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

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today I want to

talk about seasonality in real estate

because we have been through a very very

weird last three years I mean it's like

obviously an unprecedented amount of

time where mortgage rates went down to

their their lowest number that they

have really ever been and and now are up

to now a 20 plus year high in the mid

70s as I'm recording this on August 28th

2023 and so the market has just been

in a state of Chaos in a state of just

constant change now for three straight

years and the standard seasonality that

we have in the Greenville market right

real estate is seasonal there is a busy

season there is a slow season

and there are a lot of micro

Seasons if you want to say within there

which I'll discuss here in a second but

real estate is seasonal and I keep

getting the question and what I've

learned from doing this podcast is

that a lot of episodes really just

flow out of questions I'm getting if I

start to hear the same question from

multiple people over and over again

that's a good sign that this is

something that people are just

interested in and this is something that

I probably need to discuss in the show

so one question I'm getting from people

is the question about seasonality and

I just realized that I need to put my

computer on silent to make sure that I

don't get any distractions all right

there we go my phone is also on silent

all right we are good to go

so

we've had three straight years of

seasonality being completely Shipwrecked

from what the norm is and so what can we

expect this year what is kind of the the

the general expectation that I have for

the market

is it going to return back to a normal

seasonality is it going to be something

else is it going to resemble last year

or the year before or pre-pandemic or

what have you

and I want to start by just saying that

when I think about seasonality in real

estate I really think about two seasons

I've kind of already alluded to this

and as of as I've also already

alluded to you can really break real

estate down into a lot of different

seasons

there is for sure more than two

seasons of real estate but it's really

really simple just to think about it

in terms of two seasons

and for me as a realtor it's really

excuse me it's really the simplest way

for me to think about it and so

really the first half of the Year

generally speaking start slow and then

ramps up into the busy season of the

spring and summer

and then on the flip side the second

half of the year starts busy and then

gears down into these slow holiday

season and and this slowdown is

particularly noticeable after Labor Day

that's really when to me the second half

of the year really starts is after Labor

Day so here we are we're really really

close we're right on the cusp of what

for me is kind of the second half of the

of the real estate year

as I've already mentioned

we've had three straight years of

really that seasonality not really

acting in normal ways right so we had

two straight years where the fall and

winter were basically and from by a lot

of metrics

just as busy as the spring and summer

and that was crazy 2020 2021 that was

crazy and then 2022 we had mortgage

rates Skyrocket the second half of the

year and so we saw an absolute plummet

of business in the fourth quarter of

last year

and so that again was not comparable

to any previous years

so what is going to happen this year

what are we going to see in the second

half of this year well

everything goes through mortgage rates

right this is what we're talking about

everything that's happened the past

three years what's been so crazy is the

fact that we have had so many extremes

so many fluctuations with mortgage rates

and so is that going to continue this

year well this timing is good because

the Federal Reserve has had their annual

Symposium that they do

every year that's why it's annual

in Jackson Hole and we've gotten to

hear from Federal Reserve chair Jay

Powell or Jerome Powell same person

we've gotten to hear from a lot of other

Federal Reserve people other people just

in economics in general

and the chatter right now from everyone

that I've heard from everyone that I've

heard from that's there

parsing through what the different

people from the FED have have said is

that mortgage rates where they are right

now

they're pretty much going to be here for

the for the rest of the year I mean

there's still some Banks out there

that are projecting rates will go down

at the end of the year you would not get

that impression talking or or hearing

from any of the Federal Reserve people I

don't get any Impressions talking to

I'm not talking to them but from the

people talking to them and from hearing

them talking that we're going to see

rates go down in any meaningful way

during the year 2023

and so

what I think what it seems like is

the most likely scenario that we're

going to see is the Federal Reserve is

going to take a step back and say let's

see what we have done here let's let

this run its course for a bit let's give

it a few months and see what happens

with inflation and if inflation seems

like it's kind of under control because

here's what here's the reality of the

situation I'm no economics expert but

here's what I understand the impact

of raising more of raising the federal

funds rate which is what the Federal

Reserve has done which is having all of

these Ripple effects impacting different

things like the 10-year treasure yield

and and by implication the the

30-year fixed rate mortgage

what the Federal Reserve has done

has a lagging impact so when they raise

rates one month it doesn't immediately

impact the economy in some cases for

maybe half a year or longer and so the

Federal Reserve is seeing inflation come

down it's come down from like nine

percent to three percent depending on

how you look at it

but they still want it to come down to

two percent is the magic number that

they keep on saying and here's the

here's the strange thing a lot of people

thought oh with rates going way up

the labor market is gonna break wage

growth is going to go down all these

different things well we haven't really

seen that happen and so the FED

is really playing this cautiously and

they are not giving any indicators right

now that rates are going to go down but

they're also not saying that they're

going to go up like I said right now the

consensus seems to be from FED members

