Is St. George Over-building Vacation Rentals? Real Estate Radio w/guests Ty & Pam Isham (St. George Real Estate Radio Show)
Today, Jeremy Larkin brings guests Ty and Pam Isham of My2ndHomeVacay.com to talk about the Vacation Rental boom in Southern Utah! The Ishams manage dozens of nightly/weekly rentals, interface with the owners and of course, would-be buyers of these properties. Tons of amazing info on the market, enjoy!
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 firstname.lastname@example.org.
Andy: 8:35 on News Radio 94.9, 890 KDXU. Every Thursday we get a little taste of St. George Real Estate. It is the St. George Real Estate Morning Drive with Jeremy Larkin. Jeremy, take it away.
Jeremy: Good morning, ladies and gentlemen, ladies and germs. Ladies and germs, right, Tai? Tai is in the background. He can yell. Hey, I have got some fun guests here today by the way. I like to go with the lady’s name first, which is Pam.
Pam: Hi, good morning.
Jeremy: Yeah, and Tai Eisham. And on the Facebook Live you are going to like this because we always put a title. And I said this morning, let me pull it up, guys. If you are not watching Facebook Live, you had better be. So you can listen to this show 94.9 FM, 890 AM, Facebook Live, YouTube Live, shoot, man, I think we might even have just the government downloading it straight into your brain. When we figure that out. I said Pam –
Jesse: If you pay them enough money, they might.
Jeremy: Yeah, I said how cool is that and a glass of milk?
Pam: And a glass of milk.
Jeremy: Yeah, like how cool is that? So we are going to have Pam on momentarily after we listen to ourselves talk. Right, Jesse?
Jesse: You love to listen to yourself talk, that is for sure.
Jeremy: That is why I started a radio show. Let me go ahead and do something. Guys, I am going to do something live on the air. I am going to encourage you to do the same. I am going over to, I am letting my fingers do the walking. Who remembers that? Who remembers what company that was? It was one of the phone companies, but which one was it?
Jesse: I cannot remember.
Jeremy: Let your fingers do the walking?
Jeremy: Was it?
Pam: Was it?
Jesse: I cannot remember.
Jeremy: Okay. Let your fingers, Yellow Pages. It is just Yellow Pages. Let your fingers do the walking.
Jesse: I was going to say that but then you said phone company, and I am like phone company, they are not a phone company.
Jeremy: Yeah, yeah. Hey, Jess, kick that door because we have got guys, I think, they are having a drunken party down at Devin Dixon’s office on the ESPN radio right now, which is really early for those guys to start drinking. Right? 8:37. Thank you. Guys, visit Sold in St. George dot com. Jesse, will you tell them what you are doing by the way?
Jesse: This is so exciting.
Jeremy: I am going to cast my own vote for myself right now, for us.
Jesse: We are going to do that. So we actually have been nominated for the Best of Southern Utah, the Larkin Group. Actually twofold, Jeremy and the Larkin Group.
Jeremy: Best Realtor and Best Real Estate Team.
Jesse: So we would love your help in that. Jeremy posted that thing the other day that said the last time I won anything was in high school.
Jeremy: It was the Class of 1993 yearbook, and I hope, I hope some of the people that I care about are watching right now. It was when I won Biggest Comedian for the Preference, ’93 Preference. Okay? No, Andy, it is real. Go to Facebook, man.
Jesse: He did. In all seriousness, if you know who the Larkin Group is and you know who we are, we are all about trying to do the right thing and be the best that we can be. So if you have done business with us or if you love what we deliver and the value that we give, we would love the opportunity to win that contest.
Jeremy: Thank you, man, for that description. So you just visit Sold in St. George dot com and the way that we rigged out website, it is so fun. It pops right in front of you and says vote here. And here is the cool part. Two clicks. You click it opens. You click, you voted. There is no email. No phone. No nothing. It is one of the most killer platforms. I did not build it. Another media company in town did, a competitor. So please vote for us over at Sold in St. George, Sold in St. George dot com. You can actually vote every day until March 15th. I know we will not count on that for most of our listeners, will we now? Will we now? Thank you, Robert for posting that. Morning to our listeners, viewers, watchers. I have always wanted to start a watch party. Can we try that sometime? Let’s start a watch party.
Jesse: A watch party?
Jeremy: I do not know.
Jesse: Is that on Facebook?
