Below is the actual St. 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. It is a Thursday. Good morning and welcome. It is also time for another edition of the St. George Real Estate Morning Drive. We welcome in the voice of St. George Real Estate. Here is Jeremy Larkin.
Jeremy: Thank you, Mike. And Robert is offended that you did not say voices.
Mike: The voices of St. George Real Estate –
Jeremy: Thank you.
Robert: I am not at all.
Mike: How about if I say Robert and Jeremy. Now Jeremy is mad.
Jeremy: Robert J. DeBry. I mean MacFarlane.
Robert: Robert J. DeBry and Associates.
Jeremy: I had the resume and I thought it said Robert J. DeBry, and I am like he is interviewing for a real estate position?
Robert: Because I am Robert J.
Jeremy: But then I looked again, and it was just Robert J. MacFarlane.
Robert: Just. Not bad though.
Jeremy: I will take it. Very good morning. Here is a fun trivia for you this morning because it is a beautiful January day in St. George, Utah. I was driving my child over to la escuela, as they say in Latino America. You guys understand, right? This school. Robert, I think you understood.
Robert: Oh, okay. Got it. That was a tough one for me.
Jeremy: I want to make sure. We are going to do a little Spanish course today. So I am headed over to Tonaquint Intermediate School and we pass Southgate Golf Course. I said, Matt, look at the golf course. And it was covered in frost.
Jeremy: It looked like snow.
Robert: Frosty white.
Jeremy: Yeah, it looked like snow. He said man, that is the whitest I have ever seen it besides when it snowed. And I helped him understand. Gang, if you are not a golfer, do you realize, so do you know what the rule is with the frost in the morning?
Robert: I do not.
Jeremy: So they will not, Southgate Golf Club, by the way, is owned by the City of St. George. Golf Club, golf course. I think club is a little liberal. They will not let players out until the frost is off. And really the frost only has to be off on the first hole because once it is off on the first hole they send them out, and then of course, the sun is going to hit everywhere else. But that is the deal. So this morning, the second that sun hits that fairway or that first hole and green, then they will send people out.
Jeremy: You did not know that?
Robert: I did not know that. I am not quite as much of a golfer as I probably should be.
Jeremy: Should be. I have news for everybody. You do not need to be a golfer to be in real estate. People think that real estate agents just play golf and have lunch with friends.
Robert: Yep, I think that is it. Right?
Jeremy: I do not play much golf, and I really do not have lunch often with friends. I have lunch occasionally with clients. But I am going to get out tomorrow. So headed out, thank you to my brother-in-law. He has got free golf at Sand Hollow. Sand Hollow was just, if you guys did not see this, there was an incredible article in Golf Digest talking about, it was a feature on Sand Hollow Golf Course out there in Hurricane, out there near, Hurricane, Utah, near Sand Hollow, what do you want to call it? Reservoir.
Robert: That is what it is called. Lake.
Jeremy: Yeah, so very cool. And I will have the opportunity tomorrow afternoon to go out with these guys with my father, and it is going to be a great time. But work must be done, and we have got to sell some real estate first, don’t we?
Robert: We have to. It is not an option.
Jeremy: It is not an option. It is not an option. Gang, if you are watching us on Facebook Live, say hi. Shoot out some hearts or a thumbs up or let us know that you are there, or if you have got questions for us, we are on, this fun.
Robert: We are on three.
Jeremy: We are on three phones.
Robert: We are on three. I have got Facebook Live on mine. We have got Jeremy’s Facebook Live.
Jeremy: And YouTube Live.
Robert: YouTube, YouTube Live.
Jeremy: How do you like that?
Robert: It is a new age.
Jeremy: And, of course, we are on the radio, which you are listening to.
Robert: Thanks, Mike, appreciate that.
Jeremy: Thank you, Mike. Incredible. So check this out. If you are a YouTuber, and some folks will say yeah, I do not do Facebook Live, YouTube dot come slash Go St. George TV. G-O-S-T George TV. YouTube dot come slash Go St. George TV, and you will see us broadcasting live. Robert is running live and I am running live on Facebook.
