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Title: 36% St. George Home Price Appreciation? (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 sales@gostgeorge.com. 

Mike: KDXU news time. It is 8:36. Good morning and welcome. It is a Thursday, tenth day of the month of January. It is time for the St. George Real Estate Morning Drive with the voice of St. George Real Estate Jeremy Larkin.
Jeremy: Good morning. Good morning. And if you happen to be, let’s see, where could it be afternoon? Europe, Mike?
Mike: I am sure.
Jeremy: I was doing the math. I am like okay, in New York City it is still morning. Listen, if you are somewhere in the mid-Atlantic Ocean, good afternoon. If you are somewhere in Europe, good late afternoon. If you are in Asia, it is nighttime. Right? And then I’m going to come all the way around.
Mike: Yeah, it is another day over there.
Jeremy: So anyway, welcome to the world geographic and weather program where we tell you all sorts of fun facts about time zone you are in. Good morning to our Facebook Live, YouTube Live, now this is really fun. Now, Jesse, when we put on the YouTube Live, did we make it public?
Jesse: I do not know.
Jeremy: That is what we do not know. You might want to check on that. Just so everybody knows, we now broadcast the St. George Real Estate Morning Drive live on YouTube and Facebook simultaneously. It is classic. It is classic. As a matter of fact, I will get a photo of this right now. Jeremy Larkin here, host of the St. George Real Estate Morning Drive. So happy to be with you. I have got my good friend and cohort, business partner, Jesse Poll –
Jesse: Good morning.
Jeremy: — looking very sharp in his suit coat. I have got Mike McGarry, who is a short-timer here at KDXU radio. Just over here, he is really, he is spinning the tracks.
Mike: That is right. By the way, it is 3:38 in the afternoon in London.
Jeremy: Thank you.
Mike: Just doing it for you.
Jeremy: So it is eight hours, right?
Mike: Yeah.
Jeremy: Eight hours. Okay. Eight hours. Thank you. Thank you. Okay, give us Singapore. Will you just do one more? What about Singapore? Why am I saying Singapore? It seemed like a place that is far away, and I was looking last night, gang, at the Costco Travel Guide. You know when you are coming out of Costco, there is the travel guide on the wall and I was looking at what time is it, Mike?
Mike: 11:38pm.
Jeremy: 11:38pm in Singapore. So there you go. You did not know that, did you Jesse?
Jesse: I did not.
Jeremy: Yeah, it is kind of fun.
Jesse: I have heard Singapore is a pretty cool place to visit though.
Jeremy: Yeah, it looks really cool, so I was looking at some Costco Travel, and there was Singapore and there was Bora Bora where you can go stay, the bungalows, the over-water bungalows. Now here is why I did know more or less what time it was in Singapore. So for many years at the Larkin Group, for our listeners, you understand that we help people buy and sell real estate here in Washington County. Buy and sell means purchasing a home for their family, selling a home because it is time to move, and of course, work on purchasing a real estate investment property. We have a gal by the name of Charmie Mendoza, this is so fun. So fun. By the way, with her bonus, she is going to help her son buy a laptop. His first laptop.
Jesse: That is really cool.
Jeremy: She is a single mom. She lives in the Philippines. She is right outside of Manila, and we hired her through some friends of ours in Sacramento who run a company where they hire Filipino folks to help real estate agents. Culturally, they are really, really incredible at tasking. Like you give the list of 200 tasks, and whatever it is, they just nail this. Right?
Jesse: Something that will take me 30 minutes, she will do in 5.
Jeremy: In five. Right? So, she has worked for us for four years, four years. She is a single mom in the Philippines. So by the way, it is 11:30, 12pm, probably the same time in the Philippines, right, Mike?
Mike: Yeah.
Jeremy: She has gone to work for us right now. So if I were to message Charmie right now, she is sitting at her desk. Her son has gone to sleep, and she will work for us through the night. So she works nights. She will work all night long, and then her son will get up, and she will send him to school and then she will go to sleep. Just like anyone who works nights. Sometimes I will email her at about 10pm our time. I will sit down and be shooting some emails out, and I have seen her respond because now she is back up. It is afternoon there. Amazing woman, and we did a Christmas bonus for her, and she is going to get a laptop for her kid. Kind of fun.
Jesse: That is cool.
Jeremy: I know you think about real estate as HGTV and what you do is you go and you look at three homes and you go to open houses. Our business is very different from that. It is a very digital business. So when you are hiring a great real estate agent, they are going to have a whole digital backend that you do not have any idea about, and that is what she does for us. She handles a lot of our digital marketing.
Jesse: Speaking of digital business, this report that we were looking at, it is something like in the 80-something percent, I am looking for it right now, of homes find their home or clients find their home on the internet. That is a huge –
Jeremy: I thought it was ninety, I thought it was like 90%. Was I wrong?
Jesse: So let’s see. Newspapers are down to four, less than five percent?
Jeremy: How do people find their homes? Give it to us.
Jesse: Yard signs is about 20% and the rest of them, so about 75% will find their home first on the internet.