Jeremy: It is on Facebook. Guys, momentarily, we are going to have Pam Eisham on, and Pam and Tai, they manage short-term weekly rentals. Some of you might have heard on Tuesday I landed here with Andy in the, whew he is giving me the thumbs up, I landed very last minute on the Open Mic Show and we talked about vacation rentals and short-term rentals. I wanted to give you a teaser, okay? Because yesterday she asked so responsibly what questions, and here are the questions I asked her that we are going to talk about today. Thirty seconds, what do you do? In one minute or less, how did you get into the business? How many units, vacation rentals do you manage? Who are your clients? Who are the people who buy vacation rentals and need them managed? What kind of income do they bring? How much money can they make? What are the biggest concerns owners of vacation rentals have? What does it cost to have it managed? What is the biggest challenge you face managing short-term rentals? How does someone contact you? And what is your general opinion of the short-term market? This is like, and I have said this on the air, this is the news at 10:01. They go hey, stay tuned for the most important story, which will be on at 10:29PM at the very end of the broadcast. But we will not go that long. So momentarily we will have Pam on, but I am Jeremy Larkin, host of the St. George Real Estate Morning Drive. I have got Jesse Poll here, who has really become, he has become my co-host.
Jesse: That is right.
Jeremy: Andy Griffin, we took his microphone and headset away as part of a punishment. He is in a timeout this morning. He has got his headset. We just took his microphone away. And if you will please cast your vote over at Sold in St. George dot com for the Best of Southern Utah. And I would be curious, see, I am trying to track, do you know what I did. I created a Google document yesterday with all of my favorites companies that I am voting for, and I am actually voting for daily. Literally. I have my own list.
Jesse: So where do you go to find the whole list of all the companies in the different categories?
Jeremy: So, this is perfect. So if you want to go over to Best of Southern Utah dot com. Best of Southern Utah dot com.
Jeremy: And you can vote. My gosh, you can vote for just about anything. I think there were 900 companies nominated in I do not know how many categories.
Jeremy: I do not know.
Jesse: I am going to go look at that.
Jeremy: Yeah. Let’s talk about short-term rentals.
Pam: Talk about short-term rentals.
Jeremy: Let’s do it. So I have got Pam here. She is lovely. I have Tai just lurking in the shadows, probably like he has done most of their marriage. I do not know. Is this a metaphor? Is this a metaphor? He is back there. He is sckulking around. I love it. I love that he is in the studio. I have Pam Eishman. And Pam and Tia are actually past clients of ours –
Jeremy: — that we have worked with in the real estate world. So thank you for, I always say, helping us feed our families because literally you did and you do and you guys have referred us business, and we are working on referring you business now.
Jeremy: Which is going to be awesome. So, give us a 30-second synopsis like we talked about earlier. What is your company and what do you guys do?
Pam: Yeah, essentially what is our company? So we are vacation rental management company. But then I thought hard about what do we do, right? So what we do is we provide great experiences for our owners and our guests. It is our ultimate goal that people build memories when they are with us. Right?
Pam: People come to our area for many things, and what we want them to do is be able to come and put their feet up when they come into one of our units and feel like they have just come home. It is their second home. It is a place to kick back and have all those comforts.
Jeremy: It really is. When I was on Tuesday, I actually relistened to the show. Andy, it was funny. Yesterday, I (indiscernible) doing something else, and I was even giving, getting a kick out of myself. I said I am user. Dot, dot, dot.
Pam: I heard that.
Jeremy: So that is why I do it.
Jeremy: I saw the funniest story the other day. It was a Facebook story. A guy, I do not know how it got in the news, but KSL had it on their Facebook feed, and the guy is looking at long-term retirement housing. Like when Mom and Dad get too old and they put them in, not a care facility, but more like –
Pam: Assisted living.
Jeremy: — like assisted living. And he was talking about the cost, and this guy had written blog about it. A blog or a Facebook post, and he said here is the deal. It is X number of dollars per day to stay at one of those things. He said I am actually going to go to the local Hilton, whatever it was, and his city was $59 a day, and it had free breakfast and they have a pool and everything. And he literally had said that is where I am going to retire to. And it is comical because there is no reason he cannot do that. But what it brought up is for me a hotel is not like a condo, a home, a vacation rental.
Pam: No, not at all.
Jeremy: It just feels like a hotel.
Jeremy: Like they are going to come in and change the sheets in the morning. I guess that is fine. I hope they change them. There are a lot of horror stories about that. Isn’t there, Jesse? So home away from home.
Pam: Home away from home. And I have actually had older people talk to me about that very thing. Like maybe they want to travel. They want to give up their home, so they just vacation home hop. A month here, a month there.
Jeremy: Yeah, have you guys ever, and I mentioned it yesterday, Jesse. Would you raise your hand? No. Have you ever checked out at all what we talked about Tuesday which is the home swapping?
Jeremy: Yeah, that is kind of cool.
Pam: Yeah, I actually have had a couple of owners talk to me about that. If somebody is interested, hey, I would swap.
Jeremy: I want to do it. I want to do it. I really am going to do it.
