Real Estate: Hot'n'Bought
Apr 06, 2018 03:26PM
By Makayla Gay
By John Jeter
Real estate’s close to home for Danny Joyner. His father started the eponymous C. Dan Joyner agency in 1964, and last year, the firm marked $1 billion in volume—only the second time ever for the company. And the residential market’s still hot. One Sunday afternoon a few weeks ago, a $350,000 home in an older, established neighborhood hit the Multiple Listing Service at 11 that night, and then…
“On Monday, they had nine showings and six offers, and five of the six offers were above the asking price,” says the president of Berkshire Hathaway HomeServices - C. Dan Joyner, Realtors. “That’s not uncommon”; last year, nearly two-thirds of his agency’s listings sold within a month.
So much for the 2007-2010 subprime mortgage crisis and Great Recession into 2013, except:
“The biggest challenge for our industry right now is the historically low inventory,” he says. “In many cases, homes are going into multiple-offer situations. Once you do that, it obviously drives the price up, but then you have a lot of appraisal issues. Even though there’s a demand right now, that’s not really indicative of the future value of the home.”
Look at values vs. prices. Greenville’s median home value is $167,000, according to Zillow, which ranks the market “Very Hot.” That’s up nearly 10 percent from 2017, with the real estate database company predicting a 4.3-percent increase for 2019. At the same time, Zillow lists the current median price at $260,000.
Adding to that, Hamilton & Co. Keller Williams Greenville Upstate says in a Feb. 8 report, “Analysis of sold properties for the last six months reveals an average sold price of $246,537 and 47 days on market.”
In the previous 30 days, the average sold price for a home was $258,196, with an average of 51 days on the market, while homes priced from $1.2 million to $1.3 million averaged 26 days, the report says.
“The market in general, from all indications I’ve seen here and from hearing from economists, they all think that 2018 is going to be great,” says Seabrook Marchant, president of The Marchant Co. His agency saw a 10-percent increase in volume over 2016, “the best year we’ve had.”
For now, creeping mortgage rates and 2017’s tax reform law don’t seem to faze real estate professionals. Freddie Mac shows 30-year fixed-rate mortgages at 4.43 percent on March 1. Hardly vertiginous.
“I’ve been in the business since Jimmy Carter was president, so I’ve seen it up to 15, 17, 18 percent, so anything down from there, if it moves a half a point, one way or the other, 4 percent is still pretty damn good,” Marchant says.
As for tax reform, only interest on the first $750,000 of mortgage debt is deductible for mortgages taken out after Dec. 14, 2017. Likewise, after 2017, home equity loans are no longer deductible. That’s hardly an issue here, except perhaps for the very real $7,500,605 estate listed at Chanticleer with an indoor driving range, pool, elevator, and six fireplaces.
For the rest of us, as Marchant says, “I don’t see any major impacts, nothing that’s going to be a deal-killer. It’s like a lot of things in law, you just have to learn to live with it.”
Joyner notes: “I don’t really know what’s going to turn the pendulum in the near future. Our housing is affordable for the most part, it’s just the inventory part that’s making it a little bit challenging because those houses that maybe used to be $150,000 to $180,000 are now $225,000 to $250,000, and it puts a little strain on people.”
That could explain rising rental rates. Median rental price in Greenville is $1,250, up from a 2017 low of $1,050 last October, according to Trulia.
“This is my 28th year in the business,” Joyner says, “and I’ve never seen a better time to sell a house. It’s also one of the most challenging times to buy one, so a lot of people are cashing out at the top of the market right now to sell their homes, but they can’t find anything to replace it. They’re renting for a year or two to wait until there’s more inventory to come on the market.”
All this with the Census Bureau ranking Greenville the fourth fastest-growing U.S. city last year.
Nevertheless, Marchant sees a favorable landscape: “As one person said, ‘If you like 2017, you’ll love 2018.’ I’m encouraged by that.”
Homebuilders: Lots to Discuss
With the Greenville area’s shrunken housing inventory, perhaps it only makes sense that homes are shrinking some, too.
“The big box, big square footages, the McMansion has gone away,” says Marv McDaris, division president of Dan Ryan Builders Greenville Division, which closed 195 homes last year in its 12 Upstate communities, many of them townhomes. “We see people wanting a little, smaller house. We sell a lot of single-story ranches to families and to the move-down buyer, the retiree, and it’s definitely a trend in our market.”
Rick Quinn, president of Quinn Satterfield Inc., also sees the trend toward smaller homes. He mentions a 1,700-square-foot house that retailed for $230,000, with $11,000 in upgrades, including Cambria stone countertops and ceramic tile bathroom floors—“like a jewel box.”
A “kamikaze builder” that swoops into such hot locales as Travelers Rest and Simpsonville to purchase two- and three-acre sites for homes or townhomes, Quinn, also president of the state Home Builders Association, blames regulatory “anti-growth sentiment” here for tight inventory.
In a January letter to Greenville County Council about land-development regulations, Michael Dey, president of the Home Builders Association of Greenville, showed dismal homebuilding growth rates in Greenville for the first nine months of 2017. Compared with 2016, Spartanburg County was up 21 percent, Pickens County up 76 percent, and Greenville declined 5 percent.
Moreover, since 2000, he wrote, “The percentage of homes in the South priced at less than $200,000 went from 90 percent to 10 percent. Let that sink in.”
Nevertheless, Quinn says, “I’m still bullish on Greenville. I think it’s good across the board.”