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 I'm a realtor here in

the Greenville area you can find all of

my contact information in the show notes

if you need a realtor in the Greenville

area or even outside of the Greenville

area I'd be happy to help you with all

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guys who do that today

we are going to be talking about an

exciting topic sellers dropping

prices on their homes and at first

glance doesn't sound super exciting but

for me I'm a bit of a data junkie I'm a

bit of a nerd I get excited about

this kind of stuff because a lot of this

stuff is not just out there in the

public domain right the greater

Greenville Association Realtors releases

Market stats every month they have not

yet released this months which will

essentially be March's march 2024's

Market stats we don't have those yet so

we'll have to talk about that

probably next week's

episode but when they're doing that

when they when they're releasing that

data one of the things that they don't

release is the amount of price drops

that are happening and and the data

behind price drops but we know a lot of

price drops are happening I had someone

recently tell me who's looking to

relocate down here from the Northeast

that they're Amazed by how many price

drops that we have in the Greenville

market and that kind of got me thinking

are we seeing price drops that are

greater than normal what exactly does

that look like what does the data tell

us this is important for both buyers

and sellers right if you're a buyer

you want to assess you know how many

listings are are dropping their prices

and if you're a seller knowing

what's happening on that front can help

you to more appropriately price at

home so here's what I did I looked at

the past six months and I analyzed the

the data for listings that have

dropped their price the past six months

then I took the exact same six months

and looked at the data in 22 through 23

21 and 22 2019 to 2020 and 2018 to 2019

this gives us a good sample size going

back well before the pandemic

through today

and I think that that sample size can

can really tell us a lot about

what has happened historically and what

is happening now so we're going to start

back in

2018 through 2019 basically the six

months if you want to think about it

this way think about you know we're in

mid April I'm I'm recording this I

went back essentially six months from

from the end of March for each of

these so think about the these 6

months beginning prior to March 2019

that's the sample size that we're

looking at here here's what was going on

then we had a lot of price drops back in

2018 and 2019

34.2% of listings that sold okay I only

looked at sold listings I did not look

at listings that didn't sell listings

that don't sell skew the data right

because a lot of those will have

price drops

and then ultimately not sell I didn't

want to include those because

properties that don't sell after

they've had price drops had to have been

really really overpriced or or would

have had to have had really major

problems I don't want to spoil the

data with that so I only looked at

sold listings and in the six-month

period of time that we're talking about

from 2018 to 2019

34.2% over a third of of sold

listings had a price drop at some

point at least one price drop during the

time that they were listed the median

price drop was

$10,000 okay so if if you had and and

that number by the way does include all

price drops in there basically what I

took was the first list price and then

subtracted the final final list

price now I didn't subtract out the

final sold price right because we are

only looking at Price drops right not

not the not how much less that the

seller took we already know that data

that data we do talk about in the ggr

market stats it's typically around 98%

right most sellers are getting

98% of of what they have a home

listed for and of of that sample size in

2018 to 2019 34.2% of them got that

after they had already reduced the price

by

$10,000 what about the same period of

time from 2019 to 2020 well remember

covid happened in 2020 so I cheated a

little bit for this date range and I

took it back one more month so that we

were basically taking the data from the

end of February of 2020 and backed it

six months from that because I did not

want things to be skewed by all the data

you know in March of 2020 was crazy

because people bumped up

closings realizing that that

lockdowns were potentially

happening and then once lockdown

happened basically we had several

weeks of no real estate until kind of

people figured things out so I avoided

that just for this one date date

range that we have here but for this

period of time 2019 and 2020 a little

bit higher and at this time in the

market rates were starting to go up

there is a direct correlation between

rates going up and price drops going up

so price drops went up to 36

82% so that is basically a 2 and a

half% increase from the year

before U but the median price drop

remained around right at

$10,000 and so here's what we have

basically those two years we have the

number

hovering let's just call it 35% of new

listings or or not of new listings 35%

of listings that sold had to drop the

price at some point for the period of

time between 2018 and right before COVID

let's go into the period of time

right after

that I'm going to skip ahead one thing I

didn't do is I didn't do 2020 through

2021 again that was a weird period of

time I don't want to skew the data with

all of this all the weird Co stuff by

the time we get to 20 21 now we

have people by now have gotten used to

the pandemic they understand you know

