Greenville's Foreclosure Rate Stays Low
I came across a recent USA Today online article that caught my attention. It focused on foreclosures and the areas that have been hit the hardest. According to the article by Brad Heath, half of the nations foreclosures are in only 35 counties or around 1% of the nations counties. These hardest hit areas included places like Detroit, Cleveland, Las Vegas, Phoenix, Washington D.C., and worst of all Southern California and Southern Florida.
So how does the Greenville Real Estate Market look when it comes to foreclosures? In the last year, our foreclosure rate has gone up from .08% to .09%, basically no change. The nation as a whole has gone up from .5% to 1.2% with those 35 counties being the main cause of the increase. 650 counties have actually seen a decrease in the amount of foreclosures. Part of the reason that Greenville's foreclosure rate is so low is the low amount of sub prime loans in the area, 6% less than the rest of the nation. Also, our cost of living has stayed steady but affordable and we did not see extremely high prices like San Diego or Miami did. The House Price Index (HPI), that measures the price of residential housing, shows that 9 out of the 10 markets with the highest price depreciation are in California. Those 10 markets lost between 28.05% and 29.92% in home value in just one year (Source: First American Core Logic). Miami is the only other area in the top 10 not in California.
What can we learn from this information? First, don't listen to the news. The Greenville market is not flooded with foreclosures. Second, since we are not flooded with foreclosures, there are not amazing deals to be found on every street. We do have a number of foreclosed homes that are available but most of them need quite a bit of work and you cannot expect to find the deal of a lifetime. You can make money foreclosures but it takes a lot of patience for the right one as well as money for repairs. If you are in the market for a Miami condo or California suburban home, then now is your chance for an amazing deal. Why do that though when you could buy in Thornblade for the same price?
Greenville Homes Priced Under $150,000 Not Classified As Buyer's Market
We hear Greenville, SC real estate markets referred to as "buyer markets" or "seller markets" but what makes a market good for buyers or good for sellers. The National Association of Realtors® classifies markets based on absorption rates and inventory as follows:
0-5 months = Sellers Market, 5-7 months = Even/Split Market, 7+ months = Buyer’s Market
So what is an absorption rate and what does the 0-5, 5-7, and 7+ months mean? The number of months represents the number of months of inventory on the market. The number of months of inventory is determined by the absorption rate. The absorption rate is determined by taking the number of sold listings for any criteria (price range, city, subdivision, or a mixture) and dividing it by the amount of months (12 for a year or 9 for January to September). You can find the amount of inventory then by dividing the absorption rate number by the amount of active listings.
For instance, lets say that it is August in a local Greenville subdivision and it has 4 homes on the market and 16 have sold since January. This makes an average of 2 homes selling every month and means that there is a 2 month supply in the subdivision. When looking at absorption rates for the entire Greenville area as a whole, it reveals some interesting facts when keeping the definition of a buyer's and seller's market in mind.
Here are some recent Greenville Area real estate statistics:
•Listing Price: $0 - $150K
–Active Listings: 2639
–Sold Listings: 3083
–3083 / 8 mths = 385/mth (Absorption Rate)
–2639 / 385 = 6.85 (Months of Inventory)
–Avg DOM: 83
•$150K - $300K
–Active Listings: 2732
–Sold Listings: 2399
–2399 / 8 = 300/mth (Absorption Rate)
–2732 / 300 = 9.11 (Months of Inventory)
–Sold DOM: 95
•$300K - $500K
–Active Listings: 1123
–Sold Listings: 565
–565 / 8 = 71/mth (Absorption Rate)
–1123 / 71 = 15.82 (Months of Inventory)
Sold DOM: 110
•$500K - $1Million
–Active Listings: 638
–Sold Listings: 174
–174 / 8 = 21.5/mth (Absorption Rate)
–638 / 21.5 = 29.67 (Months of Inventory)
–Sold DOM: 125
•$1Million +
–Active Listings: 144
–Active Solds: 14
–14 / 8 = 1.75/mth (Absorption Rate)
–144 / 1.75 = 82.3 (Months of Inventory)
Sold DOM: 109
These statistics show that Greenville is in a buyer's market in every category except one. The homes priced at $150,000 and below are not in a buyer's market. According the the NAR's® definitions of markets, that price range is an "even/split market." What does this mean? Seller's under $150,000's can expect a better market than those with higher prices and buyers cannot expect the luxury of a buyer's market under $150,000. Seller's under the $150,000's still have to keep things in perspective though since they are not in a seller's market either.
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