that
even though I wasn't a realtor back then
because I was looking to buy a home
during the Great Recession and I kept
getting outbid because I I was finding
those unique opportunities for homes
that were priced you know competitively
and I found myself in all kinds of
bidding wars despite being in the worst
recession of my generation
but once we got out of the Great
Recession those types of bidding wars
and whatnot became more common but still
homes would still sit for for quite some
time it wasn't uncommon for homes to sit
for for six to eight months before
they'd finally go under contract there
are plenty of options for buyers who
might have more properties that they're
listed in than they could even see on a
given day or in any given day if you
wanted to to if you were in the market
to to buy or to move you could look at
what's on the market and and spend an
entire Saturday looking at houses spend
an entire Sunday going to open houses
and still not exhaust all the options
that were out there there were still
plentiful options now as far as rental
properties were concerned
the two percent rule more or less
went away but properties that were on
Market that could hit the one percent
rule were abundant you could then at
that point you could buy a condo for 4
forty thousand dollars that only had a
little deferred maintenance and already
had a tenant in it paying seven seven
hundred dollars a month now that's not
as good as what I said before during the
Great Recession where you could do
something very close to that for for
twenty five thousand dollars but still
that's good to get a 700 paying tenant
for a property that only costs forty
thousand dollars that's good and I know
that you could do that again because I
did that during that period of time I
bought some condos that were hitting
those exact numbers and guess what that
rent number started to go way way up as
rents in Greenville started started to
appreciate
and so
even though it wasn't as good of a
time to buy rental properties as it was
during the Great Recession it was still
a good time to invest in rental
properties this is what I'm trying to
tell you guys the rental market sorry
when it comes to investment properties
there it's always a good time to invest
you just have to know what you're doing
you could creatively find homes on
Market to flip
although generally speaking most
buyers weren't interested in buying
fixer-uppers because they had other
better options so that's been one of the
unique things about the past three years
is that there's been retail buyers that
have had to buy fixer-uppers almost
against their will because they didn't
have any other choice their
everything else they couldn't afford or
was just going under contract too
quickly or they just couldn't compete
because they had a loan an FHA Loan
program that they were trying to get
financing with they're competing against
cash offers and so that's something
that's been different in the past the
past three years but you go back to 2012
2015 people on the retail Market they
weren't buying fixer-uppers that just
wasn't a thing back in in that time
period
you had to assume at that point about
three months from the time you listed a
house until it closed
if an average home took took two
to three months to rehab then you could
expect at least six months from purchase
to sale and that was aggressive right
minimum we're talking minimums at least
three months from the time you list a
home until the time that it sold
oftentimes it would be longer than that
but not necessarily it didn't have to be
dramatically longer than that as long as
you price the home correctly and that's
always that's always an important thing
as far as contractors are concerned
there were contractors available and
it wasn't super hard to find good
people to do good work as long as you
had the connections
so how does this compare to the market
today
well it's similar in some ways
in terms of being able to just like
spend a weekend if you're a retail
buyer looking at homes and then still
have more homes to look at that's
absolutely not the case
now has it been more common for me
lately to actually look at a few homes
over on a Saturday with clients or
something like that yeah that actually
has become something that basically
disappeared from 2020 to 2022 that has
come back a little bit from 2020 to 2022
basically it was just there were so few
homes on the market that were going
under contract so quickly that was just
basically let's just look at we'll just
look at one home when the home comes on
the market we go and look at it if
somehow two homes that that fit your
criteria came on the market you had to
immediately look at both of those homes
so that that's different than what it is
today that today you can in theory
for some homes wait a few days and then
you know maybe look at two three four
homes over a Saturday it depends though
it depends on again how if the home is
is priced well at all and if it's in a
desirable area at all it's probably
gonna sell quickly you might not have
that that time so that's different than
than what 20 2012 to 2015 was although
it's a little bit less dramatic of a
difference than what it was during the
Great Recession for rental properties
as far as properties that can hit the
one percent rule it's pretty rare to see
that on market right now I'm not saying
that you won't see it but whereas in
