Notes from the Annual Housing Market Forecast

Greenville’s builders, agents, and data-minded homeowners got a clear-eyed read on where things stand and where they’re likely headed. Fresh from an annual event geared to homebuilders—but wide open to the wider real estate crowd—the takeaways centered on supply and demand, how buyers actually behave at different mortgage-rate thresholds, and why zoning continues to shape what gets built (and what doesn’t). The insights weren’t theory; they were grounded in what the market is doing now—and what it’s likely to do next in the Upstate.

Annual Housing Market Forecast: What the Data Is Really Saying

The Annual Housing Market Forecast zeroed in on fundamentals: inventory remains tight, buyer behavior shifts at specific rate levels, and policy (from elections to zoning) quietly pushes the market’s tempo.

Inventory: still tight, even if it “feels” looser

The headline number was blunt: less than three months of inventory across South Carolina, including Greenville. Six months is typically considered a “flat” equilibrium, but after two years of ultra-lean supply, even three months can feel abundant to today’s buyers. In practice, it isn’t. The everyday pain point is choice—many would-be buyers simply aren’t seeing enough homes that fit their criteria. Expect low inventory to linger; barring a major global economic shock, there’s no obvious path to a quick six-month supply.

Why do some charts say “9 months” when the market says “tight”

One useful clarification explained the mismatch between government-issued inventory charts and what people experience. Government counts often include permitted-but-not-started homes. Those aren’t keys-in-hand houses; they’re future possibilities. Counting them as an active supply is like saying the grocery store has plenty of eggs because there are chickens out back. Helpful for planning, not helpful if you want to buy breakfast today.

The fall slowdown: three forces at once

The softer fall wasn’t a mystery. Three overlapping factors dragged on activity:

• Normal seasonal easing into fall and winter.

• Election-year caution—investors and consumers often pause in October/November, then resume after ballots are counted.

• Higher mortgage rates are putting the brakes on affordability and urgency.

As winter turns to late February and early March, the usual ramp into the busy season should reappear. On top of that, recent comments from Federal Reserve figures hinted at slowing—or potentially ending—rate hikes. That doesn’t hard-pivot mortgage rates overnight, but it does reduce headwinds if the stance sticks.

The line in the sand: 5.25% mortgage rates

One stat landed with a thud: buyer behavior shifts most dramatically once mortgage rates move above 5.25%. Below that, demand doesn’t change as sharply; above it, more buyers fall out or wait. Tracking that threshold matters. If rates drift under 5.25%, expect noticeably more shoppers to re-engage.

Headlines vs. reality: “prices down 30%” isn’t what it sounds like

Expect (and ignore) dramatic headlines claiming 25–40% “declines.” Many of those pieces describe a slowdown in the rate of appreciation, not actual price drops of that magnitude. A year that climbs 5% after a 20% year will be spun as a huge “deceleration,” which is technically true and practically misleading. Month-to-month wiggles can happen; the long arc is what matters.

What “normal” appreciation looks like—and why recent spikes weren’t a bubble call

Over the long haul, a commonly cited “normal” appreciation figure is 4.6% per year. Take that baseline back to 2002—the last “normal” year before the mid-2000s bubble—and project forward through 2022, and you land roughly where prices ended up. The point: recent jumps were more of a catch-up after years of distortions, not proof of a bursting balloon.

Who’s actually driving demand right now

Millennials have fully arrived as buyers, and Baby Boomers are sitting on unprecedented cash reserves—two forces pushing steady demand. Add in a late-arriving Gen X cohort that, after years of post–Great Recession skittishness, finally jumped in during the pandemic, and the demand picture starts to make sense. None of this guarantees a frictionless market, but it does explain why “waiting for a crash” hasn’t paid off.

Why “missing middle” housing matters (and why zoning often blocks it)

A major structural limiter remains zoning. The so-called missing middle—duplexes, triplexes, quads, townhomes—used to be common. Now, rules often funnel developers toward two extremes: detached single-family or big apartment complexes. The middle forms, which could add attainable ownership choices and relieve pressure, struggle to get approved.

The history here isn’t pretty. Early zoning in some cities wore its intentions on its sleeve, then later kept similar outcomes by other means (for instance, using single-family zoning to steer higher-cost development into certain areas). The legacy lingers. When neighborhoods fight every incremental increase in gentle density, they may preserve today’s quiet—but they also make it harder for the next generation to buy before they’re 45.

NIMBY decisions today, affordability tomorrow

No one loves construction outside their window. But the downstream effect of blanket opposition is tangible: fewer attainable homes and a tighter market for years. The big-picture question is simple: do we want local young buyers to have realistic purchase options without heavy parental subsidies? If so, the community has to allow more of the housing types that meet them where they are—especially that missing middle.

Where things likely go next

• Inventory: stays constrained. Even modest upticks will feel helpful but won’t transform choice overnight.

• Rates: if they drift below 5.25%, buyer traffic should climb; above that, expect friction.

• Seasonality: the usual late-winter ramp should reappear.

• Narrative: expect spicy headlines about “declines.” Read the fine print; many refer to slower growth, not crashing values.

• Policy & process: zoning will continue to shape outcomes. The more room localities give to mid-density ownership, the more relief buyers will feel.

All of these points to a market that isn’t “easy” but is navigable. For sellers, realistic pricing and clean presentation still win. For buyers, patience and readiness matter—because the right home may only appear in small bursts when supply is this thin.

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Bottom Line

The Annual Housing Market Forecast cuts through noise. Inventory is still scarce, rates near 5.25% act like a light switch for demand, and zoning—not just economics—controls what choices buyers get. Expect a busier late winter, cautious optimism if rates ease, and a steady drumbeat of debate about how (and where) to add homes. The market isn’t stalling; it’s recalibrating.

Ien Araneta

Journal & Podcast Editor | Selling Greenville