Robert: Why not?
Jeremy: It is wild. It is wild. 94.9FM, 890AM. We are going to talk about something really cool today. So Robert is with me. Robert has been in my organization now for, pushing three years?
Robert: Pushing four.
Jeremy: Pushing four. Thank you. Jesse is over that hump. So Robert is with us. He is, I talk to him on Facebook. He is a, I actually think he is a home-pricing and home-selling expert and has been part of us now selling, I think we are at like almost 1200 homes.
Robert: I do, too.
Jeremy: That is a lot. Folks, that is a lot of properties. The average homeowner buys or sells every seven years, and of course, once they are an adult, then they are in the home.
Jeremy: It does not start at age zero.
Robert: Yeah. You know you have been selling real estate a long time when you actually, you see a home hit the market, and you are like that home looks familiar. And then you realize oh, that is because five years ago I sold that house.
Jeremy: We sold that. Yeah. It is fun, and I love to drive around and do that. And of course, I always tell my kids I sold that. I sold that. I sold that. I sold that. So it has been an interesting ride, and Robert is with us this morning, and we are going to be talking, so he really is. He is a home-pricing and home-selling expert. We are going to talk about the six pricing misconceptions that actually cost sellers money.
Robert: Is there only six?
Jeremy: There are a lot, but six is, man, I am telling you what.
Robert: It really boils down to these six.
Jeremy: Yeah, it boils down to these six, and it sounds like a lot. It is not a lot. It is really easy to digest, but this is a real issue right now because we have a lot of home owners, a lot of home sellers who are, they are aggravated right now. Why?
Robert: Mainly why because homes are sitting on the market. I was just sitting down with a client. Their home is actually for sale as a For Sale By Owner right up here on Bluff. And what happens a lot of times is for homes that were for sale by owner, they do not sell the home for a month –
Robert: — maybe two.
Robert: And then they reach out to a real estate agent and say hey, what am I doing wrong? So that is what ended up happening with this family over here on Bluff. And we sat down, and I noticed that in the $4-500,000 price range, the active homes on the market have been sitting there for an average of 102 days.
Jeremy: That is a long time.
Robert: That is an average, so some have been more. Obviously, some are less, but that is 106 homes sitting on the market for an average of 102 days. That is pretty –
Robert: That is not typical.
Jeremy: And here is the perspective for people. Last summer, most homes under $500,000, I am not going to give any specific other than under 500, they were sold in 30 days or less, and some folks, we have sold homes that I was thinking about, a home that we sold over on, the Jenkins home on Canara in Green Springs. Pseudo-luxury home, $480,000. We had multiple offers.
Jeremy: We had two buyers competing. We sold another one in Greens Springs in Silverstone. Two buyers competing at $650,000 for that home.
Robert: And I am sure we have home builders listening to the show –
Robert: — and I bet you more now than it has been in probably the last three years, spec homes have been sitting on the market.
Jeremy: Yeah, and it is going to freak people out.
Robert: They were not having to really do a whole ton of work trying to sell those before –
Jeremy: No, no, no.
Robert: — and now it is a different game. Just to kind of, it seems like overnight.
Jeremy: It is interesting. This is so subtle that it throws people off. And so we have a lot of home sellers who are frustrated, like man, I thought it was a good market.
Jeremy: And what we want to talk about are the six pricing misconceptions that cost you money, and also reiterate that it is a great market.
Robert: The best really.
Jeremy: It is an incredible market. The market that we were in for a little bit there was actually unsustainable and was akin to giving your kid the keys to your Corvette and telling them to drive 120 down the freeway indefinitely and assuming that nothing was ever going to go wrong.
Jeremy: Okay, at some point, okay –
Jeremy: — he is going to hit something.
Jeremy: And that is what our real estate market was doing. It was careening out of control. You cannot have homes sell that quickly. You cannot have, look we had appreciation in 2005, remember. 36%. We all remember how that turned out.
