Zillow.com and 10-Year Anniversary of Housing Bust! (St. George Real Estate Morning Drive Radio Show)
Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable!
Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing firstname.lastname@example.org.
Jeremy: … good day to everybody. It is kind of nice out there. What do you think about the little bit of rain, Mike?
Mike: I am loving it. It is all right by me.
Jeremy: You are not offended?
Mike: No, not at all.
Jeremy: Do you remember 2013? Do you remember about this week in 2013?
Mike: It got a little white around here, didn’t it?
Jeremy: It did, didn’t it?
Mike: Yes, it did.
Jeremy: Can you believe that?
Mike: I am okay with that, too.
Jeremy: I actually think it was this, well, I know it was this week because it was during the Dickens Festival.
Jeremy: I know for a fact. Oh, I could mic up, Mike. I could have a mic on and even sound better this morning for the lovely people of southern Utah. So it was, we ought to look that up. It was plus or minus this day, these days, this week in 2013 we had the Great White December. I do not know what you want to call it.
Jesse: Is that when all the water pipes were freezing?
Jeremy: Yes, so we had the snowstorm.
Jeremy: And there was, we have talked about it on the show here before in the past, but you could not even get up and down this hill. Right, Mike?
Mike: No, it was snowing and then it was very cold. Everything froze and it stayed around for quite a while.
Mike: We had fun. I was sitting here watching people slide all over the place.
Jeremy: Yeah, because they could not go up, up and down Bluff Street.
Mike: Yeah, you only had two or three lanes on Bluff to choose from then.
Jeremy: Yeah, yeah.
Jesse: Not six?
Jeremy: You were not up to six lanes plus a turning lane plus, plus.
Mike: Plus, plus.
Jeremy: Yeah, this is pretty incredible. I came out of the Dickens Festival that year. You know what we did? We had gone there to see, they were putting on the Christmas Carol, and it was afternoon time. I remember going in and it looked like it could be, it may have even been snowing a little bit when we went in. Then we came out of the Dickens Festival about 90 minutes later, and it was absolutely astonishing what was going on. It was like being at a ski resort. It was more than that. I have never seen a snow like that in St. George. And then it did that until about eight or nine o’clock and that night and then the rest is history. You know what is fascinating though, Mike? They did not shut school down because they do not. I thought they would.
Jesse: It is Utah, come on.
Jeremy: Well –
Jesse: We might be St. George, but we are still Utah.
Jeremy: Well, remember that St. George does not even have a snow plow. Per se. Right.
Jesse: Yeah, that is true.
Jeremy: I think there was some construction grading pieces of equipment out there. Well, it is what it is, and of course, that was five years ago. Five years ago, which is kind of fun. Jesse, Good morning. I have got Jesse Poll in the radio studio with me today.
Jesse: Good morning, everybody.
Jeremy: Five years have transpired, have moved through since we had that period, and what a difference it made in real estate. Do you remember what we talked about last week? The average home value from five years ago is up –
Jeremy: So as of, I am going to move this chair for our live viewers on Facebook. I hope you are watching. We broadcast the show on Facebook dot com slash Jeremy Larkin. I think that is where we have it running. Of course, you can listen to us on 94.9FM, 890AM. But in April it was 110. So we know it is higher now.
Jesse: It is probably higher now because it has been creeping up there.
Jeremy: 120, 125 I think we talked about.
Jesse: I just looked yesterday. I think the average sales prices for Washington County is 352.
Jeremy: 352. Is that nuts? It is nuts because we are going to talk about a couple of things today. We are going to talk about what is happening in the market, and what people really need to understand is happening in the market. If they feel like something has changed, something has changed, but there is no data to support it.
Jesse: Right. We were just talking about that.
Jeremy: Yeah, so we are going to talk about that today. We are also going to talk about Zillow dot com. And when I posted this thing up to Facebook, I just asked the question do you use Zillow dot com. Yes, and we are going to talk about that. We are going to talk about the statistics, the consumer reaching out to Zillow dot com, which is, we will explain it better later. But it is just a real estate website. It is not owned by any agent. Right? It is a national website. And the data that has come out on what the consumer thinks is happening, what they think is happening when they contact Zillow. Who they think they are contacting, which is quite intriguing to me. Who they believe they are contacting, who they are actually contacting, and the lengths that Zillow is going to, and this is really important for the consumer because it is a consumer-facing brand, just understand if you are a buyer, a home seller or a home buyer, Zillow, it is like Google now. People throw the word around like Google. Right?
Jesse: That is true.
Jeremy: Don’t they? And then I am also going to talk about –
Jesse: Except for they, most of them know how to say Google. A lot of people do not know how to say Zillow –
Jeremy: Yeah, they do not know how to say Zillow.
Jesse: Zilloow or Zeelow.
Jeremy: It is pretty cool stuff, and I think people need to understand what is going on out there. It is an interesting time. So it is December sixth for anyone how is listening and picks us up after the fact and they are watching on our Facebook feed later or they pick it up. Folks, we are not linking up most of our radio shows, well, when I say most, going back chronologically, they are not all there. Going back a couple of months. You can visit Sold in St. George dot com, Sold in St. George dot com and click on the shows. We actually have a podcast, and sadly we have not been loading the shows to the podcast because we started the podcast for something different. And then there was an evolution in our thought process, and we said maybe we will do it differently. And now we are also going to be loading up our radio shows to that podcast, but we are just not there today. So visit Sold in St. George dot com.
Jesse: Now that we have made it public, we will be there soon.
Jeremy: Well, yeah, correct. These last couple of days, I have been working on trying to nail this thing down with my marketing people. All right, Jesse, let’s talk about this.
Jeremy: Let’s talk about this market. So we had someone pull their home off the market. I think this is actually kind of fun. Over at the Larkin Group, we have a cancellation guarantee, and then what that is what we call an Easy Exit Listing Agreement. Tell people what that means. Now, we are not here to so much market that, but this is a great segue into, and we will absolutely never mention the name of a client on the phone or on the radio, but I want to talk about the listing that came off yesterday.
Jesse: Okay. Yep.
Jeremy: Go ahead. So our Easy Exit Listing is what?
Jesse: What our Easy Exit Listing Agreement is to protect the seller. So if for some reason, either the market is just not correct or things, or we are not making them happy –
Jeremy: If they are not happy.
Jesse: — if they are not happy, if we are not happy. There are a lot of different reasons, but what it says is if for some reason you need to get out of your listing, we will let you out.
Jesse: And in most cases, there is a small fee to help us pay back for the photography, but that miniscule. So that is what it is. So you are not binded into a contract that is doing you any good.
Jeremy: Yeah. Yeah, so we got into this Easy Exit Listing Agreement maybe five years ago. And the Easy Exit Guarantee is pretty straightforward. You are not happy, you fire us.
Jeremy: Of course, there were Glenn Beck ads running. We had Mike doing stuff and other stations talking about this Easy Exit, if you are not happy, fire us. Well, we had an interesting situation with a client deciding, it is interesting. I guess they really did not fire us.
Jesse: No. In fact, he decided he will probably call you back in the spring.
Jeremy: Yeah, but I think it is a really important example of what is happening in the market. So we put this home on. $400,000 range. Right? And 399,900, and the consumer, excuse me, the seller wanted to list it for 425, and everything I had said 375. So what did we do? We met in the middle.
Jeremy: Right. I said, well guys, we can try it at 399. We tried it at 399. We had a handful of showings. We modified the price at 395. We had more showings. We brought a huge group of real estate agents through. Huge group of real estate agents through, and this is where it gets really fascinating. So we brought through, and I am going to pull this up. I can actually share this with what happened or what the, with our listeners. I think that you are going to like this. So we brought a big group of agents. What is called the Board of Real Estate, Board of Realtors tour, caravan tour. With 15 agents giving us written feedback, okay, and here is what we asked them. Ready, Jess? Scale of 1 to 10, how was the condition, and they ranked it an 8.87 on average. Some of them said 10.
Jesse: And I believe that. It is a nice house.
Jeremy: The home was built around 2005? Five-ish. I should know this, but it is just not top of mind right now. Number two, in your price and your opinion, what price would cause the home to sell? Now this is interesting. The home was listed for $395,000, and here is what they said. 369,900; 374, 379, 379, 299, ouch, 375, 375, 375, 380, 349, 375, no opinion, 380, 369, 379. Every single agent said 380 or below. One agent said 299 to be safe, which is getting out there.
Jesse: Yeah, that is –
Jeremy: I would have bought it for 299.
Jesse: Anybody will buy it for 299.
Jeremy: And if you average that out, essentially it is 370. 370.
Jesse: But that 299 brings up an interesting theory. When you have the biggest home in the neighborhood, you still have got to consider what neighborhood you are in.
Jesse: So that neighborhood they are in is actually a 299 neighborhood.
Jesse: Tops 320. So you have got the biggest home there. How are buyers perceiving you? They still have the neighborhood to consider. It does not mean they are right.
Jeremy: It is absolutely right.
Jesse: But that is how they are looking at you when you are walking in the door.
Jeremy: So the biggest home in the neighborhood, nicest home in the neighborhood, usually comes back to bite you in rear end, doesn’t it?
Jesse: It really does.
Jesse: It really does because at the end of the day you still have got a certain demographic of buyer that is going to buy a home there.
Jeremy: So here is what was going on. We had a neighborhood full of 2100 square foot and smaller homes. And this one happens to be 2800 square feet. So what would happen is the client, great people, would say but we have the biggest home in the neighborhood. Shouldn’t we get more? You should get more, but the market would not support that much more.
Jesse: Right. Right.
Jeremy: So we have 15 agents go through the home. Every single one of them says the price needs to be 375. So we sat down last Friday and we visited, and I said here is what we need to do. We need to be at 375 or we need to cancel the listing. And I handed them two forms to sign, a cancellation form or a price change form. And the reason I talk about this so boldly on the radio is because this is like the conversation that real estate agents do not want to talk about. Well, we would never ask you to reduce your price.
Jesse: Well that is –
Jeremy: I would never ask you to reduce your price. I would tell you that you have to reduce your price based on the market rejecting your price. And that is what we did. And yesterday stopped by the office, dropped off the cancellation form. Hey, we will probably call you in the spring. We are going to see if it will go better. Remember that the value of our home is not what we want. Right, Jesse?
Jeremy: But, Jesse, I want, it is not what you need, Jesse. I understand that you want to do a home equity line, redo your roof, but who does not care whether you want to do that or not?