Jeremy: Yeah, so to be clear about this, this is the home they purchased. Okay? The home they purchased. Good morning again to our Facebook Live and YouTube Live listeners. So if you want to check it out. I do not even know who is a YouTube Liver, but what YouTube Live is allowing us to do is, more than anything, save the show straight to our YouTube channel, which is YouTube dot com slash, if you would like to look it up, Go St. George TV. Slash Go St. George TV. So what it is allowing us to do is already have the show, when we walk out of here it is done, and it is posted to YouTube, and there is no fuss, no muss. Something like that. I do not know what they say. But with our Facebook Live listeners, if you have got a question, please ask us anything. We are going to talk today about how much you might expect your home value to go up or down. Right? How much will it go up or down, your value in 2019. Amongst many, many other things. Today is the economic summit, the St. George Washington County Economic Summit down at the Convention Center, and I will not be there, which typically for years I have been there. But I have decided, elected that we have got more pressing work. The Economic Summit is really neat, but the challenge is they charge you a hundred bucks to go spend the day there. It is kind of a networking event, but what they do is this is where they talk about all the new business unveilings, who is the big corporation who is going to town and create new jobs. They are going to give a big old massive real estate report. Folks, just so you know. We already have all that information.
Jesse: Right.
Jeremy: I am literally looking at it on my screen right now. So instead of spending $100 and spending 7 hours, we are just going to go ahead and put on a radio show, and then work to help our clients. The Economic Summit is really cool. I do not want to downplay it. But here is the cool part. We will just take the notes and the summary, and we will present it to you. We will have Chantry Abbot from Guild Mortgage here in studio and talk about interest rates and oh my gosh, about the fact that they went down.
Jesse: Isn’t that crazy?
Jeremy: We are actually going to talk about affordability and why it is such an interesting time in real estate, where it is the best time for you to possibly sell in the last decade. People are going to have their minds blown when we show them, when we talk about how much values have gone up and down over the last decade. They are going to be shocked, shocked, and it is such a strange time, where it is the best time to sell and probably still one of the best times to buy.
Jesse: Right.
Jeremy: Because of interest rates. Excuse me, I am getting choked up because it is very emotional to talk about real estate for me, Jesse.
Jesse: You are a pretty emotional guy anyway.
Jeremy: I know I am. So Jesse, did you see the stat that we were looking at yesterday in my office about the appreciation in 2005 of homes in St. George?
Jesse: I did, and I am going from memory here because I just glanced at it. I think it said 39%.
Jeremy: 36.
Jesse: 36. I was close.
Jeremy: Very good. I literally had a piece of paper on my desk, and Jesse looked at it. Folks, I want you to think about this for a minute. Jeremy Larkin, by the way, host of the St. George Real Estate Morning Drive. If you have got questions, comments, happy to hear from you, and we are broadcasting Facebook Live, Facebook dot com slash Jeremy Larkin, and we are on YouTube Live. YouTube dot com, so just look up Jeremy Larkin. YouTube dot com slash Go St. George TV. So 36%, I want you, our listeners to really consider what I am about to tell you. Historic appreciation of homes annualized, how much homes went up in value, is like 5%. Right? Four, 4-5% annually. Okay?
Jesse: And that is a good, stable number.
Jeremy: Like a healthy market.
Jesse: Yeah.
Jeremy: Do you remember the economic meltdown that we had, Jesse, and people are trying to figure out how we ever got there?
Jesse: Yeah.
Jeremy: Home values went up in 2005 36%.
Jesse: That is nuts. In one year?
Jeremy: Correct.
Jesse: Wow.
Jeremy: Basically, they did seven years, seven, eight years realistically, eight years of appreciation in one single calendar year. And then we wonder why in 2007 everything fell apart. Very specifically what was going on in 2005 and 6 and whether you are wondering if we are going to have a bubble. We had what was called Stated Income Loans going on. Stated Income looks just like this. Jesse comes in the office. I am a mortgage lender. I am not a mortgage lender. I just play one on TV. But to be clear, we will pretend I am. He comes in the office. He says I would like to buy a home. Well, what kind of home would you like to buy? I would like to buy a $400,000 home. Great. You will need to earn about $150,000, and here is a form for you to fill out your income. Well, you put on the form that you happen to make $150,000, that you just so happened to make $150,000. People were stating their income. That is called Stated Income. And of course, when a market goes up 36%, and by the way, this was not just St. George. This was all of them.
Jesse: That was nationwide.
Jeremy: It was crazy. Definitely was Nevada, California, Florida, Arizona. Then a lot of fraud started popping up. So we are not in that market, and we are not experiencing a bubble. So 36% appreciation in one year. Now here is what is fascinating. Folks say man, values fell a lot after that and it seems like they have come up a lot. Oh, I will tell you exactly how much they fell. Values fell 46% from 2006 to 2011 in Washington County. 46% they fell. From 2012 to 2018, they have come up 42%. So we fell by 46%. We are back up 42%. We are virtually back to where we were before. And people, but wait a minute. Here is the difference. We did that at about 6% a year.