Robert: Yeah. And I think that is probably the biggest challenge I hear more than anything is well, in 2005, and they are always going back to this, now we are looking at 14 years ago.
Robert: Kids that were in diapers are now driving cars. Right?
Robert: That long ago. They are saying well, it was like this then. Why isn’t it like this now?
Robert: And the reality is we are looking at two different eras.
Robert: Completely different eras.
Jeremy: It is two different times. So it is fascinating because I mentioned a home in Green Springs at $650,000. It was sold for another radio personality who we have mentioned on air before with another firm in town, and he was delighted when I had two buyers competing against each other to buy his home.
Jeremy: The interesting part is that there was a 30-day period where the home was actually listed too high.
Jeremy: Let’s just find out what the market will bring. And the second, the second that price was brought in line, we are going to share with folks today, Robert, that you cannot what a home?
Robert: You cannot underprice a home.
Jeremy: Not even possible. But Robert, I do not want to give my home away.
Robert: Right, and I understand that. We all understand that. Nobody does.
Robert: Do you know anybody, Mike, can I have your house?
Jeremy: No. No.
Robert: He is not going (indiscernible)
Jeremy: But Robert, I do not want to leave money on the table.
Robert: And we understand that. That is a valid concern. Right? Nobody wants to leave money on the table.
Robert: So there is a strategy behind that.
Jeremy: And what we are saying is it is actually, this is incredible, I hope folks are listening who are selling right now, considering selling. Builders, you cannot underprice a home. It is actually not possible, and we are going to talk about why.
Robert: Right. Even in horrible markets, right, even in a full buyer’s market, which we are not in one, unless you are selling in the 600 and above, and really in some cases, depending on how unique the property is, that is not even a buyer’s market. Right? But for the most part, we are in a seller’s market from top to bottom.
Jeremy: We actually are.
Robert: So if you are in a seller’s market, what does that mean?
Jeremy: That means that the benefit, the advantages to the seller that there is a less supply, right, and the buyers are really hungry to gobble up the limited supply.
Robert: Yeah, it is the iPhone launch. Right? There are not as many iPhones on the market, but they are going to charge you $1200 and you are going to happily go pay that –
Robert: — which is not always true, and that cannot happen forever. Right?
Robert: I remember reading an article about Apple doing that, running into issues with that, and at the same time, because we are in that seller’s market, do you think Apple is like do you know what? I am really worried about selling this. Could I have asked $50 more?
Jeremy: Right. Right.
Robert: Am I leaving $50 on the table? No, they are not.
Jeremy: And this is so interesting. So let’s talk about this. Six pricing misconceptions. Okay. I am going to overview them. Is that fair enough?
Jeremy: So, Jeremy Larkin here. Host of the St. George Real Estate Morning Drive. And I want to share something. I do not say this to impress. It is to impress upon you, right? So 1200 homes is where we are at as a real estate group here in Washington County. If you can imagine that 25% of the contracts fall out, as a matter of fact, this last year, 19.6% of the contracts, contracts that buyers wrote on our listings, 19.6% fell apart.
Robert: For one reason or another.
Jeremy: Yeah, the appraisal came in low. The buyer got cold feet.
Robert: The inspection came back poorly.
Jeremy: The inspection came back poorly. They could not get financing. Right? Whatever. All right. 19.6%. So for us to sell 1200 homes, we actually had to sell, to put on the market, we had to deal with 120%.
Jeremy: But the reality is it was not because we probably spoke to 250 or 300% as many clients –
Robert: To get those.
Jeremy: — to get to there. Okay. So understand, folks, that we have literally had thousands, this is where the –
Jeremy: I am even baffled saying this out loud. We have actually had tens of thousands of real estate conversations. Tens of thousands of conversations with buyers and sellers. Okay. So, it just gives some credibility to what we are talking about here. These scenarios never change. It does not matter whether you are in Cincinnati or Miami, Florida or St. George, Utah, these are realities. Okay. Six pricing misconceptions. Your home is not worth what you paid.
