It's official: the housing market in Greater Greenville, SC is shifting! For the past few months, the national housing market showed signs of significant changes--falling prices, longer DOM (days on market), and fewer pending sales. Until now, though, our local market hadn't changed much; we saw relatively few signs of a major shift in the Greater Greenville market through September. However, October's just-released numbers from GGAR (Greater Greenville Association of Realtors® remove any doubt about a Greater Greenville housing market shift.
The national housing market shift in a nutshell
GGAR’s October update included this pithy summary of the national housing market:
“Existing home sales declined nationwide for the eighth consecutive month, falling 1.5% as of last measure, according to the National Association of REALTORS® (NAR), with sales down nearly 24% from the same period last year. . . The US housing market is undergoing a major shift, and affordability continues to be an obstacle for buyers and sellers. Mortgage rates have doubled since March, and home prices remain elevated due to a limited supply of homes, although price gains are slowing at a quickening pace.”
The silver lining for buyers is that price increases “slowing at a quickening pace” mean that purchasers are likely to see some relief from average home prices that surged over the past few years. The obvious downside is that climbing interest rates are suppressing home affordability, especially for first-time or cash-strapped buyers.
Greater Greenville’s recent housing market shifts
About the 10th of each month, GGAR publishes updated market stats that highlight year-to-date, year-over-year, and monthly changes. Here are a few of the most significant changes from September 30, 2022 to October 31, 2022, and a brief summary of what they will likely mean for the future.
New listings decreased, and pending sales plummeted.
In the last month, new listings decreased by 11.5%. At the same time, the number of listed homes under contract plummeted 41.1%. A seasonal drop from September to October is normal; not as many sellers list their homes in the autumn and winter. However, the huge drop in pending sales, combined with fewer listings, indicates that November’s sales may be unusually low.
Houses stayed on the market longer before they sold, and reaped slightly less at the sale.
Average DOM and sales price generally work in opposite directions. The longer a home stays on the market, the less of its original asking price it’s likely to receive. So, it makes sense that, since the average DOM rose from 27 to 32 during the month of October, both the average (mean) and the median prices also decreased. The median price dropped $13,000 to $302,000. The average price dipped slightly to $360,687.
Another key metric to watch here is the percent of list price received, which is also greatly affected by DOM. During the summer months, average buyers in our market received just over 100% of their asking price. (Some homes in hot locations received substantially more.) In October, the average seller received 98.7% of the asking price, a .1% drop from September.
If interest rates continue to rise as expected at least early into next year, then these trends are likely to continue as well. Homes will sit a bit longer until an approved buyer comes along and offers the seller less than he’s asking for the home. Overall, sellers will receive a slightly lower percentage of their asking price.
The inventory of homes increased, both in volume and in number of months’ supply.
There’s still a housing shortage, nationally and in Greater Greenville. However, the shortage here isn’t quite as severe as it has been. In October, the months’ supply of inventory jumped from 2.5 to 3.1 by the end of the month. Translated into units, this means that 550 more homes were listed on GGAR when October ended than there were at the beginning of the month.
For some perspective, consider this: a 6-month supply of homes is the benchmark equilibrium point. A supply less than that favors sellers. A greater supply favors buyers. You can see that our market still favors sellers significantly, but change appears to be in the wind.
The Housing Affordability Index improved a bit.
Homes in our market actually got a little more affordable in October. The benchmark score of 100 means that the worker in this market who earns the average wage could afford a mortgage on the average-priced home. In September, the average worker earned only 75% of what he or she needed. In October, that metric increased to 78%.
I was pleasantly surprised by the increase. Inflation, interest rates, housing inventory, and average home price will all factor into what lies ahead for the Housing Affordability Index.
Stay tuned for more updates on the housing shift.
At Walker’s Riverside Properties, we closely monitor the local housing market. It’s one way, “We do your HOMEwork,” and it allows us to offer insights that benefit our clients. If you’re considering the sale or purchase of a home, consider us. We’ll put our experience and understanding of the local market to work for you. Contact Mick at (864) 420-7771 or Sandy at (864) 420-7772.