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 Greenville South Carolina you can find all of my contact information in the show notes if you need to reach out to me for any of your local real estate needs just a reminder as always please take one second to like the video or the or the episode or the show make sure you're Subscribed hit the little subscribe button whatever platform you're on and if you can leave a rating or a review you know depending on what platform that you're watching or listening on I would greatly appreciate it that's the only things I ask of you guys so please go ahead and do that I wanna talk about the rental market right now this is a this is something that comes up quite a bit in conversations that I'm having with people and it just makes sense to go ahead and just record an episode about it right that way I can when I get the question I can just be like okay I recorded an episode and you can watch or listen to it and get all the information that you need from it but I'm just gonna go ahead and tell you up front what the rental market is like and then I'm going to support it with some data that I think you guys will find interesting it's a soft rental market from a landlord or landlady perspective it's a soft rental market right it's not it's nothing like what we experienced from 2020 through 2022 where the rental market was just going insane and there are good reasons for that and if I remember which this is that this is probably this is one of my least prepared podcast that I've had in in a while last week was really really busy for me so I'm hoping to come back to why I think that the rental market has swung so much since what it was from 2020 through 2022 but long story short it's not been a great rental market again if you're a landlord or a landlady for a while if you're a renter you're probably thinking well that's great right well in in theory yes but here's the thing it it's similar when it comes to home sales everyone thinks a buyer's market is a good thing for buyers but often times a buyer's market means that the economy is doing bad and if the economy is doing badly then that means that a lot of buyers aren't able to buy right they're either losing their jobs or they're taking pay cuts or this or that is happening whatever credit markets are tight all sorts of things happen it's the same thing with the world of rent and sometimes it can be a chicken or an egg kind of situation right which came first did the rental market get bad first or did renters not have the ability to move and then as a result of that or maybe not the ability to leave their parents or not the ability to go up to the next nicer rental that they would normally do and then as a result of that the rental market got bad right so we have to think about it from that perspective we tend to think about these things in in a very abstract terms but what it means when it's a bad rental market from a landlord perspective it functionally means that renters aren't able to move what it means when it's a buyer's market it functionally means that buyers can't buy now there's always gonna be the cream that rises to the top so to speak that are still able to do things in that are people that are still able to rent wherever they want to rent you know when the rental market is weak people that are able to buy wherever they want to buy where when it's a buyer's market yeah those things do happen but those are the exceptions not the rule speaking of exceptions and rules you might be listening this and saying well huh I've not been seeing any issues with my rentals maybe you own some rental properties maybe you own a lot of them I don't know and maybe you're looking at your data and your vacancy rates and and your cash flow and all of that and you're thinking hey what he's saying doesn't make any sense cause I'm not experiencing any of that I don't know anyone experiencing that and my response to you is exception meet rule right and like I said I'm going to support everything that I'm discussing here with data but I wanted to go ahead and just lead with this reality it's not been a great time the past few years to be a a landlord and while I had read some things saying that maybe that would flip this year everything that our government is doing overseas right now is not going to help any of that cause that's a drag on our economy and that eventually is a drag on the rental market as well again something I'm gonna get to here in a little bit but let's talk about the actual data and I'm gonna pull up the Calculated Risk Substack blog by Bill McBride really fantastic I I'll be honest I don't pay for the substack I'm not a big sub stack pay your type of guy but if I did this would be one that I would pay for Bill McBride does a lot of number crunching you guys know I'm a number crunching sort of guy I really appreciate and he crunches numbers in the real estate market in all sorts of different ways but basically he analyzes the rental market every now and then and the conclusion that he came to for the most recent month of data that he analyzed is that rents were up point four % month over month and if you're hearing that you're probably thinking huh well doesn't that go against what you just said no because there is seasonality in rents always go up month over month this time of year that happens every month and if you're looking at the bar chart that I'm that I've got if you're on YouTube you can see there is built in seasonality every year during the spring and summer the month over month rents go up every year during the fall and winter the month over month rents go down okay so just like in the standard real estate resale market there is seasonality in the rental market as well the important thing though is that we don't ever analyze real estate data from a month over month perspective I mean I guess there can be sometimes where that's helpful but if you guys have listened to this for any period of time you know this is a year over year podcast that is always what I'm gonna be focused on because that tells you directionally where the market is heading more than month over month data which again is influenced by seasonality unless you pull that seasonality out and some statisticians do that have ways of doing that there are seasonally adjusted numbers that that you can look at sometimes but unless you pull that out really the best thing you can do is look at year over year well that's where this is a little bit different if you're looking at the this chart that I'm showing you can see that there is a description a little a couple of paragraphs beforehand that explain that rent prices nationally this is national data I'll get into local data here in a bit too but rent prices nationally are down 1.7% compared to a year ago