Jesse: Right. The buyer.
Jeremy: The buyer does not have any emotion about what you and your family what to do with the equity in your home.
Jeremy: It is not what we paid. But Jesse, I paid 250,000, shouldn’t I get blank?
Jesse: My question is what does that have to do with it? Because if you would have paid $100,000, do you want to sell it for $100,000 if it is worth 300?
Jeremy: Yeah. And if we bought Microsoft stock at 50 and it is selling for 30 today, that is just what we would get today.
Jesse: So what we paid is irrelevant. It is do we need to sell or not and can we or will we sell in the current market.
Jeremy: And most importantly, it is never, a home is never valued at what another agent or your agent says it is valued at. It is always valued at what price?
Jesse: The price that the buyers are willing to pay.
Jesse: And the seller is willing to sell.
Jeremy: Bingo. So it is a cautionary tale and the challenge is that at 375, the home would have been sold a long time ago and there was equity. And it could have been done, but there was this feeling and there is always this feeling, but I need to buy a new home and I need all of the money from this home to buy the new home. Right? Which again comes back to making the, somehow us trying to believe that our product, I am selling a bike right now. It is on KSL dot com and a website for mountain bikes called Pink Bike. It is a mountain bike wholesale. Of course, I put it on at $100 higher than I thought I should, and then I modified it 24 hours later. That fast. And do you know what I went through? I said but I changed out the aluminum wheels for carbon wheels. I changed out the regular handlebar for a carbon handlebar. But wait, I upgraded the seat. Wait. I changed out the seat post. I started running a tally on all of the money that I had spent on this bike. And guess what all the guys and gals across the planet who visit KSL dot com classifieds and Pink Bike do not care about?
Jesse: Yep. That is great.
Jesse: Because we all go through that. Everyone of us when we are either thinking about selling something and when we are buying something. It is just flipped in reverse.
Jeremy: By the way, that is exactly right. By the way, I tallied up $1600 in upgrades on a bike. The bike is worth about $1800. I am like I am giving the bike away. How many clients have we heard in real estate say I do not want to give my home away?
Jeremy: Am I giving the bike away, guys, if I sell it for the value that the market will bear? Well, of course not. Right? So as you move through this market, understand something we are seeing. We are seeing the prices of listings be reduced and we are seeing them being reduced all over the place.
Jesse: Yeah, there is a lot coming through.
Jeremy: There is a lot coming through. We do not believe that home values are falling. We believe that there has been 5-10% over market value that people are asking. Right?
Jesse: Well, because in the market that we have been in it is normal or not surprising to see somebody that goes hey, let’s try to get this. Once in a while, they do.
Jeremy: Yeah, once in a while they do.
Jesse: They might get really lucky, but as the market starts to shift, we either, we have a few choices. We either have to go okay, we better get in front of this before we get behind it because you will never catch it.
Jeremy: You will never catch it.
Jesse: Or you go okay, let’s just take a break. Let’s stop.
Jeremy: Let’s stop.
Jesse: Because you have got to rethink. You have to correct yourself. The marketing, the pricing, the whole thing. Or you just chase and chase and chase.
Jeremy: Yeah. Well, you do. We talked about if a ball is running down a hill, and if you remember this as a child, and you are trying to get in front of the ball. Trying to get in front of the ball, excuse me, try to catch the ball, but you cannot catch the ball –
Jesse: Because you kick it.
Jeremy: (Indiscernible) front of the ball.
Jesse: Because you kick it.
Jeremy: You try to reach them, you lunge, and you pull a muscle and then you are kicking the ball further down the hill. All right. Zillow dot com. It is like Google. Literally in real estate, well is it on Zillow? Is the home on Zillow? I am For Sale By Owner. It is on Zillow. Well, have you looked at Zillow? Well, what does Zillow say. Last night, last night, someone asked me how accurate is the Zillow’s estimate? Last night. Yesterday afternoon, I am with a friend. He is a close friend. He is a CPA in town. He is a great guy. How close is Zillow? And then you know what he said? Well, it does not show 1200 feet in my home. Well right. Or 2000, maybe it was 2000. Because Zillow does not pick up the basement. But today we are not here to talk about whether Zillow is accurate or not. And real estate agents love to hate this site because the consumer looks, it is the Google of real estate, and real estate agents hate it because they have this brand.
Jesse: They do have the brand.
Jeremy: But here is the deal, guys. Us getting on the radio and convincing you that Zillow does not have accurate data, you will probably not even listen to what I am saying. You are going to go to Zillow.
Jesse: Well, it would be wrong because sometimes they do and sometimes they do not. Just like us.
Jeremy: Yeah, here is where we are going. Statistically speaking, you saw this. What percentage of people when they contact Zillow think they are contacting the real estate agent on, excuse me, when they contact Zillow think they are contacting Zillow?
Jeremy: Well, not according to the data.
Jesse: They think they are contacting Zillow?
Jeremy: Yeah, when they contact Zillow, when they go and click on a form, did you see this in this article yet?
Jesse: It is like 19 pages. I did not get through it all.
Jeremy: There you go. I did not know if you saw this. 50% of the consumers. Zillow just came out with their report. 50% of the consumers when they contact Zillow believe they are contacting Zillow.
Jeremy: They believe they are contacting, actually contacting someone at Zillow.
Jesse: So when they go in and ask about a property they think they –
Jeremy: Well, they absolutely believe that they are asking, just asking a question of the website.
Jesse: Oh, okay.
Jeremy: So who are they actually, in fact, contacting?
Jesse: Buyer’s agents really. Any agent.
Jeremy: And how are agents showing up in that? Are they showing up in that because they are the best agent or what?
Jesse: They pay to be there.
Jeremy: They, we, that means we.
Jesse: We do. Yes.
Jeremy: We. We are part of it. We pay. Now listen. Paying to have your listing featured and become a premier agent on Zillow is great for your client.
Jeremy: So for home sellers, you definitely want to hire an agent who is spending money on Zillow, to be quite frank. Until they kick these guys out of the market, you almost have to hire someone. So Zillow, there is a huge report that came out. It is not a Zillow article, but it is a report that Jesse and I are checking out. 50% of the consumers believe that when they contact Zillow, they are actually contacting Zillow. The –
Jesse: That number surprises me. I would have said they think they are contacting the listing agent.
Jeremy: It is real. It is real. And because they think they are contacting Zillow, Zillow has a situation, and the situation is that they now have to protect their brand. Because if you have a giant brand, Jesse, and 50% of the consumers are contacting it thinking they are contacting you, can you allow agents across the planet to not follow up, to not call the client back?
Jeremy: No way. You now have to control the process. So what is happening is Zillow is charging agents, we are one of them, an arm, a leg, and a kidney to feature our listings on Zillow. And then what they are doing is they are selling the information back to us so we can talk to you as the buyer or the seller on the other end. Right? They are vetting you.
Jeremy: They are vetting to make sure you are giving accurate email addresses, phone numbers, names, and it is coming back through. How crazy is that? So let’s wrap up. The two big trends: Zillow is now Google of real estate. When you contact Zillow understand you are contacting an agent. You might want to visit us at Sold in St. George dot com if you want to bypass Zillow and not have them vet your information. And number two, there is a good chance if you have your home on the market, the price, you are asking too much, and you are going to need to sit down with a good agent as we move into January second, first of 2019, whatever the first business day is, and get that price amended right now. Right now so you are not chasing the snowball down the hill.
Jeremy: Yuck. Yuck. Thank you
Zupas Coming to St. George and Top Home Buying Challenges! (St. George Real Estate Morning Drive Show)
Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable!
Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing email@example.com.
Mike: KDXU News Time. It is 8:35 on a Thursday. It is time, once again, for another edition of the St. George Real Estate Morning Drive as we check in, of course, with the voice of St. George Real Estate. Here is Jeremy Larkin.
Jeremy: Yes, the little pause that you heard Mike make, it was actually him nudging me back awake. I apologize. I was just slipping off to sleep here in the studio.
Mike: Anything I can do, Jeremy.
Jeremy: I know.
Mike: I am here for you.
Jeremy: No way, man. On a beautiful morning like today, I had that little, I do not know if you guys have this, you do, you get up at four in the morning. It is the hour after I wake up, I have that little dozie. Good morning, Michelle, welcome to the show.
Michelle: Good morning.
Jeremy: I have got Michelle Evans here, our Director of Buyers at the Larkin Group. Amazing woman. It is like one hour after I get up –
Jeremy: — I am ready to go back for a nap. And I always say if I could take ten minutes and nap right then, I would be so solid. It would make the whole day. But I did not.
Jeremy: And I did make my bed. Did you guys make your bed this morning?
Michelle: Sure did.
Michelle: Jesse says no.
Jesse: My wife was still in bed.
Jeremy: No, I did not really do a good job, but I was walking out of the house and flicked that thing up. That bedspread. There is something about it.
Michelle: Yeah, when you come home, you feel respected like ah, that feels good.
Michelle: It is inviting.
Jeremy: It is like when you get money in your wallet and then you put it all in crooked and crazy. You have got to put, Suzy Orman, I was reading one of her books.
Jeremy: She says put all your dollar bills in and then your fives and then your tens and then your twenties. And some people have fifties and hundreds. I do not even know what those look like.
Michelle: Who is even on those?
Jeremy: Yeah, I do not even, jeeminy Christmas. So, yeah, it is like making your bed and having the money in your wallet straight. You just have to do it.
Jeremy: So I did. It was lazy.
Michelle: Good for you.
Jeremy: It was lazy, but I did it.
Michelle: My money is jammed in there.
Jeremy: It is wedged in there. I know. You have a lot.
Michelle: Oh yeah?
Jeremy: Let me tell you something, guys. I had some fun and sad, disappointing news. We will find out if it is real, but McCrae Heppel, our good friend over at Eagle Gate Title had made a Facebook post about Zupas coming to St. George. He said last time it was a false alarm. This time it is real. Zupas is taking over the Brick Oven at the corner of River Road and the Boulevard. It should be open in the next 3-6 months. Thank you for the info, Links Commercial Real Estate. Yeah, buddy. This is pretty cool. I saw this this morning, and we are going to share this into our Facebook page. If you are not watching, by the way, good morning, you can watch us Facebook dot com slash Jeremy Larkin. Just the way it sounds. This is kind of a deal. I am Zupas aficionado.
Michelle: Oh, a fan.
Jeremy: I am a huge fan. I am a huge fan.