what's going on and now we can kind

of give more accurate details so let's

look at 2021 through

2022 during that period of time price

drops went all the way down to

16.27% so we had a 20% reduction

between 2019 and 2021 in the number of

price drops again we're looking at the

same month period of time however the

price drops that we did have were higher

the median price drop was

15,000 but it was just on a much smaller

number of much smaller percentage of

listings and remember there were a lot

of new listings coming on the market

during this period of time because a lot

of people were were moving and selling

trying to take advantage of the hot

market so the fact that it was 16.27%

betrays the fact that there were

substantially more homes sold during

this time period how many you say well

I've got that data point too

8323 how does that compare to the sample

size we just looked at from 2019 and

2020 it was only

6,656 that sold in that sample size so

not only do we have a smaller percentage

but we have a smaller percentage on much

more homes that were that were

sold and like I said the amount went

up the amount of the price drop went up

to

15,000 I'm not exactly sure how to

explain that outside of I can for one

thing see that there were a lot more

expensive homes that sold during this

period of time so that obviously skews

the data you know I saw a home recently

just yesterday as I was kind of

looking through some data a home that

was like listed for you know 2 million

something that was advertising it it

just dropped the price by

$5,000 well a $50,000 price drop is

massive unless it's a $2 million listing

then it's kind of a drop in the bucket

right if someone can't afford a $2

million house if you only drop the price

by 10,000 they're still not going to be

able to afford it so at that price point

you have to make much bigger drops so I

think that that's part of what was

happening here as well I think probably

part of it too was what we had during

this period of time was a lot of people

that you know when the market was so

hot they were listing their homes for

way more than what they were worth and

then they would realize okay yeah the

this home isn't worth it because all of

my neighbors have already sold their

homes and mine is still listed and so

they have to reduce the price more

dramatically and so I think that that's

part of why that number is higher but

the but the number of sold listings that

had to have price drops went all the way

down to 16.27% between 21 and 22 well

then of course we had mortgage the

mortgage rate shocked that happened in

2022 and so we look at this data from 22

to 23 and it's like looking at a

completely different Market the

percentage of price drops on sold

listings by the way the sold listings

returned back down to 2019 levels

6,896 is the sample size I'm looking at

for this six-month period of time

39.6 2% of sold listings had price drops

during this period of time and the

median price drop was

19395 both dramatically higher numbers

than anything we've seen basically 40%

of listings and close to a $220,000

average or median price drop on those

40% I'm just going to skip ahead to

the last 6 months because the numbers

are eerily similar we just said

39.623119

so we're hovering right there in the

high 39% let's just call it 40% 40% of

listings right now that sell are having

to drop a price what is the median is

15,500 so the second highest number that

we have on here and and so this is

the environment that we find ourselves

in right now people buyers and sellers

both need to understand 40% of listings

are having to drop their price at some

point and on average the homes that do

drop their price again I shouldn't say

average because it's not average it's

Median on median I don't even know if

that's the right thing to say but the

median price drop for that 40% is

15,500 so there are some numbers to work

off of so if you see a home that has

already reduced its price and it's only

reduced it by say 5,000 you might have

some room to to negotiate additional

price drops in addition to that because

that is below the average or median I

don't know why I keep doing that below

the median price drop so those are

I'm not going to get into a ton of of

the strategy because really

that's kind of a flawed example right

not every home is equal like I already

said that a $2 million home having a

$115,000 price reduction is a drop in

the bucket they need to to reduce the

price by a lot more than that on the

flip side a $200,000 home reducing its

price by 15,000 is a huge price drop

right because these things operate on

more of a percent term than anything

so keep that in mind as you as you

hear these numbers but 40% of new

listings right now are having price

drops now why is this

happening well buyers right now and I've

alluded to this in the past but I'm gon

I'm going to go on a little bit of a

rant here buyers right now are very very

picky and I'll I'll explain why in a

second but I want to give some examples

of some of the things I've heard these

are just on homes that I've listed or

showed the past basically since the

start of this year since the start of

2024 things that I've heard people say

about homes that they are passing up on

here are a few examples I don't like

the neighborhood okay understandable but

the home that I have in mind where I've

heard this from people is a neighborhood

that's in an established quiet area in a

great award-winning School District I've

had multiple people say I don't like the

neighborhood it's it's a great

neighborhood big yards quiet like I

already said people walking

around and not walking around because