year over year rent growth is now at the lowest level that we've seen in our estimates going back to 2017 surpassing a record set in the early months of the pandemic the national median rent has now fallen from its 2022 peak by a total of 5.5% so rents have gone down 5.5% since 2022 and this is not adjusted for inflation so it's gone down even more than that okay if you adjust for inflation I'd really like to see this data adjusted for inflation I think that would be interesting if you look at the vacancy rates vacancy rates again month over month held steady at 7.3% but if you go back in 2019 before the pandemic it was below 7% it was hovering just above 6% right in that 6.2 to 6.3 range was where we were in it and it even went down to I think about 6.1% as we approached 2020 and then of course during the pandemic the vacancy rent vacancy rate went way low below the 4% line at one point and that was when things again were going really really crazy in the rental market how crazy that there was like weightless for rental properties if you owned rental properties you had weightless you had people getting into bidding wars over like security deposits it was insane I've never seen anything like it I've owned rentals since the early 20 I've never seen anything like what it was like from 2021 through 2022 and I guess you know a little bit before then 2020 as well it was a crazy it was a great time to own rental properties and obviously it wasn't going to last nothing you never have bidding wars over security deposits and things like that that's not a healthy dynamic that's not something that we for from the standpoint of the entire market we don't want to see that obviously you love to see that if you're if you own rental properties but if you if you simply love the economy and our country you don't want to see that okay so let's look at some local data here now I am going to show you guys something different here I'm gonna show you my Claude desktop so I've been playing around you guys know I like AI I've been playing around recently with Claude and I've been very impressed with Claude there's a lot of jokes on the internet about Claude versus chat GPT I'm not gonna get into all of that on this show but I am aware that the Claude users tend to be a little uppity about their Claude usage I'm going to try to not do that but I will say in terms of crunching data I found chat GPT to be good at crunching data but not I didn't care for how they produce charts I asked Claude to produce some charts based on some local data and I was pretty happy with how it did so I've got 4 charts here on my screen basically showing crunching data from Greenville from 2021 through 2025 regarding what's happening in the world of rents in this area so the this data is not going to be perfect because this is all data I had to pull from the multiple listing service well a lot of rentals are not in the multiple listing service but there's enough data in there in general that that we can draw some conclusions particularly when you're pulling a uh you know basically a a 4+ year sample size which is what I did and so here's what we've got we've got that that rents have for sure gone up since 2021 when the rental market really took off they went up and if it I'm looking at the upper left hand chart right now which is all property types asking versus actual rents now here's the thing in the multiple Listing service there's often times not a huge if any difference between asking versus actual rents because often times people will just enter we'll just adjust the price for the rent for the asking rent and then it ends up just matching what it ended up renting for so if you see some data that seems a little bit odd here that's what's happening but long story short we had average rent in 2021 was about 15 dollars per month that went all the way up to in 2023 1855 that's the median the average is similar the average was hold on so the app and this is where the chart is kind of failing me a little bit but the average was right around 15 as well soared all the way up to 19 in 2023 but since 2023 some interesting things have happened in 2024 the median went down to 1799 and in 2025 basically stayed the same at 18 the average in in 2024 went down from 23 from 19:03 in 2023 to 18:00 sixty eight in 2024 and then back up to 19:01 in 2025 that's still below what it was in 2023 okay so rents in Greenville in the greater Greenville market have come down the past two years okay and again this is not inflation adjusted so it's come down even more significantly if you're if we're talking in terms of real dollars if you look at single family only okay single family only the median again topped out in 2023 at 1950 in 2024 it went down to 1895 and in 2025 it stayed flat at 1895 so we basically when you're looking at and so that's for single family all property types or single family you look at the median rents they have been basically unchanged the past couple of years but down from their peak in 2023 now the average in terms of single family has gone up a little bit alright it's up to 1994 on average versus 2023 was 1978 but again I prefer to look at the medium than the average whenever I'm looking at this sort of data now it gets really interesting when you start looking at the median actual rent by property type OK and so Claude broke this down into single family townhome or condo slash other and here's what we get when we look at that again single family and condos well hold on hold on single family we'll start with that that's the one that people are the most interested in again topped out in 2023 at 1950 went down in 2024 to 1895 dollars a month and then went down to 1875 a month in 2025 so we're seeing three straight years of rent declines not including the inflation adjustments that would make those even more steep declines okay if we're looking at condos. Condos peaked in 2022 at 1495 then in 23 went to 1450 in 24 13 95 and in 23 13 35 so now we've got four straight well really three straight years of condos not seeing not pulling the sorts of rents that they did in prior years and if you guys have listened to the show for any period of time you know I've been out on condos I have been out on condos I've been telling you guys this for years and this is one of the reasons why I foresaw this dynamic happening too many people you know when it comes to condos right they don't have yards they have shared walls and a lot of our condos in in this area are old and starting to be in a state of disrepair people have dogs and some people have cats almost everyone has a pet now and so they want a yard condos don't have yards they don't want that the there's been a tremendous amount of new construction the past few years but not as much on the condo side of things and particularly