Michelle: The basil tomato soup –
Michelle: — with the orzo.
Jeremy: See I am a chicken tortilla guy.
Jeremy: What is it called?
Michelle: Yeah. Chicken tortilla soup.
Jeremy: And I do a lot of chicken chili. It is what they call it. Something like that.
Michelle: Oh. I have never had a bad anything in there.
Jeremy: Well, here is what I get at Zupas. I get the TSA, which is not for the security administration that runs the airports.
Michelle: They do not pat you down to –
Jeremy: Turkey, spinach, artichoke. So Jesse is hiding over in the corner this morning. Jesse Poll. Just because this guy is great. He set up our camera. I told him I was going to fire him from doing our camera work yesterday, but he changed his mind. He is going to keep doing it. It took me 15 takes to shoot a video for our Basket Brigade charity that we are going to deliver –
Jeremy: I do not know. I took a screen shot that there were so many takes and half of the takes were my fault. But gang, digressing back, I guess because I still have it pulled up here, Zupas. Zupas is coming to town. We will see. I am going to share the link from Links Commercial Real Estate. That is kind of fun. You can check this over at the Larkin Group’s Facebook page. Kind of going to be fascinating. Our listeners out there, whoever is watching us on Facebook live, chime in. Are you a Zupas fan? Do you even know what Zupas is? And sorry, Kneaders, Zupas is like two to seven steps ahead. They –
Michelle: They rock it.
Jeremy: They are so good.
Michelle: So good. That little strawberry.
Jeremy: Oh, oh, oh.
Michelle: Chocolate covered strawberry.
Jeremy: So check it out. If you do not know what Zupas is, they are just kind of, I do not know how to describe it. It is fresh food. People call it a sandwich shop, but it is so much different than that. It is just very fresh foods, salads and sandwiches, and you are ordering right there, and they are prepping it in front of you. It is just fantastic.
Michelle: It is good.
Jeremy: It is the very best. So Zupas fans out there, check us out at Facebook dot com this morning slash Jeremy Larkin. Or, or 94.9FM 890AM, and we are going to talk to today a little bit about what you think the biggest stresses of home buyers and sellers are. Jesse, I am going to plug you in on the microphone for one second. I need to give you a quick update on our basket brigade. What do you know? Tell us what we have going on about the Basket Brigade charity.
Jesse: So at Basket Brigade, we are at, I believe, 120 families, and we are going for probably 2-250 this year. Right now, we are still collecting money to see who wants to feed a family. That is probably the best part is either volunteering or really feeding a family in the area. It is just unbelievable.
Jeremy: I put you on the spot.
Jesse: You did.
Jeremy: I put you on the spot. How many years have we done this now?
Jesse: This is the, I think this is the fourth, but is it the third? This is the fourth year we have done it. The third year we have been running it.
Jeremy: The fourth year that we have handled it ourselves. Was it the Palmer family?
Jesse: Yeah, the Palmer family.
Jeremy: They are all remarried and stuff like that, so it is kind of hard to keep the names straight. So we took this over from the Palmer family, but this is year number three for us.
Jeremy: We fed 264 families last year. What about, where else are we at? What was it the year before? Do you remember?
Jesse: 222, the year before.
Jeremy: 222, like the 222nd. So we did 222, and we did 264 last year.
Jeremy: We are cranking up. What do you feel like our biggest needs are right now? Because a week from Saturday, we are delivering Thanksgiving to, we are delivering Thanksgiving to the homes –
Jeremy: — of our families in need.
Jesse: One, we need drivers. We are in the state of Utah, which we have 100 kids and one driver. So we do need drivers the day of.
Jeremy: Yeah, thank you for that.
Jesse: So if you guys could volunteer. Come and help us put the baskets together and drive them to where they go, that would be awesome. We also need more nominations. If we are going to get 250 this year, we need about 130 more families. And we could always use some more money, some dough, because it does cost money to feed these families.
Jeremy: So what does it cost us to feed a family this year?
Jesse: About $45 to feed one family.
Jeremy: Okay. Okay.
Jesse: And you go can to either Facebook Utah Basket Brigade on Facebook or St. George Basket Brigade dot org to do all three of those things – volunteer, nominate or donate.
Jeremy: And my Google drive just decided to come back to life after I rebooted everything.
Jesse: Oh good, so you can tell us where we are at.
Jeremy: 119. We are 119 families.
Jesse: Oh, I was close. I said 120. I was guessing at 120.
Jeremy: Very, very close. So, 119 families. Jesse has almost taken this on like his pet project.
Jesse: This is my favorite event of the year. Close in front of Santa Claus, but this is my favorite.
Jeremy: So he has been known to dress up a little bit at Christmas time. So thank you.
Jesse: I am out of here.
Jeremy: We are going to put a show on.
Jesse: The show must go –
Jeremy: St. George Basket Brigade dot org and feed a family or nominate a family or families and when we say a family in need, notice we do not say needy family. There is a difference. These are not needy people. These are people who are going through some type of crisis whether it be financial or a family situation. Some of them would not be folks you would think need a meal, but there is some other element going on.
Michelle: Just need some support and some love and let them know that people care in our community.
Jesse: Yep. Yep. It is going to be incredible. And that is what it is. It is just that hey, someone loves you type, the message is fantastic. So, all right, gang, let’s transition. You know what to do with the Basket Brigade. We have teased around and had some good times here this morning, and I was not, man, there are six lanes on Bluff Street. This thing is pretty cool.
Jesse: It threw me off that I could actually take Bluff to come to the Cherry Creek Studio this morning. I am Jeremy Larkin, host of the St. George Real Estate Morning Drive. I have got Michelle Evans with me, our Director of Buyers.
Michelle: Thank you.
Jesse: She is a lovely human.
Michelle: Why I thank you.
Jesse: I think you are. I think you are. Michelle has been in my business world now six years.
Michelle: Six. Yeah. That is right.
Jesse: Yeah, six years we have spent cruising along here, and good morning to all of our friends there who are pinging in and watching us on Facebook Live. Michelle, tell people, I say Director of Buyers, they do not really know what that means. Right? So if you just envision a person in fluorescent vest with a lit-up wand directing –
Michelle: Directing people everywhere they need to go.
Jeremy: Do you know what I think of?
Jeremy: Traffic controller. So tell people what your, how would you describe your role?
Michelle: Well, we have several agents on our team and their exclusive role is to help folks buy land or homes or investment properties, and so I help head that up and help train those folks and be on the cutting edge of what is out there with inventory and help them buy.
Jeremy: Yeah. Do you have any idea how many clients you have served over time?
Michelle: I know it is a couple hundred.
Jeremy: It is many.
Michelle: 250, maybe somewhere around there.
Jeremy: It is many. Yeah, it is many.
Jeremy: The reason that I even ask is that when we speak with buyers and sellers, there is obviously on the selling side, some people want to go at it on their own. Kind of like For Sale By Owner.
Jeremy: They want to do their own thing. On the buyer’s side, there really is not a term for people who want to just buy a home on their own. I do not know that there is a terminology.
Jeremy: The terminology would just be somebody who feels like they maybe might save a commission or lower the price of the home that they are buying by going to the listing agent.
Jeremy: That is not as slick as FSBO, For Sale By Owner.
Michelle: Right. No fancy term for it.
Jeremy: The reason I put it out there is let’s say that it has been 250 transactions. You think about the average person, human being who is going to buy or sell real estate. They are going to do that in their lifetime 5-7 times, the average person, max.
Jeremy: Now, there is going to be a listener well, I have bought and sold 25 rentals. I understand that. You are not average.
Michelle: Right. That is the exception.
Jeremy: And the person who says I have never bought a home, that is also not average. We are talking about an average. If you think about Michelle having walked down the aisle with these buyers, right, and taken them right to the altar, 250 times, I want you to think about how many lifetimes is required to do that 250 times. And of course, that is, she came to join the Larkin Group six years ago and then you were where before that? Was it Weichert? Was it Century 21? What did they call themselves then?
Michelle: Well, it was Century 21, and now they have change. Now they are Weichert in town.
Michelle: I was with Century 21.
Jeremy: Why did you even, what I want to know is why did you even get in the business? What were you doing before and what would possess you? Because most of us just failed into this. I did.
Jeremy: It was just kind of my alternate career.
Michelle: Right. Right. Well, I was going as a solo agent doing listings and buyers. And then I had a really great friend that said you really ought to check out Keller Williams. It is amazing. And I thought well, I will stroll over there and see. I am pretty loyal where I am, and I like the folks that I am working with. It seems to be going fine and walked over and was just blown away by the professionalism and the training and the culture of Keller Williams. So I joined Keller Williams and then had the opportunity to meet you and you said you were looking for a buyer’s agent, and I thought well, I do not really even know what that means.
Michelle: I did not know.
Jeremy: What does this mean? What is this terminology?
Michelle: Yeah, what is that? And thought in my history, I probably really love working with buyers. I do not mind working with sellers either, but I really enjoy the process of helping folks buy a home. It is difficult. It can be difficult and stressful, but it is really a joyful one. It is really rewarding.
Jeremy: And as an educator –
Jeremy: It was resonant with you.
Michelle: Yes, yes.
Jeremy: I have a good friend who also would say resignant. We kind of get confused about whether it is resonant or resignant. But anyway, I think it is resonant.
Michelle: I believe it is. Yeah, just teaching people about the market, teaching people about the process. It is especially fun with first-time homebuyers because they have a lot of questions. They are not sure what to do and what to do first. So it is just lovely to sit down with those folks, answer their questions, tell them what they do, what I do, what the lender does, what title does, and just walk them through the process and then help them find their first home.
Michelle: That is fun.
Michelle: It is a great job.
Jeremy: And it is not easy.
Michelle: No. No, not easy. There are a lot of hurdles along the way.
Jeremy: Because according to HGTV what you do is you get on camera –
Jeremy: — and first of all, you have got to be a celebrity, and then you just –
Michelle: I will work on that.
Jeremy: — drive around and you show them four, yeah, you show them four or five homes, actually three, because three is all that really fits into a 30-minute episode on HGTV.
Jeremy: And then they write an awesome offer and –
Michelle: That same day.
Jeremy: And that is it.
Jeremy: And that is kind of how it works.
Michelle: Yeah, it is certainly not like that. That is TV.
Jeremy: That is television.
Michelle: That is taking the whole process and smashing it into 30 minutes.
Jeremy: Oh, you mean like the Bachelor and the Bachelorette? That is not an accurate depiction of dating in the real world either?