that they want to just stand down and

let's just see what the impact is over

the next several months from the rate

increases could we see a fourth quarter

one more rate increase I think it's very

po I mean we could see more than just

one I think it's it's very possible that

we could see

additional rate increases but

probably not for several months so I

think and my suspicion is that if I had

to guess I would guess we're not going

to see any more rate increases this year

we'll see though because Jay pal did

sound very hawkish

in some of his comments in Jackson

Hole

so again a lot will come down to what

some of these numbers look like as they

come in some of the numbers that come in

for the economy

so here's what we have right we

are entering the Slowdown

of the the standard seasonal slowdown

the post Labor Day slowdown with rates

mortgage rates at a basically a 20 plus

20 something year High

the that would lead some to believe that

we're going to see a second half similar

to last year when business just

completely went off the cliff and like I

said the fourth really the fourth

quarter of last year

but here's why I'm not so convinced I

think actually what we're going to see

is a market that resembles probably

something more like the pre-pandemic

market because we are finally in a

stable environment demand has stabilized

we're not seeing demand going crazy

we're also not seeing what we saw last

year where demand just was completely

stunted by the aftershocks of rates

going up so quickly now people have

settled into this High rate environment

they've come to grips with it this is

just the way it is right now we're just

gonna have to bite the bullet because

there's no indicators that rates are

going down anytime soon and so here we

go we're we've we've reached the floor

basically of demand that that is what it

appears to me by all indications from

what I can see in the data

so then what does that mean if we're

going to see something that resembles

previous year what does that mean well

we're going to return back to the

greater Greenville Association of

Realtors Market stats however

I want to be clear on something and

that is that

as I pull this up here for those looking

on YouTube you'll be able to to actually

view the market stats

we're not going to go through these like

we do every month I'm going to rather

than looking at the prior month I'm

going to be looking at historical

previous years and see what has happened

in previous years in the month of

September and in the seasonal slowdown

of the year and when we're going to look

at five slides starting with new

listings okay so if if you look at the

data you can see that new listings

essentially Peak every year during the

spring and summer months and then really

they they people don't realize this but

new listings typically start to come

back down after Memorial Day

and so and this is what I alluded to

before where there are there is more

seasonality than just the the standard

two seasons that I like to think about

it it's a lot more complex if you really

want to break it down there are a bunch

of seasons in in real estate

but that being said the busy

season

remains basically during the summer

months and so here's what we typically

see we typically see September and if

you're if again if you're looking on

YouTube you can see I've circled

September of each year going back to

2017. by the way if you want to look at

this on YouTube search for my name

Stan McCune on YouTube

I have a selling Greenville playlist

on my personal YouTube page that you

guys can can go on and watch this video

someone else has a sewing Greenville

Channel unfortunately I don't have that

but you can find me by by just

searching my name on there

okay so new listings data definitely a

big drop off from the peak of the year

until September and that happens every

single year that that we look at this

but how does it compare to the rest of

the year well first off I just want to

say that frequently you will see new

listings bump up in October and I've

spoken about this before that October is

one of the best months to buy in real

estate because sometimes the a number of

new listings and the inventory levels

can be similar to summer months but

the demand is much less so October

listen if you're a buyer right now and

you're just struggling you're not seeing

anything you're not finding anything

don't be discouraged the the September

October season is not as bad as you

might think it would be for I've sold a

lot of homes over the year over the

years in September October and November

not as many in December

or January but I've sold a good

number in September through November

all the people going under contract

August or October that then close the

month later

but yeah you can you can see that

oftentimes there is a little new

listings bump in October that's happened

frequently in in several several

years that you see this you see you

see a little bump

that I don't know if that's gonna happen

this year or not but it's something to

keep track of but more to the point

here's what I want to look at here's

what I want to compare September 2 is

what does it feel like or or what are

what's the new listings data in

comparison to like other times of year

so I've already said it's slower than

the peak time of the year there's fewer

new listings but what is there another

month that we can compare it to and the

answer is yes we can compare it to kind

of February or March okay so if you look

at 2017

this is I'm showing on on the

video the month of February

September's new listings was very

similar to February of that year in 2018

September was more than February but not

quite as high as March 2019 it was

very comparable to March of that year

and March was you know one of the one

of the higher months of the year 2019

2020 it was kind of right in between

February March 2021 it was very

comparable to March April and May of

that year was the month of September and

then last September was well we had

way more new listings than than these

months I've been talking about we're

talking about let's see here January

February March April basically it was

comparable to April May of that

year so if you want to get a sense of

okay what how many new listings are are

coming out in September of this year

it's typically comparable to February

slash March of that year okay so if you

hopefully you've not been looking for a

home since February or March of this

year but that's a good metric to compare