2012 to 2015 there's an abundance of
those properties you could find those
you know all over the place right now
it's if you are finding something like
that on Market that is a diamond in the
rough so very very different Market than
today the ability to be able to
creatively find homes to flip
I think you can still do that today it's
just fewer opportunities
because the dynamic that I described
where where retail buyers back in 2012
2015 weren't really looking at
fixer-uppers they still have to look at
fixer-uppers today unfortunately the
market because things have gotten to be
so expensive and inventory is still so
low retail buyers are still having to
seriously consider Fixer-Upper homes as
they are looking at houses they just
don't have enough other options to to
consider seriously
and so you have to get you can find
creative flips if you're an investor
looking to flip homes but you have to be
even more creative than than back then
and so that's something that that
is again a little bit more similar than
it was during the Great Recession but
still very different we we have not
returned to anything it resembles the
2012 to 2015 Market
as far as the the length of time it
takes to to list a home and sell it
it's a little bit less now it's a little
bit less but
because the market is still in a
stabilization process it's still taking
a little bit longer to to sell a home in
this market and in this environment than
you would expect buyers are still are
still figuring it out
but we're starting to see that time
period start to speed up and that has
been indicated by the days on Market
it's dramatically slowing down they're
still going up the days on Market until
sale number as we discussed with the
march Market stats episode that I just
did recently the days on Market numbers
still crept up but only by one day which
tells me that there's a a good chance
that that that number either flat
lines or goes down as a result of
of all of properties selling more
quickly as buyers adjust and realize oh
okay
there's not going to be this huge influx
of inventory that all of a sudden comes
on the market and gives me all these
options that there aren't today I need
to take seriously my search today and be
aggressive right now we're seeing things
normalize given the low inventory
environment normalized by low inventory
environment standards I guess is what I
should say there
as far as contractors
contractors are are available but um but
it's hard it's hard to get in right now
with a with a good contractor most of
them they already have relationships
they are are choosy right you'll
you'll have contractors that are just
like you know what
I when you meet with them they're
interviewing you as much as you're
interviewing them because they can do
that they can be choosy in this market
and so even though it has slowed down
I've talked to my contractor friends
it's slowed down for a lot of them a lot
of them are still like you know what
there's enough business going around
right now that I'm gonna I'm gonna be
choosy with who I work with and I'm I'm
gonna give preference to those that I
already have relationships with
so what about let's go to the
pre-pandemic market how do we compare to
the pre-pandemic market 2016 through
2020.
this is a seller's market but not the
insane sellers Market that we saw after
the pandemic okay if a home went on the
market Tuesday there's a good chance it
would still be there on Sunday how does
that compare to today
not a good chance okay
if it comes on the market on Tuesday
if I have a client that's interested in
it I'm not encouraging them to wait
until an open house on Sunday to look at
it let's go ahead and look at it now now
if it is like they're set there if my
client is telling me I like this house
but it's about 15 to 20 000 more than
what I can afford okay maybe at that
point let's wait wait it out and let's
just see what happens because if it goes
under contract right away it's going to
go under contract pretty close to what
it's listed for whereas if it's still
under contract on Sunday or sorry if
it's still on the market on Sunday maybe
at that point it's like okay now we can
take a look at it just see what's going
on with this home and and you know
perhaps the seller would be open to
negotiate probably not 15 or 20K but
maybe five or maybe maybe even 10 grand
it just kind of depends on the property
there's a lot of factors involved there
during that market that pre-pandemic
Mark you would occasionally find good
deals on the market for rental
properties for flips Etc but but they're
few and and far in between and of course
since the pandemic they became after
the pandemic I should say they became
virtually non-existent that has come
back a little bit okay you will
occasionally find good deals on the
market now what I will say is that there
are more good deals for flips than there
are for rentals and for a lot of people
at least on market for a lot of people
what they're finding is that really the
best opportunities for rentals are for
short-term rentals for Airbnb types of
properties or perhaps 30-day rentals
things like that we do see some things
coming on Market with decent regularity
that I think could be that could have
short-term rental potential but as far
as properties that in my opinion would
make for great long-term rental
it the market has not shifted back to
what it was in 2016 to 2020 where you