Jeremy: Just lining up 27 people to date one person? Oh, okay. Because I was getting confused also by that.
Michelle: Right. Yeah. It is dating.
Jeremy: It is television, so Michelle comes to us, and she has been directing our buyer team this year, and I was looking in our system. They have closed 83 transactions this year, and that is a lot of buyers. My gosh, it is $23 million dollars in real estate that you and or your cohorts have handled this year.
Jeremy: We have got some amazing ladies that work with her. Jessica Marron, Marlene Mussehl, and Alexandria Ludlow. These are great ladies and Dezlee Hancock is kind of like the little secret weapon in there, who is –
Michelle: Yes, she is.
Jeremy: So this is kind of cool. We have done something different with our business. Back in the olden days, whatever those were, a real estate agent would do everything with the client. Right?
Michelle: Right. So many balls in the air.
Jeremy: Racing around town, they were in high heels or a suit coat and a tie, putting, pounding signs into the ground and sweating and doing open houses and writing offers and receiving offers and processing paperwork. It was kind of maniacal. We have taken a very, it is more of a popular approach now. It is not unique anymore. But we have a team of people, so we have got ten folks between all of us –
Jeremy: — cruising around and helping our clients. It means that we have administrative support in the office. Someone answering the phone at all times.
Jeremy: I mentioned Dezlee who works with us. She will go out and Michelle is best served writing offers, negotiating for clients, meeting with clients face to face, and Dezi will go out show a lot of those homes.
Michelle: That is right.
Jeremy: She is great and really adept at getting to know the needs of the client, getting in the car with them, taking them out. It is a different model. So, $23 million dollars this year.
Michelle: Well, I think some people have run into that frustration where they will call their agent and their agent is out of town or not available, and they think, ah, especially in the market that we have been in.
Michelle: That is not good. You have got to get in there. Early bird gets the worm. You want to get in there and see if that house is a fit for you. I think what we have set up is a way to best serve the client such that we can meet their needs on their schedule, their timeframe.
Michelle: Because if I cannot go, Dezlee can go. Or if Alex cannot go, Dezlee can go.
Jeremy: Which is so fantastic.
Jeremy: To say you cannot be in two places at one time, that would be HGTV.
Michelle: That is right. Yeah.
Jeremy: Super human.
Michelle: That is fairy land.
Jeremy: That is fairy land. What do you think, Michelle, so let’s talk to this, what do you think the biggest challenge is? Maybe there are a couple. When you start to get into three or four, we probably have too many.
Jeremy: What are the top two or three challenges that your clients face, have been facing and that challenge is going to change right now? It feels like it is changing.
Michelle: It is.
Jeremy: What have they been?
Michelle: Well, I think it depends on the price point. If it is under, I would say, about $400,000, the biggest challenge has been lack of inventory.
Michelle: Not only not a lot of inventory, but then once somebody finds a property and they put in an offer, then they find out they are up against six other offers.
Michelle: So the odds are –
Jeremy: Which is just kind of emotionally and psychologically, there are two different things going on there.
Michelle: It is so draining.
Jeremy: It is pretty exhausting.
Michelle: It is exhausting. It is exhausting. And I think some people have felt pretty beat up by the process.
Jeremy: Yeah, the term that I always use is buyer fatigue.
Jeremy: So you write an offer, typically, what a buyer would do is maybe write the first offer on a home that was not a good enough offer. Right?
Michelle: Right. Yeah.
Jeremy: Does this resonate?
Michelle: Yeah, try to go low.
Jeremy: You try to go low. And then they try on a second home, and they get beat out. And then they try on a third home, and there are six offers. And what do they start thinking at this point?
Michelle: That they are never going to get a home, for one.
Jeremy: Yeah, and maybe, maybe it is just not worth it. Maybe I am just not going to mess with this right now.
Michelle: Yeah. Right. Right.
Jeremy: Because I heard interest rates are skyrocketing. Right. That is how people take the news that interest rates went up a quarter of a point.
Jeremy: So with this buyer fatigue, what you are saying is people will get, so what is something that a buyer might say that is frustrated, besides curse words. Let’s not use those.
Michelle: Yeah, let’s not do that on the radio.
Jeremy: But what would be a stance that client would take that is worn out, that got beat out on a home? What are the things they are saying?
Michelle: Right now it will be well, maybe we will just wait until after the holidays.
Jeremy: Okay. Okay.
Michelle: Maybe we will just wait. Do you think there are more properties coming on the market, they will say.
Jeremy: Got it.
Michelle: Do you think there is more inventory coming on? With all this building isn’t there more inventory?
Michelle: Well, yes, but not necessarily in your price point and maybe not necessarily in the area that you need it to be. So there is some frustration there. We cannot always find what they are looking for.
Jeremy: One of the common comments would be maybe we will just wait until the holidays are over.
Michelle: Yeah, wait until the new year.
Jeremy: Interestingly, one of the greatest challenges of home sellers, which is kind of bizarre, so Michelle Evans is with us. Our Director of Buyers at Larkin Group, and we are talking about some of the greatest challenges of buyers and sellers, and she mentioned that buyers are writing offers and then they are getting beat out, under 400. That there was a lack of inventory. There was not a lot of homes available for them.
Michelle: Right. Not a lot to choose from.
Jeremy: Interestingly, I think what happens with sellers is they have a problem that is a different problem that does not even seem like it is a problem. But it is that when the market gets escalated like this, the sellers want to ask more than their home is worth more than what the market will support.
Jeremy: And then they get into a fatigue situation where they price their home at 400, and then they find out it is not showing so they price it at 385, and they find that it is not showing. And then they finally get to $369,000, and they get an offer and that took 90 days and they are pretty frustrated, and they have been making their beds every morning like we talked about.
Michelle: Right. Well, the frustrating part with that is that in the eyes of the buyer, something is wrong with that home.
Michelle: So it is really not a good strategy. If you are overpricing and then you keep coming down and coming down and coming down, then the buyer is on guard like what is wrong with that home.
Jeremy: Yes. Yes. Okay so, question. In this current market, and it is evolving. How do buyers approach that? We kind of have limited time on the show.
Jeremy: How do they approach there is a lack of inventory, I cannot find what I want. How do you approach it?
Michelle: Well, we as buyer agents, we are going to be looking for things that are off market. That is part of the reason you would want to use an agent. Right? Because we are going to be looking for things that are off market, and you want somebody to be holding your hand through the process, helping you find things, getting you on a search so that you can see what is coming on the market, on the MLS. We have got a personalized search for you. So you are not going to get a deluge of properties in your inbox. You are going to get things that are paired down just to your criteria.
Jeremy: Would it be typical for somebody to, a home to just come on the market and be just gone the same day?
Jeremy: Yeah, like before a buyer even knows it because they are busy tending to their child or working.
Michelle: Right. Right. Exactly.
Jeremy: So it hit the market, come off and ah.
Michelle: Yeah, I did not even see that one.
Jeremy: Yeah, darn it.
Michelle: So if you have got an agent watching for you, looking, because we see the hot sheet on the MLS every morning.
Michelle: We are looking for that, and we have got a list of buyers that are looking. So we are seeing do any of those match up? Does this fit –
Michelle: — that price point? Is this what you are looking for?
Jeremy: Well, what I think is kind of cool about what you are saying is we actually have access to a whole bunch of housing inventory that is not really on the market, and these are –
Jeremy: — homes that are either not yet on the market or they were previously on the market, they did not sell, for whatever reason, the seller took the home off the market –
Jeremy: And we have access to go back really almost an indefinite amount of time and start saying hey, did you ever sell your home. I have a buyer who wants to be in Santa Clara Heights, Little Valley, Green Springs. Right?
Jeremy: Absolutely, and for the sellers, this challenge of pricing their home too high, I do not know if you are going to like the solution. When the market starts to correct like this, people say are home values falling? No, the extra 10% the sellers were trying to get was actually never real. So they did not fall. It was the cream on the top that just had to wiped off.
Jeremy: Because it was not actually real. There is this perception that maybe values fell.
Michelle: Right. Right. When they really did not.
Jeremy: No, not at all. Home values are not falling.
Michelle: What we are seeing with buyers, a lot of them, they are not paying that list price anymore. They are digging in their heels and they are not doing it.
Jeremy: Up to 90 days ago, they were.
Michelle: That is right. It was take it or not.
Jeremy: Two minutes. Two-minute bell. Incredible. What do you think? Final thought. We are moving into a new market.
Jeremy: What becomes the challenge now for buyers? If values are not falling but sellers cannot get their prices and buyers are going I am not willing to pay that. Then what happens?
Michelle: Well, then we have some negotiation issues. Right? Then we have got to take a look at where can we find the sweet spot?
Jeremy: Which is like the new stress, right?
Michelle: Yeah, it is a new stress. It is more negotiating.
Jeremy: Because the idea is like oh, great I can get a better deal?
Jeremy: Only in this interim period when the buyer and seller cannot come together in the middle, that is hard.
Michelle: It is hard. It is hard. And I think people need to consider, especially those in the lower price points, if you are going to be waiting for a better deal or more inventory, keep in mind that interest rates are more than likely going to go up one more time before the end of the year.
Michelle: And for some people, that just edges them right out of the market.
Jeremy: Yeah, if you are right on the cusp, and I will wrap up with this thought, if you were trying to afford a $1620 mortgage payment and interest rates go up a quarter point, it went to $1680 or $1700 and you are out.
Michelle: That is right.
Jeremy: Guys, visit us. Thank you, Michelle.
Michelle: Thank you.
Jeremy: That was Director of Buyers. Please visit the St. George Basket Brigade dot org website and donate or nominate a family. We are 9 days out. Ten, ten. Thank you, Mike.
Mike: You have been listening to the St. George Real Estate Morning Drive with the voice of St. George Real Estate Jeremy Larkin. And as always, if you would like more information, please call 275-1690 or find them online at Sold in St. George dot com.
Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable!
Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing firstname.lastname@example.org.
Mike: … St. George Real Estate. Jeremy Larkin.
Jeremy: Good morning. Very good of Dave Matthews to custom record that little bit for our show. Or wait? Is that actually one of his popular, real songs?
Robert: No, that is just for us.
Jeremy: Okay. Cool. Very good. I did always wonder if that was just for us. Okay, guys –
Robert: I like letting it run a little longer, too.
Jeremy: I do, too, because ah, man –
Robert: It gets you going.