Jesse: Yeah.
Jeremy: That is the difference.
Jesse: Over a five-year period. Six actually.
Jeremy: Yeah, we did that at about 6% per year. We are in a very healthy real estate market in Washington County. Very, very healthy. But we have clients who are struggling because they are saying man, it seems like my home will not sell at its current price. The reason it is becoming a very healthy market is because buyers finally said we are not going to quite pay those prices. Right? Like this is hang on a minute now. So prices are settling. I did not say there is depreciation, that homes are going down in value. It is simply folks realizing they cannot quite ask what they hoped, and so there is an adjustment going on.
Jesse: Yeah.
Jeremy: So, Jesse, let’s talk about this for a minute. Historic mortgage rates by the decade. Okay? Slide number two, and just so folks know, we are going to share this on our Facebook page today. So when this is done, we will post this in the comments. As a matter of fact, let’s see if it will post into the comments as we speak. Historic interest rates by decade. You got that in front of you?
Jesse: I do not. I am looking for it.
Jeremy: Second slide. Let’s look at this. This is kind of crazy.
Jesse: (Indiscernible)
Jeremy: Well, page, slide three, I guess. 1970s, 1970s. Anyone out there born in the 1970s? I was. I was born in 1975. Interest rates were 8.86%. Do you know what an interest rate is today, listeners? Anybody out there? We are at about four and a half. Four and a half. 4 ½%. 1970s the average interest rate was 8.86%. It was twice as expensive to own a home. Now people say wait, do you mean that homes were twice as expensive? No, I said it was twice as expensive to own it, to pay for it with your mortgage.
Jesse: I think we are looking at different reports.
Jeremy: What is that?
Jeremy: I think I pulled up the wrong report. So I am just going to go with it.
Jeremy: Good. There you go. There you go. We are looking at, gang, interest rates were twice, twice as expensive, twice as high in the 1970s. Twice as high. Okay? Is that crazy? Is that crazy? And by the way, Jesse, we are looking at January 2019.
Jesse: Okay, so I had December.
Jeremy: There you go.
Jesse: I did not see January in there.
Jeremy: It is in there if you pull it up there. Listen. Would someone come on the show and help this guy out? I am just kidding. He is great. He is just pulling up –
Jesse: It is probably the one at the very top.
Jeremy: Yeah, it is the one right in front of you that says 2000, it says January. 1980s. Anyone born in the 1980s?
Jesse: There it is.
Jeremy: Interest rates were 12.7% average. The average interest rate in the 1980s was 12.7%. It was three times as expensive to pay interest on your home –
Jesse: Wow.
Jeremy: — in the 1980s as it is today. In the 1990s, Jesse, where were we at?
Jesse: 8.12.
Jeremy: Twice as expensive to pay for your interest rate. And in the 2000s? Because we are not in the 2000s anymore. We are in the two thousand teens.
Jesse: 6.29.
Jeremy: So 30% more expensive to pay for your interest on your home. If you get nothing else from this show today, nothing else, listen, please listen. I am going to talk to three groups. You ready? I am going to qualify every single listener on this show. All right? If you are an older person, an empty-nester, a retired person and you have adult children who are saying should I buy a home. I think values are kind of high. I do not know. The answer is yes. Most likely yes. We would need to ask a few more questions, and you are going to say Sonny, do you know interest rates were in the 1980s when I went to buy my first home? They were 12.7%. They were actually as high 18. Okay? If you are a middle-aged person saying do I buy a home? Do I move up? I have been wanting to sell my home and move up, but the challenge is I am not sure because if I sell my home, homes are so expensive. The answer is probably yes because remember if you sell your home in a high market, if you buy a home in a high market, that means you sold your home in a high market. So you are trading across, and remember interest rates could be twice this. Could be. They will eventually be back at 8%. It is probably inevitable. If you are young person saying I am not sure I should buy a home. I just want to be flexible. Let me remind you that again, if you had any concept because you cannot, because how could you have a concept. I do not know what it was like to live in the 1950s because I did not. If you could have a true perspective on how cheap it is borrow money to buy a home right now, you would realize that paying your landlord is literally insanity if you do not have to. I said if you do not have to. I am not calling you insane. Are you calling me insane? Right? Jesse, am I right or am I crazy?
Jesse: Well, you are crazy sometimes. But I think you are right.
Jeremy: But I am right. Okay. So year-over-year home prices, this is kind of crazy, values have been up everywhere. Everywhere across the country values have gone up. Real estate values have gone up for the last how many years now, Jess? Six years?
Jesse: Six years, since, they bottomed out in 2011 and started coming back up.
Jeremy: So let’s talk about price changes. Okay?
Jesse: Seven years.
Jeremy: Yeah, seven years. So we look at slide 11 here. People want to know, I asked the question do you want to know how much your home is going to go up in value this year or down in value. Let’s look at 11, 12, 13. Those Jess, right? The mountain region, here is what is really cool. We have data right now. I can tell you how much values have gone up in the Pacific, Mountain, Mountain West, West North Central, East North Central, Mid-Atlantic and the New England states, or I can tell you the South Atlantic. I can keep going. We have all this data. Values in the mountain region, and if you want to know what the Mountain region is go straight down to Arizona and then go straight up to the Canadian border through the inter-mountain West. Values are up 8.9% in 2000, year over year for the last year. 8.9%. What about Utah? Do we have Utah? I think we do.