Jeremy: Well, it could be, but it is not worth what you need. But Robert, I need 450.
Robert: We all need a million dollars. Right?
Jeremy: It is not worth what you want.
Jeremy: It is not worth what your neighbor says.
Robert: I disagree with you there. My neighbor, he knows a lot about real estate.
Jeremy: I know.
Robert: He has sold two or three homes.
Jeremy: He has sold two or three homes and he drives for Andrus Trucking, but he is a real estate expert. It is not worth what your neighbor says. It is not worth what another agent no matter how bad they want to get your business –
Jeremy: And it is not even worth what it costs to rebuild.
Robert: I think it is interesting. You say it is not what another agent says. That includes yours truly.
Jeremy: Right. Right because do we determine the value of a home?
Robert: Absolutely not.
Jeremy: Absolutely not. So we do not make the market. We just interpret the market. So if Robert goes out or myself or one of our team and you hire us to sell your home, we do not make the market. We do not come in and say well, I think it is actually worth 425. We may say that based on all the data and that is what we do, but we do not make the market.
Jeremy: In every market, for every product, who determines value, Robert?
Robert: The buyer. That is a t-shirt. That is a cell phone. That is a car.
Jeremy: Yes, everything.
Robert: It does not matter. A burger.
Jeremy: Yep. Buyers determine value.
Robert: Always. That is the free market.
Jeremy: The greatest example on the whole planet right now, at least I think it is the greatest example, I am a Disneyland fan. And I heard 30 days ago they raised their prices again.
Jeremy: And it came across Facebook or something and I saw one of these blogs that is like a Disney insider’s blog. And what they said is does not matter. It is not deterring anyone. Right?
Robert: Netflix is another example.
Jeremy: Oh my gosh, right.
Robert: They raised the price of Netflix. They did a survey. How many people are going to stop using Netflix? 76% said that it was not going to phase them at all. Of the remaining piece, only 3% said they would probably stop watching Netflix. 3% and they raised it like, I think it was like, they raised it like $5 or something like that for the top plan.
Jeremy: Right. Right. So buyers determine value. And here is the point. You may say well wait, if Netflix and Disney are raising their prices, I can, too. No, what we are saying is the market is determining value.
Jeremy: So today, they said it is $190 to buy a one-day hopper to Disney (indiscernible)
Robert: I have got a sidebar.
Jeremy: Good grief.
Robert: My sister she lives up in Salt Lake. Her and her family, it has been ten years since they have been to Disneyland.
Robert: They just went this last week. She has got a sweet picture of the whole family all of them wearing fanny packs like it is 1980.
Jeremy: Everything is just regurgitated.
Robert: Isn’t it so funny?
Jeremy: It is 1980 again.
Robert: It is so funny, man.
Jeremy: It is Marty McFly. Right? 1985.
Robert: They were the best fanny packs. Good strong, there are six of them, all with fanny packs.
Jeremy: You know what? I think the next time I am going back I am wearing a fanny pack.
Robert: You should rock it, man.
Jeremy: And you realize they spent thousands on tickets.
Robert: They did.
Jeremy: And it is not going to deter people. So until Disney raises their price to a level that the market says oooo, now that is out of range. Right? Here is another thing. So folks, one of the challenges we have is that how many Disneylands are there? There are about a half dozen.
Jeremy: There is Disneyland, Disney World, Tokyo, Paris, are there six? Are there two more that I do not remember. Okay. Maybe that is it.
Robert: Asking the wrong guy.
Jeremy: Okay. How many homes are hitting the market every month right now in Washington County?
Robert: About 300.
Jeremy: Another three, and by the way, as many as six in a big month.
Robert: Oh yeah.
Jeremy: Three to six hundred homes –
Robert: Like the one we are coming up to. Right.