could find you know a duplex for
instance in like Malden for 170
000 that same duplex today is 270 000
well rents haven't gone up enough to
offset the difference between those two
numbers
and so that's what has happened kind of
on the long-term rental market that that
doesn't necessarily mean that you should
avoid long-term rentals altogether
again that's more of a
question of your portfolio and and what
you're trying to do balancing out your
Investments it may make sense
particularly if you're doing like a 1031
exchange to purchase some sort of
long-term rental that maybe the numbers
aren't there yet but you can anticipate
that somewhere down the line in the in
the future as the Greenville Market
continues to grow that the rental
numbers and and the cash coming in
the income coming in from that property
will be better
because of because of that market
that 2016 to 2020 pre-pandemic Market
being a sellers Market you really didn't
see lowballs accepted with a few very
rare instances of major fixer-uppers
getting low cash offers so
this is a question that I guess
sometimes is are are you seeing a lot
of a lot of sellers accepting lowball
offers and of course that's kind of a
subjective term what does a lowball
offer
but the short answer is no matter how
you define it we're seeing sellers get
as we looked at in March over 98 of what
a house is listed for so no not really
so we're not really this is kind of
similar to what the pre-pandemic market
was we're not really seeing lowball
offers getting accepted really in in any
of any sort and that 98 number is very
close to what it was during the
pre-pandemic market we were we were
hovering right around 98 of what a
house was listed for was typically what
it sold for
and so we have very much returned to
from that standpoint what that market
looked it looked like
for rental properties you could find
some pretty good deals for properties
that needed some work you could hit the
one percent Rule now if you're willing
to put in The Sweat Equity right you had
to find a fixer-upper fix it up and then
at that point you could theoretically
hit the one percent rule
I don't really feel like this Market has
has gotten there yet this is where I
consider this market right now to still
be very different because so many people
are in the market for rentals
it's just a saturated Market with
Buyers looking for properties to rent
it's pretty hard to do that I'm not
going to say it's impossible a lot of it
comes down to like if you're a
contractor for instance it and you're
able to to put in The Sweat Equity 100
yourself and not have to pay all those
labor costs then yeah I I could see it
maybe being more feasible
but it's difficult again it's not
it's still not an easy Market to find
traditional rental properties in if
you're willing to go the short-term
rental Airbnb route you have more
options at your disposal at that point
with with house flips you had to
again going back to the pre-pandemic
market you had to be careful with your
flips because without massive
appreciation year on year if you went
over budget you could find yourself
underwater with no contingency plan
you couldn't just wait it out a year
and Bank Oodles of appreciation
this is very close to what the market
is right now and I and I know some
people personally that have gotten hosed
in this market who focus on flips and
they had just gotten used to this
rapidly appreciating Market from the
past few years that when that slowed
down and now we have appreciation
looking a lot more normal looking like
what it looked pre-pandemic
they found themselves underwater
on some properties
so the market looks very similar to
that market in that regard
I already mentioned this but I have
written down here the homes typically
sold for two percent less than what they
were listed for with sellers typically
paying some or all a buyer's closing
costs and typically took a few weeks to
go under contract bidding wars on
particularly desirable homes were common
I just read that straight off of these
are my notes from from June of last year
I could read that
that that could be a note that I
wrote for the market right now that
sounds almost exactly what is going on
in the market currently
that to a t basically is is what the
current market is
contingencies were acceptable and
cash wasn't extremely common so
contingencies such as home sale
contingencies inspection contingencies
things of the like
they have come back in Vogue those
contingencies were very difficult to to
get through particularly home sale
contingencies and and some other types
of contingencies were very very rare
from 21 to 22. those have come back now
what hasn't reverted is where I said
that cash wasn't extremely common from
2016 to 2020 cash purchases and cash
offers are much more common in this
market there's a lot more cash flowing
through this Market than there was in
2016 to 2020 so that means that you're
still if you have contingencies there's
a good likelihood that you're still
competing with those cash offers and so
it's not quite as easy still to get them
through as it was during that
pre-pandemic market but it it is easier
and I wrote down here in
pre-pandemic contractors were busy and
unreliable I think that there's a lot of
Truth to that in this market as well
although I already mentioned
the there are good contractors out
there
it just might be hard to break in
with one if you don't already have a
