There is no doubt in my mind, that everyone reading this has heard some negative news about the real estate market over the past 18 months or so. While it is true that the market (on a national level) has seen better days, it is also true that some markets are still doing better than others.
First of all, there is no national real estate market. That's just as obvious as the fact that there is no national weather forecast. You've probably heard a similar analogy before, but it's true. There is also no denying that the issues facing real estate in some areas, have had an impact on the market in the Upstate.
The residential real estate market has changed on many levels in the past year or so, and the antithesis of these changes resulted in the boom we saw in many markets 3 to 5, and even 7 years ago. For the most part, those markets which didn't see this "boom", are the ones doing better right now compared to those that did.
Greenville, SC and the surrounding Upstate areas did not see the boom that many markets experienced, and therefore did not see as drastic of a decline. The changes I was referring to above include home prices, financing, average days on market/absorption rate, and the number of homes sold.
Existing Home Prices
According to the National Association of Realtors, the United States saw its recent peak in median sale price on or around 3rd quarter 2006, when the median sale price of an existing single-family home reached a seasonally adjusted price of $221,900. The national median price fell to $196,100 (1Q08), but has since risen to $200,500 as of 3rd quarter 2008.
The trends in home prices are very different for the Greater Greenville, SC area. In fact, the median sale price of an existing home has stayed stable, and has even appreciated in most quarters. In November 2008, the median sale price in Greater Greenville, SC was $139,000. This is compared to $140,000 in November 2007, $132,500 in November 2006, $135,250 in 2005, and $126,000 in November 2004.
Our affordability has also helped avoid a major decline, and on November 12th, 2008, Forbes ranked Greenville County #5 in their "Affordable Place to Weather the Downturn" article. This was based on an affordability index (150.23), median property tax ($984), job growth (+.9%), and per capita income ($23,926).
Financing
Obviously the landscape of the mortgage industry has also changed. The sub-prime lending market is gone, so those who had been able to find financing in the past, may have more difficulty now.
BUT, there are plenty of financing options out there for people with good, and even average credit.
There is this huge misconception right now, that although interest rates are at great levels, you have to have perfect credit and a huge down payment in order to qualify.
Currently, the national average for a conforming 30 year fixed rate mortgage is 5.875% according to HSH Associated Financial Publishers (
Compare Mortgage Rates, Refinance Rates, Mortgage Calculators - HSH). Local rates for conforming 30 year fixed mortgages average around 5.5%, based on rates from several local mortgage professionals.
The Greater Greenville area is still considered a low-risk market by most, if not all lending institutions. On October 1st, 2008, the housing price risk index from The PMI Group, Inc showed that Greenville, South Carolina has a "less than 1% risk of decline in average home price over the next two years."
The fact is that you can still find lending option to fit virtually every financial scenario, with the exception of those buyers who relied on the sub-prime market. You can find programs with requirements for 3% down, 5% down, and the USDA Rural Development program continues to have 100% options available for properties in eligible areas. These eligible areas still include some areas surrounding Five Forks (Woodruff Rd/Bennetts Bridge Rd), even areas surrounding Locust Hill Rd/Wade Hampton Blvd in Taylors, and more.
Average Days on Market/Absorption Rate
First of all, the average days on market and absorption rate are two different things, but are commonly confused as the same.
The absorption rate is a measure of the length of time it would take to sell all existing inventory, based on the number of sales in a specific timeframe. While the absorption rate across the US has risen to approximately 11.5 months, the absorption rate in the Upstate still averages approximately 7.99 months for existing single-family homes. Both figures indicate a buyer's market, but the Upstate remains far healthier than the national average.
Average days on market is measured from the first day of a listing agreement, to the day a property goes under contract. In the Greater Greenville area, it was approximately 87 days in November 2008. This is compared to 85 days in November 2007, 75 days in November 2006, 92 days in November 2005, and 99 days in November 2004.
Number of Homes Sold
The number of homes which have sold is an area where virtually every market has been affected. This is due to many factors including the lack of sub-prime lending programs, the inability for people to sell their homes in declining markets and move (within the same market or to another market), the sharp increase of home sale activity in past years, and buyer perception as a result of negative media attention.
According to the National Association of Realtors, in 2005, approximately 7,076,000 homes sold in the United States. This number fell to its lowest point during 2nd quarter 2008 when the seasonally adjusted annual rate fell to 4,910,000. In 3rd quarter 2008, this number rose to a seasonally adjusted annual rate of 5,037,000 homes.
In the Greater Greenville area, there have been 5,028 existing single-family homes sold year to date (1/1/2008-11/30/2008). This compares to 6,235 during the same time period in 2007, 6,576 in 2006, 5,925 in 2005, and 4,958 in 2004.
The Future
It is my opinion that the markets which saw little or no decline during this slowdown, will rebound quicker than those which were heavily impacted by falling prices and increases in absorption rate. I believe this to be true because as those markets begin to pick up in sales, more buyers will revisit their original intent to relocate. When those markets rebound, the media will shift their focus to something else, which will bring more local buyers off the fence in their respective markets.
When this rebound will occur is anyone's guess, but many of the nation's leading financial analysts are predicting that residential real estate will begin to pickup in the 2nd quarter of 2009.
I have already started to see an increase in inquiries, reminiscent of what I remember in 2006. During that time, many of the buyers in the Upstate were coming from Florida, New England, and other parts of the country. I constantly look at statistics for my website, and keep a close eye on Realtor.com traffic reports. As for Realtor.com, the Greenville-Spartanburg-Anderson MSA saw a 15.1% increase in traffic in September 2008, compared to September 2007.
Typically the busiest time for my website is during the summer months, but during 2007 and until recently, I noticed a decrease in traffic from Florida, New England, etc. As you will see in the chart below, that traffic has increased to levels comparable to what I remember in late-2006, which I believe is a good sign.
My website traffic during the first two weeks of December (232 unique visitors) has increased to levels which surpass the first two weeks in August (146 unique visitors). This actually defies everything I know about traditional times when people inquire about real estate. Not only have local searches increased, but traffic from Florida has increased by 37.50%, and the number of pages those buyers are visiting has increased by 72%. Traffic from several New England states has doubled. Even inquiries from Michigan increased by 350%, and visitors from North Carolina increased by an amazing 450%!
A final look into my website visitors from November 14th - December 14th, which I think accurately displays the continued interest in the Greenville, SC market:
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This ended up being a much more lengthy report than I originally anticipated, but as long as one person finds this information useful, it was worth it.
Please let me know if you have any questions whatsoever, and have a great day.
- Cameron Keegan
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And these houses aren't out in the sticks or anything, they're just in the suburbs. We've got a nice collection on our short list and I'm really hoping to find one we want to put an offer on when we come up in two weeks, but if we don't we're already planning to come back next month. 