Jeremy: Right. We are in the biggest month right now. See the difference is, folks, we are not Disneyland. These are homes, and even though you love your home, and I know that you, I realize how much time you spent on the custom cabinets and the custom closet inserts, and that was important to you. Right? You put those in for your enjoyment. And Robert, did you enjoy them?
Robert: Oh, absolutely.
Jeremy: Right. Did you put them in for the next buyer to use?
Robert: No. Actually, I did not.
Jeremy: Probably no, but I read an article on home improvement and it said –
Robert: Zillow told me that I could get a $15,000 return if I remodeled my bathroom.
Jeremy: Right. So the reality is buyers will always, yeah, buyers will always determine the value. So as we walk through this. What you paid. If you paid for your home an exorbitant amount in 2005, understand that values fell in Washington County 46% since 2005, 2006, and they have come back, that was between 2006 and 11, and they have come back 42%.
Jeremy: Overall. So we have almost gained back every bit of what we lost. But do you realize it took us five years to lose it and another almost six years to get it back? Almost seven years to get it back. So if you followed that, in 2005, values were really high. In 2011, values were really low. In 2018, values are really high, and now it is 2019. Where can we only predict that values can realistically be in the next few years? Not higher.
Robert: Or, if so, we had to weather going down to come back up eventually.
Jeremy: Right. So for our home sellers right now, what I want to articulate is there are six pricing misconceptions and when you put your home on the market at a price well, I paid this, well I need this, well I want this, well my neighbor said this, well an agent told me, well do you know what it would cost me to rebuild this day? None of it has any bearing on what your home is worth. What your home will be worth is what a reasonable buyer with funds available and the initiative to move into your home will pay in today’s market. And what I am trying to, want to make sure that we convey is that even though, even though right now, Robert, a whole bunch of your clients, my clients, in the area are frustrated saying but I thought I could sell for blank. They need to understand that the price that they need to be at, which is probably 5% lower is an amazing price.
Jeremy: Is an amazing price.
Robert: It is all perspective. It is all about perspective.
Jeremy: If someone had told them in 2011, if someone had told these people in 2011 when I was selling Hidden Valley townhomes for Fannie Mae and Freddie Mac and HUD, government foreclosures for $85,000 –
Jeremy: What is Hidden Valley at right now? 170?
Robert: Maybe a little more.
Jeremy: If someone had told somebody in 2011, hey you know your Hidden Valley townhome that you have to sell for 85 right now? It is going to go back to 170 or 80 thousand dollars, it is going to double in value by 2018. Would have kissed me on my face if they could have had the old almanac. You know the almanac from Back to the Future.
Robert: Back to the Future.
Jeremy: If I could have predicted that, would you have been very happy with me?
Robert: Biff, I would be so happy.
Jeremy: I know you would. So it is all perspective. So even though, and the most important two words of today’s show are even though. Even though you feel frustrated today that the market will not bring quite what you want, you need to realize that the market is bringing you the, this is one of the highest price points in the history of American housing today. And what is going to have to happen is this. You are going to have to amend that price mostly as folks are. And here is the challenge. Robert, if I know you are a baseball player, and a few other sports.
Robert: Go Yankees.
Jeremy: Yeah, go Yankees. Hand-to-hand combat. I actually watched you do hand-to-hand combat that day with Creed. When the ball –
Robert: I won.
Jeremy: Yeah, when the ball, you kind of did. When the ball goes away from the field and it is rolling down a slope away from you, what is the only way to get to the ball?
Robert: You have to get in front of it.
Jeremy: Yes. So, folks, envision. You are a kid. You are chasing a ball. It is rolling down a hill, and you are lunging. Right? You are lunging.
Robert: Trying to stand. Keep standing. Try not to fall.
Jeremy: Tearing your hip flexor. The only way to stop the ball is to get in front. And so, if folks want to actually capture the highest price for their home it is important that they get in front of the ball and not be chasing the ball. And right now, we have sellers who are chasing the ball. And in six months, they are going to look back and say what?