Jesse: There are two different, I think it is Utah is –
Jeremy: What are we year over year price changes? I am trying to remember if they have it.
Jesse: Year over year is 8.8.
Jeremy: 8.8%. So look at this. We have seen an 8.8% appreciation in Utah over the last year. So we do have that information. The United States, by the way, 5.1%. So we are outpacing, do you know what I mean? We are outpacing it. Now the question is asked isn’t it less affordable right now because values are up? Well, of course, it is less affordable because values are up. Right? And I do not want to interpret for anyone listening to our show today that values, that it has not become less affordable because values are up.
Jesse: Definitely.
Jeremy: Yeah, what we are simply stating is that because interest rates are so stinking low that it will likely be just as affordable to buy a home now, it will actually be more affordable to buy a home now than to buy a home that is reduced by $100,000 at an interest rate that is twice as high.
Jesse: Yeah.
Jeremy: It is just, that is just the way it is.
Jesse: Well, the likelihood that the market will go down by $100,000 is –
Jeremy: That is a low –
Jesse: The economy would have to stop again.
Jeremy: Yeah, that is a very low chance. So every single piece of economic data that we have is pointing to us returning to normal, healthy market levels, which means what are we looking at for price changes? Do we think values are going to go up? What do you think? What are they saying?
Jesse: So what they are saying overall for next year is 4.8 for the country, but in Utah here they are saying 4.7.
Jeremy: 4.7. So that –
Jesse: I think that is true. I think that the momentum that we have right now, it will take more than a little bit to stop.
Jeremy: Who is they? I am going to tell you who they is. This is Freddie Mac. National Association of Realtors. Fannie Mae, a company called Kay Schiller, CoreLogic, I could keep going.
Jesse: There was actually I think 104 different economists or groups that was in the study.
Jeremy: Yeah, yeah. So they went out –
Jesse: It is not just one guy.
Jeremy: They went out and they asked the specialists. There are the specialists and then there is the anyway. They asked the scientists. They asked the economists. They asked any and everybody who is a player in studying this information what do you think is going to happen to the home values in 2019? And in Washington County they are predicting, excuse me, not Washington County. Utah. Four point?
Jesse: 4.8
Jeremy: 4.8% in the state of Utah for 2019. Now your home. What does that mean? It is hard to say because we, your neighborhood is very, very case specific. And I am going to tell you that if you are selling a home in Stonecliff or Entrada, it is a very different situation.
Jesse: Yeah that is –
Jeremy: Very different situation than if you are selling your home in downtown St. George.
Jesse: Right.
Jeremy: Santa Clara.
Jesse: And we will throw a report that will cover that for Washington County, even for St. George because if you are talking Stonecliff, you are looking at probably about a year to two years of inventory that is for sale. If you are talking downtown St. George, you are looking at less than two months.
Jeremy: What do you mean by a year of inventory though?
Jesse: Well, if no other homes came on the market, it would take a year or two depending on what price point to sell every home that is on the market. Downtown St. George, it is less than two months.
Jeremy: Right.
Jesse: So it is a big difference.
Jeremy: How about that? Right? It would take one to two years, up to two years to go through all of that inventory. Can you imagine if cereal was sitting on a shelf for two years? Now there are a lot of preservatives in cold cereal. Right? But guess what? It would go bad, wouldn’t it? And what Jesse is saying is absolutely right. Downtown St. George, it is one to two months. Here is what that means. In two months, if nobody else put their home on the market, we would be out of homes to sell.
Jesse: We would be out of homes.
Jeremy: Okay, and by the way, we have specific areas. If you are thinking about selling a home, we have folks looking for homes and they cannot find them in this market. We played around last week, and we talked about our $1 Listing Program? Is it real? It is absolutely real.
Jesse: It is real.
Jeremy: So, you can sell a home for as little as a buck. Terms and conditions apply. Yeah, you do need to buy another home through us. And guess what? Well, what if I am not going to buy another home through you? We have a program for that, too.
Jesse: We have a program for you, too.
Jeremy: Which is the Save Up to $10,000 Program. So we are having some fun in the month of January. Save as little as $1250. But here is the deal, Jesse, what is that percentage? What can people hope for this year for appreciation?
Jesse: 4.8.
Jeremy: Yeah, we are going to hope for it. The only we are going to find out is –
Jesse: We will have a debate next January.
Jeremy: The only way we are going to find out is we are going to have to spend the next year.
Jesse: Figure out who is right and who is wrong.
Jeremy: I do not know if he is right. There you go. Thanks gang. Appreciate you watching and listening and share this on your Facebook page if you are watching with your friends. Over and out.