to that's when the market is really

starting to take off every year so even

though it's slowing down this time of

year it's at a comparable level to when

the market is taking off in the first

quarter of the year

first or second quarter again depending

on on what year you're comparing it to

and then like I already said in some

years we see an October bump where it

goes where we see even more new listings

for the month of October will be really

interesting to track that so how does

this impact inventory let's look at

inventory of homes for sale and here's

where things get interesting even though

we are seeing we're well off once we get

to September we're usually well off the

peak

of new listings for the year

and and that's likely what we're going

to experience this year as well we saw a

big drop off from June to July in

terms of new listings data and I suspect

that that will continue on into

September particularly with with

mortgage rates being higher mortgage

rates being higher does not help

new listings in any way but here's the

interesting thing even though new

listings come down September October

inventory is not impacted in the same

way

inventory in September and October

remains near their summer highs and and

you can look at this historically in

2017 it was a little bit off the summer

High but it was very very comparable

hovering right around 4 000 homes for

sale basically the entire summer into

into the September October season until

it dipped down so inventory actually

gets lower during the the main Dog

Days of winter months

that's when it's at its lowest a lot

of people don't realize that too A lot

of people are thinking okay inventory is

at its lowest during the summer months

right because demand is so high and and

that's what ultimately that's a major

part of what imp impacts inventory

because inventory is the number of homes

and active status these are homes that

aren't under contract so this is

directly impacted by demand but in spite

of that actually the supply side comes

more into into consideration in the

second half of the year and so actually

Supply decreases faster than demand does

in the fourth quarter so that's just a

little tidbit something to keep in mind

but what we see during the third quarter

of the Year even the new listings are

are really going down quite a bit off of

their Peak during the summer months

active inventory because again of of how

demand side economics is is impacting

things here inventory remains

historically very close to if not even

above the summer levels in fact in 2018

if you're looking on YouTube and 2019

the number of homes for sale was pretty

much at its peak in September which is a

very interesting thing to see now

2020, 2021, 2022

again those three years were really

really weird I don't really want to draw

any big conclusions from inventory

levels in those years

so I'm not going to but you can see

one thing that did remain consistent in

each of those years is that we did see

the standard inventory drop off that

happens in the fourth quarter

really the toughest months to buy

traditionally are November through

January that's the reality of the

situation very few homes for sale

and then once February comes usually we

start to oftentimes see things start to

turn the corner maybe maybe more like

March it depends on the year

but then inventory starts to increase

again new listings really start to

Skyrocket

around that time of year and then that's

when we start to to see things kind of

kind of turn the corner so if you're

looking to buy

in the second half of this year just

know that you've you're you've not

missed the window you have not missed

the window September October and parts

of November prior to Thanksgiving can be

a very good time to buy because even the

new listings are going down inventory is

still pretty high it's it you know if

you're in November it's not necessarily

at its peak of the year

but if you're in September October

it's going to be pretty close typically

to its normal seasonal Peak and that's

what I think we're going to see this

year for September I think we're going

to see it

in fact it if the the current Trend

remains September October should have

higher inventory than what we've had all

year so that will be something

interesting to track what about pending

sales

pending sales tends to be kind of

similar to the new listings data where

the number of homes going under contract

in a month Loosely compares to the

february-ish time of year so if you look

at this historically 2017 pending

sales were comparable to February

2018 pending sales was really basically

was even less than January

2019 it was it was a little bit above

February and then you know we've got the

three years where I don't really think

it's fair to compare anything to 20 20

21 or 22 when it comes to this pending

sales data so what does that mean not a

great time to sell okay just the reality

of the situation once we get into the

second half of this year it is harder to

sell a home that is just the way it just

the way it works unfortunately

and so

we we have this Dynamic again it's not

it's not really shifting to a buyer's

market but it's just if you're selling

you don't have the benefit from all of

the demand that you have during the

summer months and and it's just a little

bit more challenging to sell during the

fall months and this is a lot more

challenging to sell during the winter

months you can really see how things

really bottom out in December of every

single year every single year things

bottom out in December in terms of

pending sales

now why is this the case why are sellers

so impacted

a lot of this has to do with

buyers take longer during the second

half of the year they've got kids in

school they can't necessarily just run

out and you know go see a home daylight

is less during the summer months so

people aren't doing showing sorry

daylight is less during the winter

months so people aren't doing showings

at 7PM I you know I have right now

it's not uncommon for me to have

showings at 6:30 7:30PM we have

plenty of daylight that time of year

but you get into the winter months

you can't show a house meaningfully

after 5:30PM for a good chunk of the

year and so people have fewer fewer

hours that they can see a home and then

fewer days where they can see it and and

people are just busy busy during

during those school year months School

months I guess

and so that impacts things that

causes buyers to take more time and so