Robert: Man, I probably just should have just made the move six months ago.
Jeremy: Yeah. But I was so convinced that I needed that extra 5%. Right? Why is it impossible to underprice a home?
Robert: Well, I think there are a couple of reasons, but the main reason why is because one you hit that price where all of the buyers know that truly there is value, because it is value. It is just like going down the street and hey milk is $3 a gallon at Smith’s –
Jeremy: Got it.
Robert: — and it is $3.50 at Albertson’s, I will drive across town to save that fifty cents. Right? I will do whatever it takes to get the cheaper value or the value I see that is actually there. So if I price it to a spot to where I know multiple buyers are in it, I am not going to wait. I am going to worry about the fact that somebody else is going to get it if I do not, and so I am going to pay 100% of what they are asking because I do not want to lose it.
Jeremy: Do you think this is true even for the luxury, the high-end market? Let’s talk to our luxury listeners right now.
Robert: Oh, absolutely. I think the luxury in this, specifically in this town, our high-end clients, the people that own second homes here or have retired here and put their nest egg in a beautiful home because we get probably some of the most amazing homes for the best value in my opinion.
Jeremy: We sure do.
Robert: In this town.
Jeremy: We sure do. We have folks come out of California and go wait a minute. $1 million for this? This was three back home.
Robert: Exactly. It is unbelievable. The biggest mistake I see happen is realtors tell them it is worth more than it really is, and the list to sales price of luxury homes is significantly different than it is even at the six, five and six hundred thousand. At 500,000, they are getting 99.9% of their asking price. At a million dollars, they are getting 92% of their asking price.
Jeremy: Good grief. You sold, okay, this is fun, I looked at this. You sold the most expensive home in Bloomington. It is the highest sale I have seen in five years. What was the sales price?
Jeremy: Okay. 1.070. Okay?
Jeremy: $1,070,000 on Jolly Circle.
Robert: Beautiful house by the way.
Jeremy: Yeah, there was some marketing that was done.
Jeremy: We shot this killer –
Robert: Sweet video.
Jeremy: This video and –
Robert: We are going to put it out on Facebook.
Jeremy: Yeah, we will link it up for you. Incredible video. A guy hitting a golf ball, it is actually me, but you cannot really tell it is me unless you know it is me.
Robert: You shanked it. It actually was not even that good of a hit.
Jeremy: I actually hit it right on the green, I think. But we shot this incredible video, and there was some marketing that had to be created for this home. But no amount of marketing –
Jeremy: Nothing would have changed the value of that hope.
Jeremy: But Jeremy, wait a minute. You mean that marketing does not matter? Oh I did not say it did not matter. Marketing is actually, in a lot of ways, a defensive measure. It is a protective measure to ensure that you get all of the value out of your home.
Jeremy: But buyers will not pay you more than the value. They do not say you know that video that you guys shot? That was incredible, and I am a really smart buyer that has enough money to spend a million dollars for a home. I think I will pay you an extra hundred grand because the video was so impressive.
Robert: Yeah, I was just blown away.
Jeremy: The video, right, the video was to make sure that we got them all their value. It is impossible to under price your home because if you price your home even quote below market you will have multiple buyers bid against and raise the price. Downtown St. George, Putnam’s home, you sold it for twenty grand over the asking price?
Robert: Twenty grand over asking.
Jeremy: $20,000 over the asking price because buyers bid against each other.
Robert: And in downtown St. George, they are selling for what the value is.
Jeremy: They are. Bingo.
Robert: They are not selling for an inflated value. They are just selling for what they are worth.
Jeremy: Thanks, Robert. Hey, let’s go sell some real estate today.
Robert: Hey, why not?
Jeremy: Let’s do that.
Mike: You have been listening to the St. George Real Estate Morning Drive. For more information, call 275-1690 or online find them at Sold in St. George dot com.
The SINGLE MOST IMPORTANT MESSAGE About The Real Estate Market (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.
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.