A Real Estate Market Shift in Greenville, SC?
I’m writing this on October 31st, so Happy Halloween! Usually by this time in greater Greenville, the leaves have already donned their autumn finery of golds, oranges and reds, slipped into their brown winter garb, and fallen to the earth. This year is different. Thanks to unusually warm summer temperatures and weeks with very little rain, the leaves have hardly started to fall. Many trees are still green. Those that have begun to change color are donning mild shades of yellow. Autumn in the Upstate of South Carolina is exhibiting some unusual characteristics.
What’s unusual autumn weather have to do with the Greenville housing market? Good question. Here’s my answer: Although the housing market remains strong, first-time home buyers, investors, and sellers need to note—and capitalize on—some unusual characteristics of the housing market in Greenville, Greer, Simpsonville, Travelers Rest and other areas in the Upstate of South Carolina. Buyers and sellers who understand what’s happening in any housing market always benefit. The benefit multiplies when markets begin to shift. And Greenville’s market is showing signs of being at the very beginning stage of a shift.
The greater-Greenville market is still strong.
Comparing year-by-year numbers shows increases in the number of new listings and the number of closed sales. More houses are coming to the market, and more houses are being sold. That’s what you’d expect. Sellers receive an average of 98% of their home’s asking price. This also indicates a healthy market. Both mean and median sales price are still rising. And, the Greenville average DOM (days-on-market) is still significantly below the national average. So, our real estate market is still quite strong.
It’s good to remember that the housing market IS cyclical.
By nature, every 20 years or so the U.S. housing market runs through cycles of crash, recovery and expansion. This has been the norm for over 200 years, except for two oddities—WWII and 1979 with its very high inflation. The fact that the market is starting to shift isn’t cause for alarm. Rather, it is a time for careful analysis. Strong markets entering a shift present great opportunities, especially for buyers. Investors, first-time home buyers and move-up buyers all stand to make excellent purchases if they understand what those cycles mean.
Here are a few statistics indicating that a shift is beginning.
· A slight increase in the local DOM. Homes are staying on the market just a bit longer than they were even a couple of months ago.
· An increase in the months’ supply of inventory. Over the past year, the greater Greenville market’s month’s supply of inventory jumped from 3.5 to 4.7 months. As this number approaches 6, the market officially shifts from favoring sellers to favoring buyers.
· The housing affordability index in Greenville continues to decline. This index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data. Since the spring of 2019, the Greenville area housing affordability index has slowly declined, meaning that it’s getting slightly more difficult for the average family to own an average home.
What does the data mean for prospective buyers or sellers about to enter the market?
· Market knowledge is key to thriving in any housing market, but it’s especially critical during a market shift. By definition, market shifts mean changing market conditions. A knowledgeable realtor can help you maneuver around the difficulties and anticipate the changes.
· Pricing a home correctly when it first hits the market can make the difference between quickly selling a home at market value, or having a home languish on the market, and then sell for a discounted price.
· Buyers who plan to borrow money from a commercial lender really must know how much home they can afford before they start looking for a home. Pre-approval takes ten minutes and can be done online, so there’s no good reason to house hunt without knowing that a lender would be will to front the loan.
We'd love to provide you with a market analysis for your home or talk to you about your next home purchase. Email Mick today at email@example.com.