they don't have anything better do but

like you know like single moms walking

or I shouldn't say single moms like moms

walking around with their kids and and

dogs kind of kind of neighborhood I

don't like the neighborhood is is

what I've heard from some people

overpriced that's what I heard

from some for a home listed in the mid

300s that needs some cosmetic work in

a neighborhood that consistently sells

in the 400s how can you say I'm sorry

that a home that only needs cosmetic

work is overpriced when it is greater

than 50 or $660,000 less than what homes

in that neighborhood are typically

selling for crazy crazy thing but these

are the things that buyers are saying

right now here's another one this

this one might be my favorite out of the

whole bit and I've got a bunch more that

we're going to talk about couldn't

handle the smoke smell obviously a heavy

smoker used to live there this is for a

home this is feedback I got on a home

that literally has a sign right at the

front door that says no smoking or

vaping near the house is allowed due to

someone on oxygen living in the home so

there's literally no way that there was

a heavy smoker in this house because

literally the person living there could

was on oxygen and would not allow anyone

that smoked their Vape to come into the

house I actually approached this agent

about it and this agent was

like I know what I'm talking about and

what I had to explain to them

was that what they smelled was

was a construction smell and that's

exactly what they smelled they disagree

with me they said oh I've got a

background in construction blah blah

blah yeah okay if you had a background

in construction you would know that work

has been done on this house recently and

the smells in the house are related to

to the work that had been done not

related to a heavy smoke smell that was

insane eventually that agent after

talking to them they they said well

you know our eyes were watering it could

have been a chemical that was used in

the cleaning yes that is very possible

but that's very different than saying

that the home had a heavy smoke smell

that's an insane thing to say clearly

you've never been in a home that had

smoke in it if if you think a home

that's clean and has a chemical smell is

Smoky again these are the types of

things that we're hearing too small

that was feedback I got and updates

are the old style on a home in one of

the hottest parts of Greenville listed

well below any of the comps in the

area it's listed below the comps in the

area the reason why is because it's

small and because some of the the

fixtures are you know old style fixtures

that you know that goes with the

territory you're getting a home in a hot

area for below market value what do you

expect oh by the way I I I want to

mention I want to mention that to go

back to the smoke smell thing so I I

took matters in my own hands I went

there I was like is did someone walk

through this house smoking right because

I was just so shocked to get that

feedback on a house that I knew for a

fact had never had a smoker in it so I

went there it didn't smell like smoke at

all I bought some air fresheners put it

in there and a week later we're

under contract so anyway I just I feel

Justified on that one all right go back

to this here's another thing I've

heard from buyers don't like that the

garage can't be accessed from the

interior of the home for a house in a

neighborhood that has many homes with

either no garaged or detached garages

that require a lengthy walk from the

house here we have an example of there's

an attached garage but it just doesn't

have interior home access obviously

people aren't going to like that but

it's in a neighborhood where some houses

don't even have garages or that the

garages are even further away again

people being

nitpicky here's another one didn't like

that the laundry room was in the garage

nobody likes that but this is in a

neighborhood where all the laundry rooms

are in the garage if you want to move to

that neighborhood you have to do your

laundry in the garage or figure out

another solution here's another one

there's a dead animal in the backyard I

mean really this is not a home with a

massive yard with tons of wildlife in it

if there's a dead animal in the backyard

most people obviously nobody likes to

see a dead animal but that's tells you

okay this is this is a neighborhood with

Wildlife a lot of people love that sort

of thing and I mean that the backyard

had huge matur trees hundredy old trees

and whatnot and so of course there's

going to be animals back there and guess

what sometimes they die had a squirrel

drown in my pool a few weeks ago

disgusting yeah nobody likes that but to

say that you're not going to buy a house

because of that is insane another one

ceilings feel low in a home with eight

foot ceilings guys eight foot ceilings

is the standard I know that you know new

construction they're typically doing

9 10ft ceilings but to say the ceilings

feel low for8 foot ceilings is insanely

picky passing up on a house because of

that driveway is too steep for a home

with a standard incline driveway again I

got that from multiple people for a

listing that that did not have a steep

driveway I've had listings with steep

driveways I know what those look like

right but this was not a home like that

there are some driveways that you know

if you have a a low vehicle you're going

to have struggles with it that is not

what this was I couldn't couldn't

believe how many people gave me that

feedack

back numbers don't work for a multif

family property hitting all the usual

income numbers that you would hit with

any multi-family property I don't know