Can You Spot a Shifting 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 sales@gostgeorge.com. 

Jeremy:  Good morning.  How are we doing, folks?  I am here.  I am alive.  I have got a dead laptop. I am not sure why it is dead.  But guess what?  Does that ever happen?

Mike: All the time.

Jeremy:  So batteries actually die on these things –

Chantry:  Only when you need it though.  Right?

Jeremy:  Yeah, I know. It is okay.  We will plug it in and we will be good to go. I have got Chantry Abbot this morning with Guild Mortgage. Chantry, good morning.

Chantry:  Good morning.

Jeremy:  Give me something good.  What is the greatest thing that is happening in your life right now?

Chantry:  Oh man, the greatest thing that is happening in my life.  I just went to, my son’s doing, he is four –

Jeremy:  Got it.

Chantry:  — and so yesterday, I snuck out of work a little early and well, at about lunch time. Snuck out for a little break, and he is in a gymnastics class.

Jeremy:  Oh man.

Chantry:  And he totally digs it.  Somersaults and all that.

Jeremy:  I have got a 17-year-old who always referred to her gymnastics when she was that age as nastics.

Chantry:  Yeah.

Jeremy:  Something like that.  It is pretty fun.

Chantry:  I have been telling him that the Ninja Turtles do gymnastics, so he is really into the Ninja Turtles.

Mike:  He is sold.

Chantry:  Yeah, he is in that really learn his stuff.

Jeremy:  That is amazing.  I love this. Well, so that is your great thing this morning.  Isn’t that great?  You know what? Let me tell you what is going on great in my life, by the way, folks, is I hauled two kids off to school this morning, and I think they were both just about late.  We are talking about scratching the, oooo, the very edge.  One went over to Tonaquint Intermediate and another to Dixie Middle, and once upon a time they were four.  They were four years old. And there you have it.  We got up.  So but those guys, these two dudes and I actually, all four of the kids, we went up to Bryant Head this last weekend –

Chantry:  I was actually going to say they are probably bummed they were not going skiing today.

Jeremy: Yeah, they probably were.  They probably were.  Bryant Head missed the snow on this storm, but we were there this last weekend, and if anybody out there is thinking about getting up to the mountain, it is actually looking really, really good for this time of year.  I am shocked.  Salt Lake had 14 inches or something overnight.  I saw that.  But it is pretty good for December, I do not know what the day was, tenth.

Chantry:  When do Washington County Schools get out for the Christmas Break?

Jeremy:  So the kids will get out the Friday before Christmas which seems like it is the 21st or second.

Chantry:  So that would be a week from tomorrow?

Jeremy:  Yeah, the 21st. So a week from tomorrow. These kids are seven days left, and then they will have ten days off.  Look, it is the most wonderful time of the year.  The fun thing with Christmas break is that you are actually excited.  For all you parents out there, I think you know what I am talking about. It is actually exciting.  It is fun to have the kids home, and a lot of parents are off of work at least part of that time.  A little easier than summer.  Summer you are thinking, we have got a whole two months of this stuff, don’t we?  Now what am I supposed to do with these kids?

Chantry:  Right.

Jeremy:  And if you are working mom or a working dad –

Chantry:  Yeah, how do I deal with that?

Jeremy:  That gets really busy. Really, really busy. Here we are. We are all on our own plane with our kids and Mike has got his kids grown.  Mine are kind of in between and you have little, a little child.  And that is where we are at.  So Chantry and I are going to be talking about, this is exciting, okay.  It is funny that bad news is often exciting.  It is just so bizarre what is happening in some of these real estate markets.  Right?

Chantry:  Right. It is going to come as a surprise to most probably.  Right?

Jeremy:  Yeah, absolutely. So we are going to talk a little bit about what is going on in Dallas, Texas. Frisco, Texas.  By the way, Frisco, Texas, outside of St. George, fastest growing community in the United States of America.  And just crazy.  There is a Toyota plant there and jobs.  We are going to talk about what is happening with the real estate market.  And the teaser for our listeners out there: builders making hundred thousand and bigger dollar price reductions on their listings, offering real estate agents trips and travel all over the planet to sell their homes.  Some strange stuff going on out there.

Chantry: Yeah, the trip to Mexico caught my eye.

Jeremy:  Oh, is that what got you excited?  Did you want to move out there?

Chantry:  No, I will just take a trip there.  That is all.

Jeremy:  Actually I was just saying to Texas so you can start –

Chantry: I could sell some houses out there.

Jeremy:  So we are going to talk about what is going on with the real estate market and really the US housing boom coming to an end and what that means, and whether you should be alarmed, and whether St. George is next.  November was a very strange month for everyone in the real estate market, both in sales, real estate sales and in lending, that is what Chantry does.  He is with a company, Guild Mortgage, and they have worked with us for so long, at least coming up on a decade and do such amazing work. Of course, what they do is help people find the money they need to purchase a home.  And they have worked with, I do not know, certainly dozens and probably more like hundreds of our clients over the years.  Right?

Chantry:  Yeah, hundreds. Yeah.

Jeremy:  Hundreds of clients.

Chantry:  Families.

Jeremy: And you have been doing mortgage lending, I like to tell people home lending in a way because sometimes people out there in the public are like well, I do not.  Do you know what I mean?

Chantry: Yeah.

Jeremy:  But mortgages or loans for people purchasing homes for how many years?

Chantry:  It will be 13 when the calendar turns.

Jeremy:  Thirteen.

Chantry:  Crazy.  It was 2006.

Jeremy:  This is wild.  So let’s do some history.  So thirteen, 2006, 2008 is when they really say the bubble burst.

Chantry:  Yeah.

Jeremy:  So we are decade. We are having a ten-year anniversary, and we talked a little bit about this on our show last week.  So you read these articles –

Chantry:  That I did.

Jeremy:  — that I am talking about? Should I give folks the highlights?  Let me give you the headline for this article.  It is Bloomberg, and we will post this into the Facebook comments.  If you are not watching us on Facebook Live, you can catch us at Facebook dot com slash Jeremy Larkin.  The way it sounds, J-E-R-E-M-Y, Larkin, L-A-R-K-I-N. Facebook dot com slash Jeremy Larkin.  We are streaming it live.  We stream it live every week and then we post this over to the Larkin Group Facebook page.  Of course, if you are listening to us on the radio, you are either on 890AM or 94.9FM.  So our Facebook listeners, if you want to get on the radio, you can hop to 94.9FM, 890AM.

