Greenville’s real estate market is ‘finding balance;’ here’s how


The headlines are right—Greenville continues to grow quickly. 

According to the U.S. Census Bureau, Greenville County grew from 451,000 people in 2010 to nearly 548,000 by 2022—an increase of 21%. The influx of new residents isn’t slowing down, either, with the Greenville Chamber of Commerce estimating that the county’s population should grow to 750,000 or more by 2040.

This rapid growth has created a rapid effect on home prices in the area. 

The average home price in the Greenville MSA (which includes Anderson, Pickens, and Laurens counties) was $133,758 in 2010 but has increased to $291,302, according to Zillow. This rise, happening in lockstep with population growth, has led to questions about how high Greenville housing prices will go.

While it feels like the Greenville housing market is moving as fast as the Reedy River going over the falls after a major rainstorm, the numbers show that the housing market has started to find balance.

Sign of equilibrium

Greenville’s housing market score, according to Redfin, is currently 49, right in the middle of its 100-point competitiveness scale. This number is a high-level indicator that the market has reached equilibrium.

More specific evidence of this balance is that the list-to-sell ratio for homes is 98%, according to Redfin and Zillow. In other words, homes in Greenville are selling at the listing price on average. The number indicates that while major bidding wars are usually things of the past, homebuyers shouldn’t expect sellers to cut prices, either.

Another sign of balance is the current average of 22 days from homes being listed to being put under contract, according to Zillow. This number is in line with a traditionally balanced market and is a significant shift from what was happening just a few years ago when inventory was especially tight and interest rates were low. Then, Greenville (like many markets) saw homes moving in less than a week.

Why isn’t there a feeding frenzy for new homes as there was two years ago? Two main reasons: First, higher interest rates have slowed the housing market around the country, including Greenville. Most buyers can afford less house due to rates, and many homeowners whose mortgages are locked in at rates far below current averages are choosing to stay put for now.

Second, the pace of new construction in Greenville continues to add supply to the market, helping to meet the demands of population growth. Right now, 38% of homes that hit the Greenville market are new construction, according to Redfin, a higher rate than the 26% national average.

And the construction boom isn’t slowing down. Greenville builders are requesting 4% more single-family home permits than last year, a rate 10 percentage points above the national average, according to the National Association of Home Builders.

What to expect

Now that the Greenville market is settling into balance, what should current and future residents expect from this “new normal?” The numbers show that Greenville is going to continue to grow. This means that home prices, which have finally stabilized, aren’t likely to decrease, even with the increasing supply of new builds.

The story, however, is different for Greenville’s apartment market because so many new units are coming online. According to CoStar, a national real estate data firm, the national average for newly constructed multifamily unit absorption has been 1.7% in the past 12 months. Meanwhile, Greenville has added 3.7% of multifamily inventory to the market in that period, and an additional 3,174 units are still under construction. 

It will take time for the market to absorb these units. That is why apartments in Greenville currently have a 10.7% vacancy rate, which is above the national average of 7.6%. As a result, multifamily rents have flattened in the Greenville area year over year, which gives renters more certainty about their housing budget for next year.

Once the market fully absorbs all the new multifamily construction, rents should start to increase again, but it may be 24 months or more before that happens.

As Greenville changes, the housing market changes, too. But the good news for residents and newcomers alike is that the market currently sits in a stable spot that allows people to make educated decisions about when to buy, sell, rent, or invest. 

Dameion Kennedy leads the market research analysis team for Greenville-based Lima One Capital. For more information, visit limaone.com.



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2024-02-11 19:35:16

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