what multif Family Properties they're

out there buying if the numbers don't

work for this one that I'm talking

about but that is one that I've heard

from a lot of people that either don't

know how to run numbers or don't

understand where the market is currently

another one I know this is a good deal

for a turnkey property but they want a

great deal on a property that just needs

some basic work

good luck that's what I say to you if

if you're passing up on good deals

because you're looking for a great deal

because you really just want a cosmetic

rehab that you can you know put some

money into and maybe get more rent

or whatever whatever it is that

you're shooting for at that point

good luck there's not a whole lot if

you're going to be that picky there's

not a whole lot for sale you're going to

have

struggles and of course here's one and

this is the last one that we discussed

last week in on my show I don't want

to get a SE get into Section 8

rentals because a Section 8 program is

unpredictable I had a whole episode

where I discuss that so I won't get

into detail on that right at this

moment

now those are a bunch of examples I hope

you guys enjoyed that I I could have

kept going I could have come up with

with a bunch more like I was just

sitting down thinking through this

before recording this and and I mean

these were all just coming and these are

all from the past three and a half

months that's the insane part of about

this is that these are all objections

I've gotten on my own personal listings

on homes that people have been

looking at the past three and a half

months the market is just picky right

now now I don't want to act as if buyers

are just being unnecessarily picky okay

I don't want to just throw buyers under

the bus I get it I understand they're

facing the most unaffordable housing

market in history that is undeniable

this is the most unaffordable housing

market in history at least for people

that are getting financing for cash

buyers it's it's not an unaffordable

Market but for people getting financing

it is the most unaffordable housing

market in history and that is in my

opinion what's spurring on all of this

buyer pickiness think about it this way

a person who has bought a who bought

a house a a few years ago for let's

just say

$200,000 and they had let's just say 3

and a half% interest rate right now they

are most likely looking at home in you

know if they're looking to move up

from the house that they bought for

200,000 a few years ago they're probably

looking at homes in the mid to low 300s

and they would have to if they're

financing they would have to get a

roughly 7% mortgage rate the difference

in monthly payment between this home

they bought for 200,000 at about a three

and a half% interest rate to a home in

the mid-300s at a 7% mortgage rate the

difference is going to be about $1,500

per month to make that jump now if

you're currently living in a place that

you like and you're about to pay $1,500

per month more to live somewhere else

you are going to be picky like that is

going to happen you don't want to add

$1,500 a month to your bottom line in

addition to adding the expenses of

having to then also renovate multiple

bathrooms live in a neighborhood that

isn't as nice as your current one Etc

you want to feel like you made a big

step up to pay that much more money per

month now remember this too and this is

a very very important context a person

who bought a home just a few years ago

for 200,000 and is now looking in the

mid 300s is barely doing more than a

lateral move because the average home in

Greenville in the greater Greenville

area costs just a hair above 200,000 in

2020 so four years ago and now the

average or the median is 300,000 so if

you put yourself in the shoes of a buyer

you have to think about the fact that

basically if they're moving up from a

house that they bought in 2020 for

200,000 into a house that in 2024 is

listed in the mid threes it's barely a

step up from what they currently own but

they have to pay $1,500 a month more

that is a really really hard sell for

buyers and this is why buyers are being

picky because they're just like man I

have to pay so much more to have an

actual step up for my current living

situation and and and that's

challenging really challenging in this

market for people that need financing

the other side of the coin is that it's

still proving to be difficult to price a

home that you're selling right if you're

looking to sell a home it is not an easy

Market to figure out what that home is

worth we've now had several years of

very very low inventory so some

neighborhoods just don't have a lot of

comps and we're kind of throwing a dart

at a dart board I really try hard

and I really pride myself in getting

great comps and really figuring out what

a home is worth but this is even

challenging for me in this market and so

you have Sellers and realtors just kind

of guessing in a lot of instances what a

home should be listed for and sellers

right now are really grappling with the

fact that the market isn't what it was a

couple of years ago I lost out on a

listing recently where I did a full CMA

comparable market analysis and then

concluded that the home should be listed

for around 250 I was willing to go up

a little little bit above that but I

didn't recommend it just based on the

state of the market well after I sent

the sellers all this information from

the CMA and I had very compelling comps

I had great comps I was very confident

in that price so I sent the sellers

the CMA this is after I'd met with them

and looked at the home and all of that I

sent that to them and then didn't hear

anything and I knew exactly what was