Chantry:  If anybody wants to, I have got my phone.  I am going to see if there are any comments.  I just barely thought of it.

Jeremy:  Oh beautiful, beautiful.

Chantry:  So if anybody wants to comment on Facebook, we will answer the question.

Jeremy:  Yeah, I love this.  Yeah, if you guys have questions, specific questions for Chantry who is doing lending, specific questions for me. So let me give you the headline:  Free vacations, $100,000 discounts, home builders get desperate with hot markets cooling and mortgage rising the industry turns to incentives to boost sales. And of course, Bloomberg paints this in such a dramatic fashion, do they not?  A real estate broker in suburban Dallas is raking in freebies this year.  Trips to Lake Tahoe and Santa Barbara in California, Cabo San Lucas in Mexico, and a dude ranch in Wyoming.  The home buyers he represents are cashing in, too.  They are winning price cuts of more than $100,000 on top of free upgrades such as media rooms, cabinets, and blinds.  This feels a lot like, when you hear this, some stuff we saw here a long time ago.

Chantry:  Sure, yeah.

Jeremy:  Doesn’t it? It goes on to say the generosity flows from an increasingly desperate home builder market. Hot markets are cooling as fast as interest rises, and this is where they really throw the drama on here.  Some flare.  In the great housing slowdown of ’18, it is like they have added, they have created their own term, shoppers are reclaiming the upper hand after years of soaring prices that placed most inventory out of reach of many families.  Everyone is hungry for buyers, he says. What do you think, man?  When you see that, what are your thoughts?

Chantry:  So sure, has the market shifted a little bit?  Absolutely. Is that an extreme version of it?  Yeah, of course it is.

Jeremy:  For sure.

Chantry:  But anybody that follows the housing market, it is kind of interesting.  It has been very similar to the stock market. So those of you that follow the stock market have noticed some things have changed over the last couple of months, quite significantly. And we have noticed that in the real estate market. But it had to.  It was out of control.  This summer, all of us were looking at each other going there are no homes for sale.

Jeremy:  It was weird. It was ridiculous.

Chantry:  Buyers have no, buyers have no control. And it was not just prices that were that were crazy.  It was terms. It was like they could not ask for anything.  They had to close really fast.

Jeremy:  Yeah.

Chantry: They had to make offers sight unseen.  Just weird stuff that just is not really good for a buyer.

Jeremy:  No, it is not good for a buyer at all. And one of the challenges we have in real estate is anytime that the market turns to where one group has the serious upper hand, either a seller’s market or a buyer’s market, it is going to create weird dynamics.

Chantry:  Not good.  Yeah.

Jeremy:  And this is not good either.  What we are hearing about in Texas. Definitely, when Bloomberg and Wall Street Journal and, and, and start running articles saying that the housing market is coming to a massive halt in Dallas, it scares people.

Chantry:  Sure.

Jeremy: Right?

Chantry:  Yeah.  Especially what happened ten years ago.  We all think oh, can that happen again.

Jeremy:  Excuse me, yeah, there is just no question.  And we do sit here wondering what will happen?  Like coming up here, it is interesting.  It says, let’s talk about some things that are issues that slow the housing market down, and we will answer the question whether St. George is next.  Rising interest rates –

Chantry:  Yes.

Jeremy:  — and we are going to ask you specifically about that. Trump did a tax overhaul that caps the, places caps on tax deductions for mortgage interest.  That is an issue.  Right?

Chantry:  Sure.

Jeremy:  They are hurting really like high tax areas.  New York, massive high taxes that really hurts those people.  4,000 new condo units listed for sale, will be listed for sale in 2019 in Manhattan they said.

Chantry:  Yeah.

Jeremy:  In Manhattan.

Chantry: Wow.

Jeremy:  Not in New York City.  Right?

Chantry:  Yeah.

Jeremy:  4,000 new condo units. You have got, okay, they talked about Austin and San Jose, California. Austin, Texas. San Jose, California. They have put, like immigration restrictions have kind of slowed down high-skilled workers coming into those markets. Some of these places are now less appealing to your Chinese buyers and your foreigners.  We do not see as much of that here.

Chantry:  Right.

Jeremy:  How often have you ever seen a foreign buyer try to get a mortgage?

Chantry:  It is really rare.  Occasionally we will get the Canadians because they love the warm weather here.

Jeremy:  Right.

Chantry:  Really honestly, some of them, it is the first warm place south.

Jeremy: Yeah.

Chantry:  So if you are heading south –

Jeremy:  It is.

Chantry:  — on I-15, boom, first warm place, really nice, great spot.

Jeremy: That is a great point.

Chantry:  So we get a little bit of that. But it does not drive our market by any means.

Jeremy:  No, not at all.

Chantry: But to your point, with the rising interest rates and home prices as we know just continued to go up and up and up, it is all about affordability.

Jeremy:  It is.

Chantry:  It really ends up being to a point where if prices get too high, rates go up, it is just not affordable anymore. So there has to be some sort of a shift back to normal.