Jeremy: So how did you get in this business?
Pam: Actually, I started in hospitality way back when I was in college. Having that need to have a little extra money, so I actually worked at the local Town & Country in Cedar City as a housekeeper, and then when we moved here, Tai was actually in the car business selling cars for one of the local dealerships here. And kind of half stay-at-home mom at the time, an opportunity came up just around the corner at Timeshare. So I said why not? So I started there, kind of lower in the ranks.
Jeremy: Where were you at? Like Worldmark or something?
Pam: Yep. Worked my way up through the company and worked in Housekeeping, became the Assistant Resort Manager and then into the General Manager position.
Jeremy: So it is in your blood.
Pam: It is in my blood. I was raised in the restaurant business.
Jeremy: Here is the thing. She is good on radio, isn’t she?
Jeremy: She was nervous about it. I just want to tell you that.
Pam: Yeah, I was.
Jeremy: She is very comfortable. Very comfortable. But what I love about this is you actually do have experience in this realm. Right?
Pam: Right. It is a big difference because of what a guest expects when they stay at a place, even though it is not a hotel, they a lot of times expect the same type of treatment that they would get at a hotel, so having that hospitality background is something that we bring to that so that we can create those great experiences for people.
Jesse: That is really interesting because how many of other property management companies treat it like a long-term rental and it is just not.
Jeremy: It is not.
Pam: It is not at all.
Jeremy: How many? I do not know, but I guess what you are asking. Right?
Jesse: Right. That is interesting because that is a lot different message than I have heard before.
Jeremy: Yeah. Have you done a vacation rental? Have you stayed in one?
Jesse: No. But just talking to different people. We do not, I was going to say you want to make some really good money? How to package for people that want room service to come in.
Jesse: The reason we do not typically stay at a nightly rental is because my wife wants them to come make the bed. And I do not want to do it.
Jeremy: When you said room service, I thought you meant you wanted the $18 cheesecake.
Jesse: Well, that too.
Pam: That is what I thought he wanted, too.
Jeremy: You mean changing the linens. Okay.
Pam: We actually offer that. For a price, people can actually schedule that in advance. We will actually even go get their groceries for them.
Jesse: There you go. So there you go.
Pam: Have them set up.
Jeremy: There is so much.
Jesse: I did not know that. I was not a read-in.
Pam; Yeah, we can do that.
Jeremy: Yeah, why don’t you stop being such a, what is the word here?
Jeremy: Man, isn’t it funny that my brain just fried out.
Jesse: Once in a lifetime.
Jeremy: Why don’t you actually practice what we are talking about and actually go stay in a vacation rental? You are such a hypocrite. That is the word.
Jesse: I stayed in one in Boston.
Jeremy: Did you really?
Jeremy: That is cool.
Jesse: I have stayed in them.
Jeremy: Okay. You did.
Jesse: And then we come home, and my wife says man, the bed is not made.
Jeremy: I know. I know. She is like this just feels like home.
Pam: It is awesome.
Jeremy: So, Pam, kind of segueing along here, your company name is?
Pam: My Second Home.
Jeremy: My Second Home. Bingo. So you guys now manage, I said 30 on the Facebook feed. I do not know. What is it?
Pam: Yeah, we are at 26 right now and quickly growing because we are involved in a couple projects here in town. So everybody kind of knows that new area out there in Ivins where you have got Arcadia and Paradise. Well, we are actually one of the management companies managing for Ocotillo Springs, just behind those.
Jeremy: I know exactly.
Pam: We have got units selling and opening up so there will be a lot of those to manage here soon.
Jeremy: So here is what I want folks to do here this morning. By the way, I was just looking at our Facebook feed. If you have got questions or comments and you are watching this Facebook Live, please do ask.
Pam: Yeah, absolutely.
Jeremy: We would love it and that would be remarkable. So you have got 26 units and what does, if I am an owner and I want to have a vacation rental, but I wanted it managed because I do not want to fiddle with it, what does someone pay? Like what is general standard?
Pam: Yeah, standard is pretty much in our area is 30%, but it is pretty much across the board. If you look around the United States, when I have looked at other areas, it is 30%.
Pam: Some are a little bit higher than that, but I feel that that is fair.
Jeremy: Yeah, and that is what I have heard. I have heard 25-35 across the (indiscernible) –
Pam: And that is off of net nightly.
Jeremy: Yeah, net nightly. If I have, okay, in a year, what is a typical owner that you have here bringing in annually? I am going to narrow it down momentarily.
Pam: Yeah, annually, it could be, it just depends upon where the unit is, too, and what the nightly rate is for it.
Jeremy: Okay, let’s talk about somebody that has got a Las Palmas unit.