Jeremy: It is a good one. It is a good one.
Robert: It is a good one.
Jeremy: It is a really good one.
Robert: It is one of my favorites.
Jeremy: Hope you are all hanging out with us this morning. Jeremy Larkin here, host of the St. George Real Estate Morning Drive. I have got Robert MacFarlane. I have got Jesse Poll. Mike McGarry is even still here in the studio. He decided not to just run to the restroom or something during our show. I appreciate it. Good morning to you guys, and thanks for being on here this morning. I hope people are watching on Facebook Live. Should we tell them how to find us? Facebook dot com slash Jeremy Larkin. Facebook dot com slash Jeremy Larkin. This morning, we are live, and if you are out there in the Facebook-o-sphere, you can just tune in right there and watch what we are doing, and comment and God bless, bless Dave Matthews and God bless him also, Jessica.
Robert: And America.
Jeremy: And nothing better than Larkin Live. That is correct, Patrico. That is correct. And I have got Robert, and I have got Jesse, and I have got, man, this is a good morning. I am glad you guys got up. Jesse, what time did you get up this morning?
Jeremy: Wait a minute. I thought Robert was on a mic. Are you not on a mic?
Jesse: We do not have one over here.
Jeremy: Oh, oh, oh, oh, oh.
Jeremy: 4:45 in the morning. Yeah, Robert.
Robert: It sounded like you are on Price is Right where they tell him to say the price or the product that they are going to get to get up on stage.
Robert: It sounded like Jesse said 445. 446. I got up at 4:46.
Jeremy: And I got up at 4:46.
Robert: One minute later.
Jeremy: Is that classic? Is that classic?
Jesse: The only reason I know that is I hit snooze at 4:30.
Jeremy: Oh okay. Guys, I will be honest that I was up at 4:15, splitting headache. So how many people out there listening to the show this morning, did you wake up, did you have a headache this morning? I know it is because I was clinching my teeth in the night. I know it because I have been doing that. Splitting headache.
Robert: You need a mouthguard, man.
Jeremy: I have a mouthguard.
Robert: Yet, you were still clinching.
Jeremy: Absolutely. Well, the mouthguard, it is not like it has spikes on it, pointing up and stopping you.
Robert: It seems like that would be a good invention though.
Jeremy: It is just there to protect the teeth.
Robert: I think the spikes would work. It sounds like it.
Jeremy: I went to Excedrin. Excedrin is typically my go to. No. So that was 4:15, and then 5:15, so it is has been an interesting morning.
Jesse: So everybody always says that do not have to wear them, I have one and at about two in the morning I wake up and have to find it in my bed somewhere.
Jeremy: Yeah, I do not have that.
Robert: Subconsciously you are just like get rid of this thing.
Jeremy: That is like a retainer when you are in seventh grade. I do not have that. Patrick is asking us what on earth someone does at 4:45 in the morning. You get your mojo on, Pat, that is what you do. Right, Jesse?
Robert: Journal. You do a little meditation.
Jesse: Well, I will tell you what I was doing this morning is adjusting the Basket Brigade documents so that I made sure I know how many drivers and captains. We just want to make sure that we are ready for Saturday and ready to go.
Robert: When we have 190 volunteers –
Jeremy: Okay, let’s segue. The perfect segue. So thank you to all of our listeners. You guys set it up brilliantly as though we had scripted it and we had not. Saturday our 8th, 9th, I do not know which it is. It is long running. The St. George Basket Brigade and thank you, like an incredible amount to everybody out there who has donated, excuse me, who has volunteered, who has nominated families. We are at 175 families to be fed Saturday?
Robert: And counting.
Jeremy: 175 and counting.
Robert: I think a few more coming in.
Jeremy: So we have closed, air quotes, the nominations down, but somehow, we kind of get some squeaked in there. Saturday, we have 212 volunteers that will gather up in Dixie Middle School and stuff these, pack these baskets. They are laundry baskets, and they will go out, and the nominated families who are in need will be assigned to volunteer groups, and they will each take three to four baskets, knock on the door just like that, and let someone know that they are loved and that someone was thinking about them. It is an amazing experience. If you have not fed a family, I wish I could ask you to volunteer. We are packed. I wish I could ask you to nominate a family, but we are packed. If you have not donated and you could feed a family, we always need additional funding and you can do so at St. George Basket Brigade dot org. St. George Basket Brigade dot O-R-G.
Robert: Well, something to keep in mind. Whether you make it in before we do the event on Saturday or not, we are a non-profit organization. So the funds will go to other deals that we do over the year. We do Christmas gifts. We do, what is it? Secret Santa? We do a bunch of different things.
Jeremy: Coins for Kids after this.
Robert: Coins for Kids. That is right.
Jeremy: Any excess funding, surplus funding from the Basket Brigade then will go to serving families at Christmas time. And by the way, I do have a test and yes, so I shared this. Facebook Live from Facebook dot com slash Jeremy Larkin, if you are not watching. I shared it over to our Larkin Group page. Facebook dot come slash St. George Experts, and it is running beautifully there. So you can share it right into your own pages, guys. It should be running there.
Jesse: There is your Facebook expert right there that you were looking for.
Jeremy: We needed a Facebook expert. So I have got Robert and Jesse here in the studio and again, gang, if you can feed a family, and these guys are instrumental. This event does not go down without these guys participating and 212 volunteers and all the donations. So that is Saturday and you can visit St. George Basket Brigade dot org. We would love it. We would just absolutely love your help in pulling off this event. So we are going to talk about some very interesting trends, and by the way, I am going to kind of do something fun today for our listeners. Hang on with us today, and we are going to tell you how you can come in and pick up a pie from us on Tuesday. So it is our, what annual Pie Day? Sixth, seventh?
Jesse: I think it is our seventh.
Jeremy: I think this is the seventh year we have done Pie Day, and we have a, but you have to wait. You need to stick with us until nine o’clock. We run until nine o’clock. I am looking at the countdown timer. We are about 17 minutes here left on the show. Be with us, and we will have you come pick up a pie at Larkin Group headquarters, Tuesday from 4-6pm. That is a gigantic Costco latticed apple or pumpkin. Do you guys know how much those weigh? Did you watch the video that I shot?
Robert: Latticed apple?
Jesse: Two pounds.
Jeremy: A three-pound pie. The latticed apple pie is about three and a half pounds.
Robert: That is what I am talking about. That is what I am talking about. Mike is over there drooling.
Jeremy: Yeah, yeah, well Mike will be invited also. Stick with us, and we have never actually opened this up to radio listeners. We have always done this for clients, but this year, we are treating you like a client. So check that out. We will talk about it at the end. It is the Larkin Group Pie Day, and we will tell you how you can RSVP and all that kind of thing.
Jesse: If you are on Facebook, it is in the comments.
Jeremy: It is in the comments. We have already given it to you. Boom. All right, gang, we are going to talk about, honestly guys, projecting and forecasting real estate into 2019, and there is so much information, Robert and Jesse, we can go over here. I am going to maybe segue us a little bit and point to where I think we need to look because this is, there is so much information that we could provide. So the real estate market is going through a little bit of a shift, Robert. Right?
Robert: Your analogy that you did, the cream off the top, that was perfectly said though last week. Go over how you said it again because I know I will massacre it.
Jeremy: The cream on the pie.
Robert: The cream on the pie. I always think of it from a beer, the head of the beer.
Jeremy: The head of the beer. Sure.
Robert: Scrape the top off.
Jeremy: Sure, sure, you can go there.
Robert: The soda.
Jesse: I was thinking like the cream of the milk or the butter.
Robert: Oh, okay. That works. That works, too, country boy, thinking of that.
Jeremy: That is exactly –
Robert: Clearly, I know everybody knows where my head is at.
Jeremy: Yeah, I like it. I like it a lot. So what I was talking about last week or the week before is that we are seeing a shift in the real estate market, and maybe like a teaser that I give someone is we are starting to get these emails as real estate professionals that say, from other real estate professionals, hey, price reduced. We just reduced the price of our home. We just reduced the price of our listing. Hey, the seller is really anxious. Seller motivated. We are sitting on five spec homes. Now, the market is not crashing down. But what is happening is, I heard this one two days ago when I shared this with the guys in the studio. I went to a Board of Realtors meeting and someone stood up and said hey, we have ten spec homes under construction. And I thought ten spec homes? These are almost always in the $4-500,000 range. We were not hearing this six months ago. So there is an ebb and a flow, and there is a little bit of an ebb. What is happening is that it is creating this kind of perception that home values are declining because you go oh my gosh, all these people are reducing the price of their home to get it sold. The reality is that they were asking more than the market would support by 5-10% typically, and in reducing the price, they have simply reduced it to where the market actually always was the whole entire time.
Robert: Right. That is like Coca-Cola is on the market $50, and people are saying well, I will sell it to you for $58 or $60, and the stock market is like no, no, no, it is $50, so we are not going to buy it until it gets down to $50 because that is what the price is.
Jeremy: Yeah, you just do not get to sell your stock for more than the market is bearing. Right?
Jeremy: So as these prices are reduced, rather than folks thinking ooh, the market is just totally contracting and values are already falling, that cream that was on top, that 5-10% that was actually outside of the market that the seller was asking in excess of what the market will bear, it is like that cream, and it is just being scraped right off the top. Here is the challenge we have in real estate, guys, is that it is such a consumer confidence-driven business that the moment that kind of gets out there, then people start to go oh, I have got to get my footing. Maybe this is a bad time. Maybe it is a bad time to buy. Maybe it is a bad time to sell.
Robert: Right. It is reactionary.
Jesse: Yes, it is reactionary.
Robert: The idea that just we are leveling out to where we should be, now there is an overreaction, and everybody says oh, everything is changing. Now I have to overreact as to what is going on.
Jeremy: Yeah, absolutely. Absolutely. So check this out. Okay?
Robert: We almost talk ourselves into a declining market.
Jeremy: We do.
Robert: Rather than actually being reality, we talk ourselves into it.
Jeremy: We absolutely do. And let me say very specifically, this is going to be a more challenging time for people with homes above $400,000, especially $4-500,000 because in the speculation market, the spec home market, what is happening is a lot of spec homes are going up. And a whole bunch of people 6-12 months ago purchased building lots, here, developers, builders, and once they have started on these, it is like they are going to build them. You do not stop construction midway.
Robert: Unless you are in Winchester Hills.
Jeremy: Yeah, up in Ledges. Up in Ledges.
Robert: Up in Ledges.