Jeremy:  There absolutely does. So what you are saying is, from your perspective, this housing, the great housing slow down of 2018 is not a problem.

Chantry:  Yeah, let’s understand one big difference.

Jeremy:  Yeah, let’s do.

Chantry:  In 2006, do you remember the loan that they called the Stated Income/Stated Asset?

Jeremy:  Oh, for sure, I do.

Chantry:  Okay, so what this was was you are sitting across the desk from a mortgage guy and they say well, you need to make $10,000 a month, Mr. Schoolteacher. You make $10,000 –

Jeremy:  So what would he do?

Chantry:  — a month, correct?  Wink, wink.  And then all of a sudden, the deal is closed.  You did not have to document anything.  It was insane. There was no common sense, greed, crazy, stupid, whatever you want to call it.  Loans were getting done to people that just should never have gotten the loans.  Period. End of story.  And so, it made everything go out of control, and these people were doing it knowing that they could not afford the house payment. They just thought –

Jeremy:  Right.

Chantry:  They just thought if I do this, I can hang on for a year and then I will sell it and make all this money because my neighbor did that.

Jeremy:  right.  Right.

Chantry: And so let’s do that.  I know I cannot afford a $2500 house payment.  My neighbor just did it, and we can sell it in a year, and we can do it for a year.  Pull it out of our retirement.  That is what was going on.  See people were getting these loans they could never afford.  Ever.

Jeremy:  Not a chance.

Chantry: They never even thought –

Jeremy:  Not a chance.

Chantry: The people did not think they could afford them.  So now the total difference is loans are tough.  Loans are, it is hard to get a loan.  People that get a loan, by the end of it, they are tired of all these rules and giving us pay stub after pay stub and bank statement after bank statement and all this stuff we have to dig into, and absolutely the whole point of it is to make sure the mortgage industry feels like this person can actually afford this house payment.

Jeremy:  Well, right.  You need to make $10,000.  You know it is funny you ask that because I happen to be making $10,000.

Chantry:  Oh, that is weird timing, right?

Jeremy:  Actually, it is 12,000.  Well it is funny you would say that because I just got a text from my boss.  My income was raised.

Chantry:  Yeah, exactly.  Right.

Jeremy: It is like this is incredible. Right?  It is amazing how everybody seemed to have the qualifications during that time to do this. Right?

Chantry:  You did not have to get anything. It was just whatever you said, get a loan.

Jeremy: Well, okay, so the big difference now, that Chantry is saying, we have got Chantry Abbott here with Guild Mortgage here in St. George, we are talking about the great housing slow down.  I love this term.  I think I am going to run with it.   That Bloomberg News has put out of 2018 and we shared, if you just picked up the show, the fact that, and good morning to everybody on Facebook, and good morning to all of our listeners.  Thank you so much for your support.  Talking about the fact that in some of these housing markets it is slowing down.  So we saw massive, they are giving away vacations and crazy incentives and free media rooms and free upgrades and free cabinetry.  And they are giving away, they are reducing prices a hundred to two thousand dollars on these expensive homes by the way. Just to be clear, Chantry, I think people need to understand this.  They are reducing the price of seven to hundred million dollar homes by a hundred thousand dollars.

Chantry:  Right, yeah.  It sounds really –

Jeremy:  These are not $300,000 homes.

Chantry: A $3,000,000 house had $100,000 reduction.

Jeremy: Yeah, so let’s be clear.  However, what Chantry is saying here is that the difference between ten years ago as the housing market kind of catches up to itself, is that people are actually qualifying for the loans, aren’t they?

Chantry:  I have not done a loan since 2008 that was not like extreme documentation of being able to make the payment.  It has happened. People still have stuff happen in their life, and they are going to have short sales or foreclosures or fire sales.  I have to get rid of the house.  For the most part, these people are affording their payment barring a catastrophe, and that was not the case then. So that is where, sure, are we going to have a slowdown? Yeah, we needed it. We needed it.

Jeremy: Yeah.

Chantry:  It was a bummer for homebuyers.  There was not anything for sale. It was a little bit out of control, and I do not even necessarily mean prices were out of control. I just mean there were not enough, you sit down with a buyer and you go here are the two homes that are available. Which one do you want to buy? The seller has all the control in that situation, and that is just not good.

Jeremy:  It is not good at all.  And the sellers are like this is great. So, let’s put this in perspective for our local people. I have a comment.  I have an observation and a question.  Let’s start with the question. The prevailing 30-year interest rate today if I went to get a mortgage is what?

Chantry: About four and three-quarters.

Jeremy:  Okay, so it is four and three-quarters percent to get a home mortgage today, typically. Assuming fair credit and all that stuff, good credit.  Okay.

Chantry:  Somewhere in there 5% —

Jeremy:  Good credit, by the way, we are not talking 800.  Just thinking if you have got 700 –

Chantry:  Four and three-quarters, 5%, whatever.

Jeremy:  Okay.  Yep. What is the average interest rate that people have paid since they started tracking interest rates to borrow money for a home?

Chantry: Great question. So the mortgage industry as we know it, Fannie Mae and FHA, and it has been around since the 1950s we will say.

Jeremy:  Okay.

Chantry:  It is a little over 8% is the average rate over that timeframe to current.  And that is taking in current day when they have been crazy low, which is throwing the average off, right?