pre-established relationship with one
so out of all of these by far the market
has reverted back to that 2016 to 2020
pre-pandemic Market the biggest
difference is that there's still an
imbalance of demand and Supply that
favors sellers over buyers it was very
much a seller's market from 2016 to 2020
but it it's still in my opinion more of
a seller's market now than it was back
then
but more so than it being more of a
sours Market I want to Nuance this a bit
I feel like it is less of a buyer's
market I don't know if that makes any
sense but the the the point I'm trying
to make there is during 2016 to 2020
interest rates were still low inventory
was higher
and so there was it was a better
Market to be a buyer in
but a lot of the metrics from the
seller standpoint
mirror the today what the market was in
2016 to 2020. so it's not like it's
dramatically better or dramatically
worse for sellers now than it was back
then it's pretty similar and that's the
result of from a source perspective
Demand Being artificially suppressed a
bit I guess maybe you could some people
might argue it's not artificial but
Demand Being suppressed by these higher
interest rates but still being strong
and and as I've said a gazillion times
being stable
combined with the the fact that
inventory is still very low although not
as low as it was as it was from 2021
to 2022
and that's just a different Dynamic than
again than it was in 2016 to 2020
but that impacts buyers more than it
does sellers at the end of the day and
so so that I think is the most
interesting difference about this Market
versus the pre-pandemic market now
million dollar question right do I see
it reverting back to that post-recession
market or potentially that Great
Recession Market
at the moment no I I don't see that
happening
we would need some kind of an influx in
inventory for that to happen and I just
don't see where that inventory is going
to come from that's that is the the
million dollar question if if we knew
like everyone that that believes these
2008 housing people in particular that
believe that we're going back to the to
the Great Recession from a housing
standpoint none of them can identify
where all of this inventory is going to
come from that caused in a large part
what happened in the Years following
2008 this this great decrease in
housing prices this great
tremendous buyer's market that we
haven't seen since then that was fueled
by inventory that was fueled by a lot of
other things but from a rudimentary
standpoint the in the higher inventory
is what pushed that where is that
higher inventory going to come from I
don't know I've not seen it I'm not
saying it's impossible for it to happen
but you've heard my bold predictions I
don't see it I don't see it happening
and so right now I think we're
going to continue in this market that
resembles 2016 to 2020 a bit from a
seller's perspective but from a buyer's
perspective is somewhere in between that
and the and the the covid Market
that was a very difficult buyer's market
we're basically just in a coveted light
Market if you're a buyer right now where
it's it's challenging because of how low
the inventory is because of how high the
interest rates are but it's not as
challenging we don't have one month or
sub one month of inventory like we did
back then
there are homes that are priced fairly
reasonable that are sitting for a week
or two before they go under contract
that didn't happen during covid but
we're still having a ton of multiple
offer bidding war types of situations on
properties that have unique features
properties going on under contract
within 24 to 48 hours it's still
happening tremendously and we're still
having buyers on the retail Market
having to entertain fixer-uppers because
of they're just not being a whole lot of
other options available for them
and so that's what we heard today we are
we're in a market that that is
similar to this Market that we had
before the pandemic happened but it's
different in some very key ways so we
will continue to keep track of that and
if it does shift you will be the first
to know if it shifts any further
obviously it will shift at some point
but for it to shift more in the
buyer's direction we need to see
inventory basically come out of
nowhere and I just don't know where it's
going to come from at this point if
anything my concern is that once at some
point down the road mortgage rates start
to drop that we will see it shift
more in the seller's favor and at that
point it's going to become chaotic again
so enjoy if you're a fellow realtor
watching this right now and if you're
feeling a little bit slow enjoy that
because there's a pretty good chance
that it's going to pick up again I would
say if not this year then for sure next
year
with and by picking up I don't
necessarily mean a lot more closings I
just mean a lot busier I wish that
automatically translated to a lot more
closings but in this industry
those two things are not necessarily
tied together
so on that very happy note
I will end this this episode I
appreciate you guys watching and
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go ahead and reach out to me with the
contact information that is in the show
notes for any of your Greenville
Spartanburg Anderson Pickens all of
those areas around for all of your real
estate needs in those areas I appreciate
you guys and we will talk again next
time