Jeremy: Let me share something. So guys, if you scroll down here a few pages Robert, on them. We are sharing some economic data. Year-over-year price changes nationally, the low-price range, United States of America, was up 8% over the last year. So 2017/18 over 16/17. 4 ½% in the high end. Right?
Robert: The idea that rising prices float all boats, right? That is not, it sounds great, and it seems like that makes sense. However, clearly the lower prices are going to appreciate a lot faster than the higher prices.
Jeremy: Yeah, yeah. That is exactly right.
Robert: It just make sense that way.
Jeremy: So I will share a thought. The National Association of Realtors conducts a home survey every year. In the past, I have looked at this, and they typically survey 100,000 people to get about 10,000 responses. It was kind of how that metric worked. They shared this. In the third quarter of 2018, because they ask people how many people are buying, how many people are selling, how did you find your realtor, how did you find your home, was it an open house. They asked them everything. How confident are you in the market? They said in the third quarter of 2018, 27% of people believe that now is a good time to sell a home, which is the highest percent recorded since the collection started in 2015. This is a 10% increase over 63% from 2016. So it is kind of interesting. In terms of consumer confidence, when they surveyed folks here this quarter, 2018, 77% of folks felt like this is a great time to sell their home. When do people typically wait to put their home on the market until?
Robert: Springtime obviously.
Jeremy: Yeah, springtime. Right?
Robert: That is when we do everything. Right? We clean our house. We change our New Year’s resolutions. Right? We normally quit it by springtime.
Jeremy: Oh, that is January 15th, man.
Robert: New Year, New Me. That kind of thing. Same thing with a home. New Year, New Home. Let’s do it.
Jeremy: So if you look at this –
Jesse: Is that why my wife has me painting right now? New Year, New Home?
Robert: Yes, yes. Absolutely.
Jeremy: She always starts at Thanksgiving is what you have told me. There you go right?
Jesse: Pretty smart though.
Jeremy: Yeah, so here is what is interesting. Nationally, most homes hit the market in April, May, and June. In St. George, we tend to see most homes hit the market a little bit earlier. Right?
Robert: Our springtime is significantly earlier than nationally because this is a national –
Jeremy: So guys, what is the annual event upon which everyone wants to list their home in St. George?
Robert: Parade of Homes. Of course.
Jeremy: Parade of Homes. That is when you will see an extra 150 For Sale By Owner signs pop up. Right?
Robert: Every million-dollar home in St. George goes on the market. Every single one.
Jeremy: It is kind of like –
Robert: It goes from like maybe five or six to 63.
Jeremy: Yeah, because look, my home is worth 700, but if I can get a million, I will sell it.
Robert: Done. That extra 300 grand, we could just put that in the bank.
Jeremy: So there is this perception that during the Parade of Homes all of a sudden, miraculously the real estate market will take a massive uptick, and buyers will suddenly lose their minds and do unreasonable and irrational things and overspend. That is not going to happen. But our springtime is more like January, February, March, where most listings across the country are hitting the market April, May, and June. Right? Because if you live in Chicago, it is not spring for a while. Guys, if you look at this, they talked about inventory levels year over year. You will kind of see. Outside of our radio show, you cannot see this. This is the rainbow. It is kind of a rainbow chart. Blue, yellow, and red. And when we look at inventory levels, what is fascinating is it actually showed how this looked. In December of 2017, there were 1.4 million homes for sales. Right? Guys by June, 1.4 million across the country in December. By June, how many were out there on the market?
Robert: Almost 2 million.
Jeremy: Yeah, an extra 600,000 homes hit the market between December and June across the country. It is like a 30% increase, 25%.
Jesse: A couple of years ago, we actually did, or you did a report on December home sales. What we were trying to figure out is did more homes sell in December and during the Parade of Homes. But what was interesting about that is we found out that by March or actually by February, three times the number of homes are for sale –
Jesse: In Washington County.
Jeremy: This is kind of fun. Thank you for bringing this up. I just double-checked our URL. You can visit December Home Sales dot com. We actually have a front page –
Jesse: That is right. I will put it in the comments so people can go to it.
Jeremy: Yeah, December Home Sales dot com. The truth about selling your home during the holidays. So what is the misconception?
Robert: Of course, nobody wants to move during the holidays.
Jeremy: Yeah, nobody is going to buy. Nobody is going to sell. Nobody is going to do anything over the holidays.
Robert: Well, and St. George is not like every other market though. We have got to remember that almost half of the sales in St. George are cash sales because people are coming to it as a retirement community.
Jeremy: Is it 50%?
Robert: It is almost 50. I think it like 47 something. It is a lot of cash sales and it is because we know we are a market where people come from to move here.
Robert: And so, they are coming here. They have sold their home in Salt Lake or they sold it in California somewhere, and now they are paying cash for their home because they made a significant amount of money off of it. They come here, and they pay cash.
Robert: And so because of that, there are certain markets, we have got to keep focus on this, townhomes that cannot be rented, that cannot be investment properties –
Jeremy: Got it.
Robert: — probably are not going to be selling crazy in December. However, investors who want to place their investment money before the first of the year, who hey, it is the end of a six-month period and now the renters are out, and they are like hey, let’s sell it. Right?
Robert: That is a market or a retired couple. Everybody likes going to the holidays with family. But a lot of people do not. They are like ah, I will move in Christmastime. That is not a big deal for me or Thanksgiving. Young families probably are not moving.
Jeremy: Correct. Correct.
Robert: Investors. Older families, established homes. They are okay moving during the holidays, and it shows with the number of sales. If you go to, what is it? December Home Sales?
Jeremy: December Home Sales dot com.
Robert: That explains it beautifully.
Jeremy: There is a video of me looking significantly younger there. Wow.
Jesse: Isn’t it amazing how fast we age the older we get?
Jeremy: Jeeminy. Wow. I am thinner now. I am seeing the video, and I am younger. Okay.
Jesse: I was just looking at these numbers the other day because we were meeting with a client that said well, do homes even sell right? And actually, last year 775 homes sold last year from October 31st to December 31st.
Jeremy: 775 homes. Guys, that is a lot of real estate.
Jesse: Right. That is. A lot more than you would assume sells during Christmas and Thanksgiving.
Jeremy: It is a ton. That is one of the first big myths is that nobody is going to buy or sell during the holidays, and the reality is people are going to buy. What is going to happen is there is going to be a dramatic increase on January 2nd of homes hitting the market over December.
Jeremy: And every year it is marked. In this report that we are sharing from, we must slay the myths impacting real estate. 75% of folks believe that what is more affordable than owning? What do we think, guys? 75% of folks believe that what? What do you think out there, listeners? That what is more affordable than owning?
Robert: Probably renting.
Jeremy: Bingo. Okay.
Jesse: Living with Mom and Dad? That is what my kids think is cheaper.
Robert: Nailed it. Nailed it.
Jeremy: That is much worse.
Robert: Can I go backwards? Mom and Dad, if you are listening, let’s move back in.
Jeremy: Much more, much more affordable than renting. Well, emotionally it is not.
Robert: The emotional costs of living with your parents at 31.
Jeremy: What are they going to rank that? So 75% believe that renting is more affordable than owning. And here is a great question. Why? We about four minutes. Why?
Robert: Huge misunderstanding about mortgages and lending and a fear of going to a lender and putting yourself out there, telling essentially a stranger, giving them all, I actually think it is worse if you know the person, to give them all your financial data and say I am at your mercy. Please tell me what I can afford. Right?
Robert: That is a scary thing.
Robert: I think that is why Quicken Loans and those online mortgage companies do so well because there is such a fear that I do not want to go tell an actual human that I have blank amount of debt, and I only make X amount of money.
Jeremy: Correct. Correct.
Robert: In their mind they are going to lie to themselves and say ah, it is cheaper to rent. It is going to cost me too much to own a home, so I do not even want to deal with it.
Jeremy: Because it seems easier. Right? It just seems easier to go get a rental.
Jeremy: Yeah, I do not have to get a mortgage. I do not have to buy it. I do not have to be locked into it.
Robert: And I do not have to maintain it. Right? Somebody else. I have got a broken door handle, and I just put a work order in and it gets fixed.
Jeremy: So this is some interesting data. Below that, Trulia dot com, lots of you out there have been to Trulia dot come or Zillow dot com. They are kind of a sister company. 26% cheaper owning a home was 26% cheaper in 2018 according to Trulia’s data than renting a home.
Robert: That is wild.
Robert: That is a leading indicator as to rent is going up, too. Right?
Robert: If I am an investor, I look at that number. Hmmm, I am going to raise my rent. Why not?
Jeremy: It is not even a question. Yeah, it is not even a question. What I want to invite people to do is, as we wrap up our show today, I want you to visit December Home Sales dot com. It is kind of fun and check out what we are talking about there. Understand that if you are thinking about selling a home, it is okay to put your home on the market. We are about to put three or four beautiful homes on the market. We have photography tomorrow. An incredible walkout basement in Bloomington. And we have photography being shot on a lovely all-brick in Bloomington Hills, and Sun River next week. We have things going on here. So visit December Home Sales dot com. December Home Sales dot com. Fannie Mae and Freddie Mac in an earlier slide that we did not talk about –
Robert: You know what? You should probably share this.
Jeremy: Price increases.
Robert: Share this report.
Jeremy: Yeah, we can share the whole report.
Robert: Come to our Facebook page, and you can go over this whole report. There are 80-something pages. What is this, Jeremy? 80 pages or something like that.
Jeremy: This one is shorter, but yeah, it is long.
Robert: It is long. It has got tons of information.
Jeremy: Right. So the reality is, gang, it is cheaper to own a home than rent one. It just is. It is easier to own a home than you think it is. There will be people buying and selling homes in the month of December, and at the beginning of the month in January there will be a massive increase in listings hitting the market. You need to know that. If you would like to get a pie, so what we want you to do, Jesse, posted it. Come pick up a pie.
Jesse: I did.
Jeremy: That is, Drew, you are right. Homeowning is life-changing. Homeownership is. We will go ahead and we will throw a link in there to the report that we went over today. But Jesse posted a link to our Larkin Group Pie Day. It is Tuesday from 4-6pm, and if you visit, what is the site? Where do we want them to go? I cannot remember.
Jesse: Send them to St. George Home Searching dot com forward slash, actually, if you go to there, it is right up there –
Robert: Yeah, it is up at the top. It says Claim your pie. Don’t be shy. Claim your pie.