happening I didn't hear from them

because they weren't happy with

250,000 so so then not too long long

after that I saw that of course the

home was listed by another agent for

$300,000 and later the people sent

me an email thanking me for my

time which I appreciated but telling me

that they went with the other agent

because that agent was willing to list

the home for more than I was well guess

what the home hasn't sold I'd be

surprised if it's even shown to anyone

and it won't sell for $300,000 because

it is not worth 300,00

I would love to know if the agent that

listed it for

300 actually did a CMA actually looked

at comps and actually like did any

research to try to determine the home

value because there is no way that this

agent came up with 300 unless they were

just plucking numbers out of out of thin

air and I would say and I've said

this on the show before that agent did a

major disservice to those sellers

because they will most likely sell the

home for less money than they would have

had they listed it for the right price

to begin with because what happens we've

talked about this before on here when

you overprice a home then you have to

start dropping that price and once you

start having to drop that price you end

up you know the home doesn't look

good to buyers and and and they start

to get skeptical and start to wonder why

are there all these price drops what's

going on here and then you end up

usually selling the home for less than

you could have if you had just priced it

right to begin with if a home is under

priced usually the market will bring the

the price up to where it should be by

virtue of a bidding war but if you

overprice a home all that's going to

happen is it's going to sit on the

market you're going to have to drop the

price and then eventually someone's

going to come around with a lowball

offer and you're going to feel compelled

to accept it because

that you're wanting to sell the house

and you're not getting any activity on

it and suddenly you find yourself

accepting an offer that was lower than

you probably would accepted would

have accepted had you just listed it for

the right price to begin with so it's

not just I don't want to just blame

buyers I don't want to blame buyers at

all because I sympathize with Buyers

right now sellers aren't completely

to blame either because the market is

weird right now but sellers have to take

this data into consideration too you

ideally don't want to be one of the 40%

that has to reduce your price if you can

be in the 60% that's better right if

you're if I'm looking at your house

to potentially list and I say okay

here's the range right let's say I say

the range is the home could sell for

somewhere between 300 to

320,000 if it were me I would typically

sell or or typically list on the lower

end of that price point because that is

makes you more likely to be in the 60%

group than the 40% group because let's

say that you list it for 320 and then

after a few weeks of no activity then

you have to reduce it to 310 now

you're going to have buyers come in with

with offers at 295 whereas if you had

just listed it at 300 you probably would

would be getting you probably would have

gotten an offer pretty quickly at that

300 price point so that's the logic

there and that's what's going on but

there there's a little bit of data and a

little bit of anecdotal data that goes

into this and a little bit of an art

to go along with the science when you're

when you're listing a home if you are

listing a home though I explain all of

this right if we're talking about

this information

I make it a conversation with my sellers

I don't just tell them this is what the

home is worth and there's no

conversation sometimes we have a

conversation and they will you know my

sellers will explain some different

things and we'll kind of do a

little bit of a negotiation and then

find kind of a middle ground sometimes

that happens and it it just it

depends on a variety of instances like I

said if there's a lot of comps in a

neighborhood and we can really for a

fact

determine like really really with

with a high degree of certainty that's

the word I'm looking for if we can

determine the value with a high degree

of certainty then I'm going to be less

likely to budge off of what I consider

to be the value of the home because I

don't want to cause a disservice to my

clients I don't like to have listings

that just sit on the market for forever

nobody likes that it's bad for me as an

agent it's bad for my sellers that are

selling and so sometimes I have to be

like no if you want to go higher like

with this other potential client that

they just wanted a higher price then I'm

happy to say you know what the comps do

not under any circumstances justify this

price I'm not willing to list it at that

price but sometimes there might be

some other circumstances involved and

sometimes you know I might recommend

a price and the seller says let's go a

little bit higher I can still see that

the comps could justify that a little

bit higher price and I'll just warn them

this might put you into that 40% % Camp

of people that have to reduce their

price and that's bad but I'm going to do

my darnest to Market this property at

the price that we are listing it at and

try to to bring you a full price offer

or

higher so that's the way I approach it

and hopefully that makes sense and

hopefully this data and some of these

stories are helpful for you guys to kind

of understand the state of the market

that's all for today's episode my

contact information is in the show notes

as always please like like rate

review subscribe all of those good

things and we will talk again next time