Jeremy:  This is crazy.

Chantry:  So the government made interest rates lower than they should have.  Even counting that, the average is still over 8%.

Jeremy:  This is, okay, this is going to be fun.  Typical person comes in your office today and wants to buy a $300,000 home, which is the average home in St. George right now.

Chantry:  Yeah.

Jeremy:  It is actually 330, 340, but I am going to say 300, okay, because I think the average is skewed because of higher –

Chantry:  Yeah.

Jeremy: Really is 300.

Chantry:  Take out the extremes.

Jeremy:  Yeah, the stuff that people are really affording.  If they buy a $300,000 home, your typical client, just no specifics, what is their payment? Like the typical payment?  What is the most average payment you send out of your office?

Chantry:  $15-1800.

Jeremy:  Okay, so let’s call it $1650 a month.  So the average mortgage payment that someone is coming out of Chantry Abbott’s office, Guild Mortgage, when they go in there and they hire them to help them get a loan, it is $1650.  Chant, just for fun, and I am putting you on the spot, if interest rates went from 4 ¾ to 8%. Today we are 4 ¾.  Eight is the historical average.  If they went up by 3 ¼ points, what would that payment 1650 be?  Just as a guess.

Chantry: I will do the math, but I am going to say about $400 a month higher, probably over two grand.  At least probably.

Jeremy:  So we are four –

Chantry:  I am going to do the math.

Jeremy:  He is going to do the math.  He is going to do some math. So let me put this in perspective as he playing around here.  He is actually just making his move on whatever, what is the game that everybody plays?  It is almost like Scrabble that they are playing with their friends.

Chantry:  Oh yeah.  Words –

Jeremy:  Words with Friends.  He just needs to make a move on Words with Friends and he will be back on. If interest rates right now, because we are going to tie this in, because we started the show by saying that the housing market is falling apart in Texas.  I do not know if it is falling apart, but wow, it has kind of shut off overnight.  If you read the article I linked in on Facebook to Bloomberg, you will be fascinated at the way it reads.  If rate were today at the historical average interest rates for you to buy a home, your payment would go up by an average of $400 for the typical homebuyer. From 4 ¾% what is the number?

Chantry:  It is about 500 actually.

Jeremy:  Five hundred.  Okay.  This is even better. Thank you for adding some excitement.

Chantry:  So about a 3% difference on that scenario is almost $500 a month.

Jeremy:  So it is very simple where we are going with this. So the question is what are rates?  4 ¾%. The simple point is that this is absolutely a time that is still a great time to be buying a home.  Now, here is the observation I wanted to make.  We are seeing the For Sale By Owner sign go up everywhere in Washington County –

Chantry:  Right.

Jeremy:  — in the last 30 days.

Chatnry:  It is easy.  Let’s just sell it on our own.  Right.

Jeremy:  Have we noticed historically, gang, that consumers are always six months behind every trend?

Chantry:  Yeah, yeah.

Jeremy:  We are always six months behind.

Chantry:  Yeah.

Jeremy: Now here is the reality –

Chantry:  We all know that guy.  Oh, my buddy made a bunch of money in the stock market.  I am going to hurry and jump in. It is like you missed it.

Jeremy:  Yeah, you missed it.  Right?  So what is going to happen with most of these people selling their home by owner, and I have to be very honest about this, we are needing to reduce the price of most MLS listings right now to get to them in line with what the market is really supporting, and we have talked about this for a month because sellers have been asking more than the market would support.  Values are not really going down.

Chantry:  Yeah.

Jeremy:  Right?  In St. George.  People have simply been asking more than the market will support.

Chantry: Well, what people do and I think this is where you are getting is their house is realistically worth 300, but they think, you know what, I have heard it is crazy.

Jeremy:  I will do it at 325.

Chantry: There is nothing out there.  Maybe we put our house up for sale for 330 and see if we get it.  And if we get it, really cool, let’s sell it.

Jeremy:  You know what?  Let’s just go 600 and see what we get.  Okay, but they are not going that crazy.

Chantry:  Let’s just put it up for sale at 330, 350, and we get that.  Cool, we will sell.

Jeremy:  Right.

Chantry: And that is not what is going to happen now.

Jeremy:  Right. So the For Sale by Owner, where every professionally marketed agent listed is being reduced, most of the For Sale By Owners are not going to have success right now, and it is going to be hard, and that is going to be frustrating.

Chantry:  Every time I do a mortgage and there is a For Sale By Owner, the buyer thinks he is going to get a deal.  There is no real estate commission, so I am going to offer him super low.

Jeremy:  The buyer wants the deal.  So folks, if you want to reach out to Chantry Abbott at Guild Mortgage, 674-1090?

Chantry:  Yes.

Jeremy:  Best number, 674-1090, and Mike will give you our contact information.  Have an amazing week.  Get your Christmas shopping done and check out the article we linked on Facebook about free vacations for realtors in Texas.  No free vacations here that I have seen.

Chantry:  There is one for Mexico, I think.  I do not know when that was.

Jeremy:  Okay.  All right, man.

Mike:  (Indiscernible)

Jeremy:  There is a dude ranch vacation.

Mike:  Dude. All right. You have been listening to St. George Real Estate Morning Drive.  For information, call 275-1690 or find them online, Sold in St. George dot com.