what we see almost every year and this

is the fourth slide on here is days on

Market until sale really go up quite a

bit after the month of September so the

average number of days when a property

is between when a property is listed

when an offer is accepted tends to

really reach honestly its bottom

right around the September months at the

very least it's comparable to the you

know if it reaches its bottom during the

summer months September is really

comparable after September you typically

start to see the days on Market go up

and so again that's because buyers are

taking longer homes are taking longer to

sell so what happens then is that

sellers become a little bit more

desperate they want to sell they want to

get under contract they want to see

their home as a pending sale not

necessarily as an active inactive status

home

and so they they get more

desperate and then that impacts the the

median sales price which I'm going to

get to in just a second I do before I

get to that I want to discuss one thing

one thing is kind of interesting is that

even with the the chaos of the past

three years there's really only one year

that bucked the trend of days on Market

until sale going down after September

and that was the end of 2020 into 2021

that's simply because that's when rates

went way way way down right and that's

when the market really took off we

thought in the summer of 2020 that the

market was the craziest day whatever

forget and little did we know it went

Bonkers in early 2021 really throughout

the entire year

and that's reflecting this data where

September of of 2020 was was one

of the higher days on Market until sale

months and then days on Market just

started going down and kept going down

for quite some time and then finally we

get to September of 2021 and it's

kind of near it's bottom at that point

it went up by the end of the year in

September in in 2021 and then in 2022 we

saw the days on Market go way way up

because remember the second half of last

year is is when mortgage rates

started going up and that directly

impacted our Market in in the real

estate world

and so every year we see this where

days on Market go up in the third and

fourth quarter of the year the only year

we didn't see that was the weirdest year

that we've ever had the coveted year and

and so this will for sure happen

again you can expect July our days on

Market until sale was 38.

I don't know what the numbers are

gonna be for August but one thing is for

sure you can expect the number is going

to be going up from August throughout

the rest of the year and this is what

then impacts the median sales price this

is what impacts this is why there is a

season a big reason at least why there

is a seasonality to prices in real

estate is because sellers get anxious

sellers want to sell they don't want to

have to wait they you know if their

neighbors sold in June their house in

two weeks and then they realize that

selling in October is taking a lot

longer than that they're going to be

more likely to accept a lower offer

and so I've got here the median sales

price with September circled it a lot of

years ends up going down as you get

towards the end of the year or into

January of the next year now again we

had a couple of years where that wasn't

the case we had 2020 at the end of 2020

where it went up ever so slightly

between September and December January

and then the end of 2021 it went way up

from September until through December

January of 2022 but then last year it

went back to the norm again last year

wasn't really a normal year we saw a big

decrease from September into January

this year I think we'll see something

more like the norm which would be a

slight decrease from whatever the

September median is to the median of

December or January of 2024.

and so again this is if you're looking

to buy this is something in the second

half of this year this is something to

keep in mind you might have some

opportunities obviously sellers are

still having a hard time Reckoning

with the fact that the market has

changed

but if you're a seller second half

this year you need to be aware of this

it's just going to take longer maybe you

stick to your guns

and try to hold out for a price that

that you think your home is worth but at

the end of the day you have to realize

that there is seasonality in this market

and these are some things that we can

expect so what what can you expect you

can expect new listings to really slow

down there's gonna be a lot fewer homes

new homes I don't want I shouldn't

say new homes because that can mean

literally new construction but a lot

fewer new listings coming on the market

inventory at least for the next few

months will will still remain at

comparable to Summer levels before it

really drops off the end of this year

you can expect for pending sales to

really start to take a hit in the second

half of this year

as opposed to the summer although we

might see a little bit of a bump in

October you can expect days on Market

until sale to really start to go up so

homes are going to start sitting on the

market a lot longer than they were

during the summer months maybe

substantially longer than they were

during the summer months

at one point when I did my bold

predictions for this year I predicted

that days on Market until sale would hit

70. it's not looking super good for that

prediction at the moment but hey you

never know it could happen

if it happens though

that'll be a real a real shock for

sellers

so I don't think at the moment that

that's that that's in the cards

but we'll have to see

and then the median sales price we

typically see at by the end of the year

a slight decrease versus what we saw in

in September, October of that year

does that mean that that there's all

sorts of Bargains everywhere that's not

what I'm saying I'm not saying if

there's like all of a sudden going to be

all sorts of Bargains in September

October I'm just saying that there is a

slight

change it's a little bit more relaxed if

you're a buyer it's a little bit slower

if you're a seller everything just takes

a little bit longer and this has a

ripple effect in terms of all of these

different things so I hope that makes

sense if you guys have any questions

about any of this please let me know my

contact information is in the show notes

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but that's all that we have for today's

episode I appreciate you guys listening

I hope you stay safe we will talk again

next time