not as much on the condo side of things in the multiple listing service okay all those apartments that you see you know if you're if you're driving around and angry at all the apartments that have been developed those for the most part are not gonna show up in this data okay so this data is a little bit skewed when it comes to the condos but again we're looking at a sample size we're seeing the direction of where the market has gone and so I it's still fair to say that rents have gone down for condos because the those new construction condos and apartments and what not those are an anomaly right if you're listening to this you're probably not a big box developer looking to put in a huge apartment community you're probably a small time landlord or landlady and you might have a small little portfolio of condos and so you would be affected by this dynamic now the interesting one is townhomes. Townhomes actually did better had their best year in 2025 of all these different years and the townhomes single handedly kept the median and average up for the all property types we if we didn't have condos doing what they had done then we would have seen the median for all property types be lower in 2025 than it was in 24 and 23 so the townhomes topped out this past year at 1875 a month it was sorry correct that 1795 a month it was 17 a month the year before and then in 23 it was 1734 a month so it went down a little bit in 24 and then hop back up to 1795 in 2025 be interesting to see if that continues I do think a lot of this now is new construction coming into the data cause there are a lot of townhomes that have been purchased by mom and pop landlords in order to simply be rented out to someone but there's the other dynamic as well that townhomes tend to be cheaper than single family homes and that's again in this data for 2025 a single family home was 1875 a month whereas a townhome was 1795 a month you know that $80 a month on average might not seem like a lot but that actually is a a substantial amount for the average renter because you've got to you've got to consider that also causes their security deposit to go up that that causes their you know that might impact their in in terms of the numbers that the that the property manager or the landlord or the landlady or whoever is looking at influence their ratios and all of that so there's a lot of stuff going on and here's the final piece of the puzzle that I think is interesting to the average days on market and the medium days on market have steadily continued to go up since 2021 every single year there has been an increase let me see if there was an increase from 23 to 24 yep every single year we've seen an increase so the median days on market for rentals was 22 days in 2021 it was 35 days on average so the median the average 35 the median 22 back in 2021 that's gone up every year to where now the average is 59 days on market and the median is 39 days so that's a substantial increase right we're talking about you know what like a 40% increase on the average and we're talking about almost yeah over a 40% increase on the median that's a that's a big increase right in terms of how long these rental properties are sitting before they actually get rented out and if you're a property owner that owns rental properties having a rental sit for 60 days for two months without getting a tenant that's a long time you don't want a rental sitting for two months just vacant you're you still have expenses you still have to pay insurance you still have to pay maintenance you still have to pay for the lawn to be mowed you still have to you know absorb a lot of cost there's a cost to just having that property just sitting there doing nothing for you now are there some potential tax benefits to having rentals yeah of course talk to your accountant about that you know in theory those losses can help to offset your income taxes a bit but you know what's better than offsetting your income tax is having higher income tax because you're making more money right nobody wants to just lose money just so that well I wanna lose money just so that my taxes are better no you wanna make more you wanna make money to pay for those taxes that that's the better way to do it now why is this happening okay and I did remember I did remember to come back to this and it's interesting because I see a lot of hand wringing about this like wow what's why is the rental market like this and I and I see a lot of theories being put out there that it's because of this or it's because of that I I think it's really simple right it took off during the pandemic housing boom why did it take off during the pandemic housing boom and why has it gotten so tight the past few years to me it was really really simple in the moment during that during that pandemic boom the reason why we kept seeing over and over again these waitlists these people getting into bidding wars over security deposits over their monthly rents all of that was because they had money they had liquid cash in their bank accounts why did they have that because we threw around so much stimulus in our government they had so much cash in our pocket in their pockets it's the exact same thing that happened to the housing market everyone well in in that case it was twofold people had cash in their banks and there was the really really low mortgage rates in the case of the rentals it wasn't quite as crazy as the housing market was because we didn't the low mortgage rates didn't you know affect you if you were renting it made you want to not rent but it didn't affect you in any positive way but what did affect you is that if you have more cash in your pocket now let's say that you've been wanting to move let's say you've been in that in that condo that you know the neighbors are just noisy they're always fighting and the wall is super thin and the dog wakes you up every morning barking at the squirrels at 6:00am whatever and you've been wanting to move but you just haven't had the money to pony up for that that next house that needs gonna have a higher security deposit and it's gonna be higher rents and all of that well all of a sudden you're getting these stimulus checks in the mail and what not and it's like I can I can actually do this I can save a couple of months of my income and these stimulus checks and now I can actually make that move that's what was happening well guess what's happening now nobody has money in their bank account the economy is bad right the economy is single handedly in my non professional opinion cause I'm a realtor I'm not an economist but I do follow these things I do track these things very closely the economy is bad for most people in the middle class and it's really bad if you're if you're in the lower class right the only people making