Comparing Price Ranges
I recently did a search on Greenville, Greer, Simpsonville, Taylors, and Travelers Rest and found that 119 homes sold between $200,000 and $300,000 in May and June of 2009. 4 of the 119 were an auction or unusual situation leaving 115 that were normal transactions. Out of the 115 normal transactions, all but 3 came down quite a bit on their price. The 3 homes that did not come down in price were all new construction and most likely had features added that made the price go up. Out of the 115 homes, the average difference from list to sales price was -$19,582. Something to keep in mind, the $19,582 average price that the 115 homes came down was taken off of the current listing when it sold. It does not include the original price that they might have started at if there was a previous expired listing. That means the total average price drop is probably much higher than $19,582.
At the same time, we seem to be seeing a surge in first time home buyer sales. The first time home buyers are starting to realize that they have to close on their home by November 30th to get the $8,000 tax cut. This has created quite a bit of movement especially in homes under $130,000 that are priced and staged right. I recently listed a home in the $120,000's that showed 15 times and had an offer by the end of the first week. The home looked great on line and the web traffic was extremely high. Homes in the $200,000's plus that are getting the same exposure are doing well to get 15 showings after months of being on the market.
We can take a few things from all of this. First, the market is not that bad if you are selling in the first time home buyer range. If you are buying in that same range, don't expect to find any great deals. There are a few great deals out there but expect them to go fast and have multiple offers. Second, if you are selling in the $200,000's plus you have to be aggressive and really stand out from the competition with pricing and staging. The good news is that the activity that we are seeing with the lower priced homes has potential to create a ripple affect. The people who are selling the lower priced homes could move up in price range after they sell and and this could increase activity in those upper price ranges.
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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