Jeremy: So visit St. George Home Searching dot com. That is St. George Home Searching dot com, and you will see the pie link, and we hope you will come pick one up free of charge. Tuesday. Over and out.
Mike: There you have it. As always for more information, you can give them a call at 275-1690 or find them online at Sold in St. George dot com. This has been St. George Real Estate Morning Drive with the voice of St. George Real Estate Jeremy Larkin on News Radio 94.9, 890 KDXU.
The SINGLE MOST IMPORTANT MESSAGE About The Real Estate Market (St. George Real Estate Morning Drive Radio Show)
Mike: KDXU News Time. It is 8:36 of the news time morning news, and welcome. Glad to have you with us. Thursday morning. And of course, that means it is time one again for another edition of the St. George Real Estate Morning Drive with the voice of St. George Real Estate Jeremy Larkin.
Jeremy: Good morning, ladies and gentlemen, girls, boys, real estate fans. I can definitely declare that I am going to be stopping at Daylight Donuts on my way by this morning. I just had that inspiration coming up Bluff Street.
Jesse: Then you have got to do it then.
Jeremy: I know. I realize it may not be the best choice. We will see. Let’s see how I feel in 24 minutes. We will see how I feel then. It is a wonderful day. I have got Jesse Poll, Jesse Poll in studio with me.
Jesse: You can call me whatever you want.
Jeremy: Yeah, I have got JC, my good friend, here. Good morning to all of our lovely listeners and Facebook friends and fans and people. It is going to be a great day, and part of the reason we know that is if you look outside you can actually see, hair in my eye here, sorry. You can actually see downtown. I can see all the way. You can see a big old shower coming down the way and some sun rays coming through them.
Jesse: It is nice.
Jeremy: It is incredible. The famed, famed Larkin Group Fall and Dixie photo that has just been going around for forever and ever and ever, we actually have a client. Remember Quuntin and Mori Jensen? Did you, you did not know them.
Jesse: I did not know them.
Jeremy: So they are moving back from Virginia and how I noticed that on Facebook the other day is that they had posted this photo, and if our listeners do not know what this photo is I guess I can throw this into the feed this morning. But it is a picture we had taken in 2009 by Danny Lee. Danny is a really great professional photographer here in town and did just a ton of work for us for a lot of years. Larry Gardner, a little back story. So this is going to be fun this morning, excuse me, but I am. So Larry is a friend. I grew up in the neighborhood that he was one of the dads. Right? So his kids are my friends.
Jeremy: And then he was my boss. One of my bosses. He is a City councilman and a really well-known guy, and so he took a photo of this shot. And the shot is you drive up Airport Hill. Okay? What they call it. Right? Just to the top, almost to the old airport, which is now where the Cliffside Restaurant is, and he took this photo. And it was probably 2004 of downtown and it was just in this epic color, and it was right after a rainstorm and everything was clear, and the color was really vibrant. Well, it was not a professional photo. It was a good photo, and years later, it was November. It was good, and we used it in our marketing, but it had some power lines running through it.
Jeremy: And then years later on a November day, I called Danny and I said what are you doing? Well, I am in St. George. I just shot a home, photographed a home. Well, could you go up to Airport Hill in like 10 minutes? He said yeah. He went up to the hill and 15 minutes later we had this photo, and it has been featured on more Facebook pages and yard sale pages. When I saw the Jensens, now segueing back, I knew they were moving back from Virginia because what photo did they post to say guess what everyone, we are moving back to St. George.
Jesse: I am going to tell on myself for a second here. I do not even know if you know this, but did you know that I stole that idea before we met? For my sign.
Jesse: I went up to my friend’s house –
Jeremy: I remember. I remember.
Jesse: But it was my photo.
Jeremy: We disapproved. We saw.
Jesse: I did not even know it was you.
Jeremy: Oh, it was us.
Jesse: I saw this sign and I am like wow, that is gorgeous. How could I get one like that? So I went up to my friend’s house with my phone and took it.
Jeremy: Oh, I remember. I remember, Jesse. We knew you before you knew us.
Jesse: And do you know where those signs are now?
Jeremy: In the garbage?
Jesse: No, my sister-in-law painted them. We have this, the next time you come to my house you will see it. It says the cottage. This beautiful sign.
Jeremy: I did not know this.
Jesse: I have not hung it yet because we were still working on it.
Jeremy: Oh, that is classic.
Jesse: But she painted them all. For each, she did one for everybody’s house.
Jeremy: I am glad you came to work for us instead of –
Jeremy: — instead of competing.
Jesse: Right. Competing with the sign. Mine still was not as pretty though because it was reflective, and it is in the details. Right?
Jeremy: The devil is in the details. Hope we have got some friends watching. Comment and say hello if you are watching this morning and let us know that you are out, and you are listening. So I want to share with you guys something that is going on. That is the background. And we will share that. We will actually throw that photo on the Larkin Group Facebook page this morning.
Jesse: It is a nice photo. It is so nice people try to steal it.
Jeremy: Yeah, it has been on postcards. There are some jerks around town that thought they could take our photo. That is the situation, guys. It could be worse. By the way, if you are lamenting that it is cool or not, it is just not early Fall anymore, you could have snow. And it is snowing all over the place.
Jesse: And they do have snow in Cedar City. My wife called me last night on her way back from work and said it is snowing.
Jeremy: Woo, buddy. We do not want that. We do not want that. Today, we are going to share with you, just so you know, as we get the show rolling, we are going to share with you what I believe is really the most important, single most important message that you can receive in real estate. And when I say most important message, I mean in any market. And when I say any market, Jesse, what I mean is any city. Okay?
Jeremy: And in any market condition. Right? Whether the market is going, generally the public understands real estate as the market is either going up or it is going down.
Jeremy: That is kind of how that works. Well, is the market going up or is the market going down? We are going to share with you the single most important message that you could possibly have in real estate. There is nothing more important to you as a buyer or a seller than this message that we are going to share today. Okay? Which is something more than Happy Holidays. Is that fair enough for you?
Jesse: Oh, happy days.
Jeremy: This truly is something that is important. So I wanted to share something that is kind of fascinating.
Jesse: That was for Jessica Marron, by the way. Her and I –
Jeremy: Good morning, Jessica.
Jesse: You never know when either of us is going to start singing —
Jesse: — or dancing.
Jeremy: That is exactly right.
Jesse: She is my kindred spirit.
Jeremy: I think she is a lot of people’s kindred spirit. Good morning to her. Gang, if you are a skier or a snowboarder, Bryant Head Resort, I was just mentioning when the live feed started, and we were just kind of in here getting mic’ed up, Bryant Head is getting some snow. Finally, getting some snow. They opened last weekend. I never miss opening day ever.
Jesse: And you did.
Jeremy: Two weekends ago. I absolutely missed opening day. They opened actually the weekend before Thanksgiving, and then I missed the weekend after. It is looking like I will miss this weekend as well. So this is pretty rarified stuff for me, but it is what it is. If you go to Bryant Head dot com, it is fun. They have three live webcams and I watching it right now in studio, panning left and right, and it is dark, and it is overcast still a little bit up there. Lights are on. It is really cool because the storm has set in up there. So check that out. Skiers and snowboarders, we are really only an hour, it is an hour and a half if it were a snowy day and you were taking it easy. I do not tend to take it very easy when I travel to Bryant Head. I am usually in a hurry. I call it 75 minutes for sure coming back and usually about 80 going up. So Bryant Head dot com. I hope that everyone has got their skis shined up, grab a stick of Juicy Fruit. Remember those ads? I do. I remember those ads very, very —
Jesse: Juice Fruit.
Jeremy: — yep, very distinctly, and these people were skiing over in Colorado. That was a good time. All right, let’s talk about real estate, shall we?
Jesse: Let’s do it.
Jeremy: Jesse, I had this crazy, last night I was playing around, and I am absolutely not going to mention the homeowner’s name. But I saw a property that was in Stonecliff that was on the market. And when I looked at the property, this is kind of interesting. So, this home has been listed one, two, three –
Jesse: Two, three, four, five, six —
Jeremy: — four, five, six, seven, eight, nine, ten, eleven, twelve times.
Jeremy: So there is a property that has been on the market twelve times, and that is with a variety of real estate agents, starting in 2008, it is now 2018. So for a decade, literally for a decade, and if I count up the days, two, three, four, the home has legitimately been on the market probably 1500 days over the last decade in Stonecliff. For our listeners out there, if you have not sold a home, this is so mind-boggling if you are the homeowner. Right? Because you start to say what is possible, and I see the price started at one point, I am just going to say six. The price started at $1.6 million, and it has come down a third of that, and down below that, and then it has come back up. Here is the challenge. When we have a market that has appreciated for the last six years but your price has come down a third over the last ten years, this does not make sense. Right? So all of the home values in Washington County have gone up an average, an average of about $125,000, 130 since April 2013. Or just 2013. Maybe it was April. Home values are up $125,000, 130 maybe in Washington County since 2013. That is the average home. Home values as a percentage are up 25-30%, maybe even more, maybe even 35% in certain neighborhoods. But here is a home that a really good human being has tried to sell. A homeowner, and they have actually reduced their price by 30% over the same time period. Jesse, what does that mean? Because that does not make sense with the market. It means something very simple for us.
Jesse: Well, it just means that they are not, they are trying to get what they want instead of what the market will bring.
Jesse: Because even, I am going to go somewhere you are not even expecting. But even in those price ranges –
Jeremy: Oh, I do not know. You are pretty unexpected.
Jesse: — even over a million dollars, the homes that are selling are selling within, at the highest, 154 days, oh no, 207 days –
Jesse: — is the highest days on market. So they are still selling when they sell.
Jeremy: It is just taking longer.
Jesse: It takes a little bit longer. Not significantly. Not 1500.
Jeremy: Yeah, so 1500 days, as we get into this and we are going to share this message. What we believe is the single most important message about any real estate market for buyers and sellers and would-be buyers and sellers. But I think this is a great segue for us. You have someone, as Jesse said, has been trying to ask significantly more than the market will bear.
Jeremy: So here is what is going on in the real estate market today before we set this up. Well, let’s just share it. You guys ready? Three, two, one. Real estate markets in every city in the United States of America and probably on the planet are cyclical, and this is the single most important message that you can possibly understand about real estate. It is not is it a good time to buy. It is not is it a good time to sell. Should I rent or buy? Right? Should I purchase an investment property? The single most important message is that real estate markets are cyclical, which means what?