a lot of money right now are the people that already had money to begin with and there's a very simple reason for this and well I shouldn't say that there's a very simple reason for this but it's just been that people have been ignoring what's been happening in our economy because the stock market appears to be okay and the stock market's been propped up by artificial intelligence by other similar things like that where and we're starting to see some cracks in all of that that I think I think could be a big warning a big indicator of something bad to come I hope not I'm not predicting that but we do need to start looking at these fissures looking at these cracks in the data and thinking okay what's the possibility of a of a recession I've heard a lot of chatter about that lately and again we're looking at this data renters are having a hard time you think these renters want to be stuck where they are you think that that do you think that they're happy that that they can't move no a lot of people wanna move right now whether they wanna move from being a renter to being a home owner whether they want to rent a nicer place and they can't do that they can't do that because they don't have the cash to move it takes cash for a renter to move to a new rental property and so these are all the things that are happening so keep this in mind I've been talking a lot of people out of buying rentals lately and you know should I be doing that is that good for my business it doesn't matter it's the right thing to do it's the honest thing to do what I don't want is to have you know to convince a client oh you're gonna buy this rental property and make tons and tons of money and then they buy it and make no money and are losing money and now they're calling me and they're angry at me I don't want that I would rather not make the commission check but have my conscience clear then then make the commission check and be receiving those phone calls and have a client that's not happy that feels like they had the wool pulled over their eyes and so I'm just gonna be honest with you guys this is the state of the market right now does that mean it's not the right time to buy not necessarily right so you have to keep this in mind sometimes the best time to buy is the dip right actually a lot of people would say that is the time to buy the dip we're in a dip right now right we've talked about it when it comes to when it comes to resales in general we're seeing some slight price corrections in the Greenville market we're seeing that when it comes to rents as well some landlords and other investors are going to look at their portfolio and be like you know I got to get rid of some of these properties they're not doing well it's time to move off of them and some of these people might be willing to sell a property for substantially less than it would have been worth in 2023 because rents were higher right everything penciled better back then so you've got to consider all of that it might still make sense to buy a rental property but I am telling people if you expect to be profitable in your first year owning a rental property you need to recalibrate your expectations expect the first year to be unprofitable because that's just what the data says we don't know when that when this data is gonna turn around it might be more than a year it might be two years before you actually turn a profit might be three years you we don't know we know at some point if you if you make a wise purchase you will have a profitable year but it's not normally the first year and in this sort of environment it's definitely not going to be the first year so you just need to be prepared for that you need to be prepared that you're gonna have to be paying money out of whatever source of income that you have you're gonna have to be paying in order to keep that rental property afloat to pay for all the expenses related to that and you might not get rents that exceed what your total costs are you may not and we just need to be honest about that and just recognize that that's the case as a result of that I know a lot of people that have pulled out of buying rentals in the Greenville market that that's a real thing and you know at some point they'll be back right the rental market will correct and really the question is should those people wait until the rental market corrects or should they buy now so that they have the property in place for when it corrects and then then they can just make a lot of money that's the question right now for most people that's what they're what they're dealing with for everyone is different so there's I'm not gonna tell you now is the time to buy it might be in your situation it might not be you need to assess what your financial goals are how much you need to have enough cash in the bank to be able to float a property that might be vacant for several months that might not make money that you might that might be losing money for a couple of years maybe more than that who knows if you're prepared for that then you at least have your expectations calibrated and then if it does better than that well that's gravy and that's the position that you want to be in as a as a real estate investor and so I I try I tried to coach you guys for years and years on the show I started as a real estate investor before I became a realtor and so I've Learned this honestly like this is not just textbook this is not just me looking at charts I know this for real and I've seen it with my own rental properties the rents are not what you would expect for the way the market is right now the vacancies are higher renters are more mercurial than ever and we need to just be honest about that and see here's what the data says both national and local data confirms that rents have gotten softer the past two three four years and is that gonna change anytime soon I don't know I don't unless there is more cash in the economy which can only happen if there's government stimulus or if the economy dramatically improves and I don't really see either of those things happening anytime soon so I'm kind of like this might be for a few more years and that might not be what you wanna hear but that's what you need to hear and that's all that I'm ever gonna tell you guys not what you wanna hear what you need to hear so thank you guys so much for tuning in appreciate all the support please like rate review subscribe to the show if you need a realtor my contact information is in the show notes love you guys hope you guys had by the way a wonderful Easter I don't I don't wanna fail to mention that had a really good Easter myself hope you guys had had a great one relaxing good Easter brunch good church service all of those good things thank you so much for listening as always we will talk again next time!