Jesse: That what goes up must come down.
Jesse: And what goes down must come up or will come up.
Jesse: It is an equilibrium, and in any equilibrium, it has to go up and down to equalize.
Jeremy: I have a very close friend who two days ago, 48 hours ago, we are not even at 48 right now. I think we are at 35 hours ago. He was like I guess things are just not going to work out in my life, and two hours later, everything changed. In a very positive way, and the way I described it is the clouds parted and the sun broke through. Go figure, and I said this morning, do you realize that was two days ago? Two days ago, you were everything is going to pieces.
Jesse: That is why we need to keep reminding ourselves that this will pass. This too shall pass.
Jeremy: Which makes it sounds like we are talking about a bad real estate market. We are not at all. This is an amazing real estate market, but we are going to help you understand what is going on in the real estate market. So if we go back ten years, it was 2008. Literally, people thought, people meaning just generally everyone, it seemed like the clouds could never part, and that the real estate market would forever be in freefall and gang, understand that almost all of the major developers in the western United States lost everything.
Jeremy: This was not like –
Jesse: I was just talking to a roofer last night. Actually, Stout Roofing is going to do my roof, and we were talking about the crash. What they went through and what they have pulled through, it is just amazing. We are talking about $600,000 of accounts receivable that they could not collect on.
Jeremy: Are you serious?
Jesse: And they pulled through that. It gave me goosebumps for a guy to stand in front of me that came through that and now they are getting ready to do my roof and they are going strong.
Jeremy: Isn’t that amazing?
Jesse: Yeah, it was really cool because how many did not come back.
Jeremy: Right. The amazing part is we have projects in Washington County that were 30 to 40 to $50 million value projects that just went belly up. They went upside down. Anyone who can remember ten years ago, if you went up to the Ledges, so the Ledges actually came, well it was a little later. The Ledges came out of the ground. It was 2007, Parade of Homes 2007 is when the Ledges came online. This is fun. The average person does not know this because why would you know this? You do not do this for a living. But it is 2007, and they have opened at the Parade of Homes, and they had this big, incredible Spanish-style property that many folks do know of. It was the first big home in the Ledges. It has a lazy river and an island green in the backyard where you can chip balls onto the green. It overlooks Snow Canyon, and that thing came on the market. It was $5 million, by the way. They had all these tents set up, and the sky was the limit, and they sold all the lots up there to a variety of builders. They came in and these guys thought they could do no wrong, and gals, to be fair. By 2010, you would drive down past the clubhouse, and there was a row of unfinished homes right there. Probably a dozen homes, framed, some of them had, what do you want to call it? Paper, what do we call it the paper? My brain is fried for a minute. On the outside, getting ready to stucco and they sat for years.
Jesse: The vapor barriers.
Jeremy: The vapor barrier. Years, and years and years. My uncle came into town from Southern California. He is a developer and he said oh my gosh. This is bad. That was, guys, that was eight years ago. That part. So now go to the Ledges. Now look around St. George. I am looking behind me at the Bluff Street redevelopment project. So what we need to understand is that every real estate market is cyclical. And so, Jesse, what are we starting to see in the market. We are having a lot of real estate agents reach out to us and say what is happening with their listing that they are trying to sell for a client.
Jesse: Well, what is happening is there are a couple of things. We are seeing a lot of pressure like sellers are having to reduce their prices finally.
Jeremy: There you go.
Jesse: Buyers are stopping. They are like no, we are not going to do this anymore.
Jesse: You are having to have a strategy to actually sell a home. What are we going to do? How are we going to be the best value?
Jeremy: So very specifically, sellers are having to reduce their price.
Jesse: They are.
Jeremy: Does that mean the home values are going down?
Jesse: Not necessarily.
Jeremy: Not necessarily.
Jesse: They do not go down like that. It is kind of like a train does not stop in 100 feet. It takes a minute.
Jeremy: It takes a while.
Jesse: But there is starting to be some pressure.
Jeremy: There is.
Jesse: And it is visible pressure like homes that 30 days ago or 60 days ago would have sold in two days are taking maybe three or four weeks.
Jeremy: This is absolutely right. We are seeing a ton of pressure in the $4-500,000 range, and what starts to happen is because real estate markets are cyclical, and the reason this is the most important message is that people will start to panic and the market is so driven by the emotional conditions that people live in that what will happen is you will have a whole bunch of buyers who are frustrated and they are fed up, sick and tired of writing offers on homes and competing with five people. So they start saying well, maybe I will not write anymore offers. They are fed up with paying 10% more than the last person paid in the neighborhood. So they say well, maybe we will not pay 10% more than the last person. They are frustrated because interest rates are amazing at five-and-a-quarter percent, but they remember when they were four-and-a-quarter percent. So they say maybe I just will not borrow money, and I will not buy a home. And what starts to happen is very subtly, slowly, then suddenly, the entire market can change. And it is changing.
Jesse: What is interesting is that, Guild Mortgage put out an interest rates over the last, I do not know, 40 years, yesterday, it is a picture. But for the last, gosh, 15 years, interest rates have just kept going down. And we lose track of our memory. Right? We do not think well, this is cyclical. And we do not stop long enough and –
Jeremy: Excuse me, what were you saying?
Jesse: It is cyclical.
Jeremy: You said we lose track of our memory. I was going to see if you were paying attention. Okay.
Jesse: But we do not realize that what goes down is going to come back up. And what is that going to do to us if we do not act now or if we do act now.
Jeremy: We do forget, and here is what we start to do. We make decisions on buying and selling a home that are based on well, rates went up, maybe I should not buy. Here is the issue gang. Historically, rates were significantly higher than this. I remember when I was at 7% on a townhome, and I thought it was the greatest thing ever.
Jeremy: When it went to 5.8, 6%, I really thought that my wildest dreams had come true. And then they went to 3%. Well now they are back to five-and-a-quarter percent, and they will go higher. So there will be people who will look back at this market and go oh my gosh –
Jesse: I wish I would have.
Jeremy: — I cannot believe I did not buy a home. Okay? We are going to have sellers –
Jesse: Or make that move.
Jeremy: Correct. Right? We are going to have sellers who are going to find out that people are reducing prices in their neighborhood, which is going to imply to them and cause this idea that maybe values are going down. Maybe this is not a good time to sell.
Jeremy: Historically, ladies and gentlemen, do you realize that values are literally back where they were at the ’06 peak. We are actually back there. We are right back where we were. Let me share something with you. Southern Utah Title produces a really great report that we were looking at this morning, Jess, right?
Jeremy: And by the way, you can visit SUTC, S as in Sam not F as in Frank. S as in Sam. SUTC dot com, Southern Utah Title Company. Thank you, Mitch, for your help this morning. Southern Utah Title Company, they produce this incredible report called the Good News Report. Let me share something with folks. In 2009, there were 474 building permits pulled.
Jeremy: In 2009, 474 building permits. Do we know how many building permits were pulled so far this year, Jesse?
Jeremy: Projected at how many more?
Jeremy: So we are projected to have 2400 building permits pulled. That is five times as many building permits as were pulled in 2009. Okay? And it looked like this. 2005, four years prior, now brace yourselves, folks, and we have talked about this in the show, but I would not expect someone to remember this. 3500.
Jeremy: We went from 3,500 building permits pulled in 2005. The low was 474. Nine times, a nine-time crash. Nine times fewer.
Jeremy: Right? We went from 3,500 building permits in Washington County to 474. Last year, we pulled 1800, and this year we are at 1800 and the year is not out.
Jesse: And end at 2400.
Jeremy: Let me be really clear. This is September. But we are headed to 2400 permits. Is real estate cyclical? Real estate is cyclical. Is the market crashing because people need to reduce the price? No what it means is, and what we have talked about on the show is pretty much everyone is asking probably 5-10% more than what the market is really going to bare.
Jeremy: (Indiscernible) the sellers.
Jesse: The pricing conversation is a lot different when you are in a really strong sellers’ market than when you are in a buyers’ market or just a balanced market.
Jesse: And really, we are just going back towards a balanced market.
Jeremy: Yeah, correct. This is so true. We are headed back to a healthy, balanced market.
Jesse: Because there is a day when three months was normal to sell a house.
Jesse: Sixty, ninety days. That is normal. This sell your house in a week is not normal or sustainable.
Jeremy: It is not. Right? We have used this so many times, but it is like when In-and-Out Burger opened over there by Best Buy, it has been a long time now. There was a line around the building for four days.
Jesse: That is crazy.
Jeremy: Well, it is an unsustainable pace. No restaurant has a line around the building for 365 days a year and it lasted about four days and it was done. And there is a nice line out there now on a busy lunch, but they push them through.
Jeremy: Here is another thought. Okay? That was building permits. How about total sales? In 2009, 3,900 properties sold in Washington County. 3,900 properties. We are projected this year to have almost 10,000 properties sell in Washington County. Now this is all sales, and so when we say all sales, and again you can visit S as in Sam, UTC dot com and look at the Good News Report. All sales means building lots, homes, condos, townhomes, that kind of thing. Right? So folks, look, the market is absolutely incredible. The market is cyclical. Let me share one last thought with you. We virtually have no foreclosures in Washington County right now.
Jeremy: We are talking about, folks, let me give you some perspective. We are talking about almost zero, virtually none in Washington County.
Jesse: Out of how many active listings? 1400?
Jeremy: 1500 homes on the market. Well, how many homes are in the county? 10,000?
Jeremy: More. I do not know how many. That is a number we need to get.
Jesse: How many homes are actually built?
Jeremy: Yeah, yeah, properties.
Jesse: I will work on that.
Jeremy: Thank you. There are virtually no foreclosures. Real estate is cyclical. A decade ago, we know for a fact, I know because I was selling homes that I was handling at one point, the Larkin Group, we were handling over 70 foreclosed or soon-to-be foreclosed properties.
Jeremy: Just us. Guys, the most important message that you can ever receive about real estate is that it is cyclical. Markets go up and they go down. This will be a time that people regret not selling because values are high, and they will have been high, and it is a time that people, this is ironic because it does not always work this way, will have regretted not buying because rates will go up another point.
Jesse: I think that is a big piece.
Jeremy: And they will be ticked. It is a strange and actually amazing time in real estate. Headed back to a balanced market.
Mike: You are listening to the St. George Real Estate Morning Drive with the voice of St. George Real Estate Jeremy Larkin. For more detail and information, call 275-1690 or find them online at Sold in St. George dot com.
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