Pam: Okay. So Las Palmas unit, they could be bringing in anywhere from $15-25,000 in a year.
Jeremy: Annually. Okay. What is the most expensive property that you manage?
Pam: Most expensive property that we manage currently is at Estancia.
Jeremy: Okay, so what would they bring in in a year?
Pam: Actually, close to the same.
Jeremy: Isn’t that funny?
Pam: Because here is the thing. Because here is what people want. They want bang for their buck. Right?
Pam: So, when you tend to have a property that is higher-priced, sometimes maybe it does not get quite the occupancy that one does that is more fairly priced.
Jeremy: So Estancia, really quick. Describe the Estancia unit compared to the Las Palmas unit for the listener.
Pam: Okay, so basically the Estancia unit, the most expensive one that we have would be considered like a Presidential suite. So it is like a four-bedroom, four-bath unit, top floor unit, over looks the pools. Right? And one of the neat things about this property compared to some others that we do is we do rent it as a three, a four or a one, which is like a hotel room. We have a lockout on it. So we can actually divide the unit up. Our biggest units over at like Las Palmas, they are actually equally as nice. We have second and third floor units that are three bedrooms, three baths. Beautiful units with lots of square footage. What would you say, Tai? About 1500-2000 in one of those? Yeah.
Jeremy: Yeah, that sounds right.
Jeremy: Marlene asked a question. What is a normal occupancy rate for Arcadia, Paradise, and Ocotillo? Like for annually?
Pam: For annually, I am going to say it is going to be between, because they are still fairly new properties, you are probably talking between 30 and 50% occupancy in those.
Jeremy: I heard, and you guys know Kendall, and I was commenting about Kendall on Tuesday because he was texting me while we were on the air. So Kendall has done a lot of vacation rentals, and we are in this conversation, by the way, of creation versus competition. So, hey we are talking about their competitor. But he is a great guy. These are great people. He was commenting that at some of those places that you are seeing about 60% kind of max. But you have not seen anyone with more than probably 50-60%.
Pam: No, absolutely not. Not with as many rentals as we have in the area right now.
Jeremy: Yeah. There are so many. Are there, and you get to be opinionated here –
Jeremy: — and well remember the reason I say that is because I think people are afraid –
Jeremy: — and I have gotten quite opinionated on this radio show.
Pam: You have.
Jeremy: It is fun. It is fun. I am not quite Rush Limbaugh, but do you think there are too many units being built, vacation rentals being built and zoned?
Pam: I think the zoning is a great thing. I think that we probably have too many being built right now because the problem is with the amount that are being built, they are still a very costly piece of property compared to what an average home is. Right?
Jeremy: Yeah, that is what you said, Jesse, when you commented.
Pam: Except for what that ends up doing is driving down the nightly rate because we all compete. Every single company here is going to tell you that they do like market analysis, right, and we are watching what the prices are. Well, you have got to compete with your competitors and where people want to stay. So that drives down the price, the nightly price.
Jeremy: Yeah, and I have been, strongly think that we are building too many, and I am, remember the litmus test is the notice, did you notice test, and did you notice when you drive around town that everywhere you look there is another billboard or 8×8 sign in the ground that says we are building new units that are nightly, weekly zone.
Pam: I heard you say that the other day, and I see them too. We drive around to see them.
Jeremy: What is going on here?
Jesse: The opposing opinion about that would be is that the City just trying to offset all of the private owners trying to do the nightly rental in places that are not zoned. They either open it up to the City or keep it where they can control it.
Jesse: They are going to be here either way.
Jeremy: Correct. We have 1000 new hotel rooms right now. So 500 just this last year and another 500 coming online. That is a lot of hotel rooms.
Jesse: That is.
Jeremy: This becomes challenging. One of the strongest opinions that I have is I do not really advise for most locals that they are purchasing a vacation rental in St. George. If I were purchasing a vacation rental, I would be purchasing it in Park City, Coeur d’Alene, Idaho. In a place that I want to go. Right? And I want to spend some time in, and then allow these tenants to offset my costs at 30-50% per year.
Jeremy: That is just me.
Pam: So here is –
Jeremy: I do not know.
Pam: — here are two little tidbits for you.
Jeremy: Yeah, go.
Pam: So first one is even though we have that many hotels already, and I know we are building so we may reach that cap to where all of a sudden, we have got too many vacation rentals, too many hotels. But even right now, President’s Day weekend, and you can talk to other managers and they will tell you the same thing because we call each other to help each other. Our phones are ringing off the hook. There is no place to stay.
Jeremy: There is no room at the inn.
Pam: There is no room at the inn because we have got sporting events going on. We have got Parade of Homes going on, and –
Jesse: That is true.
Pam: — we are just packed to the gills. You heard people on the radio complain about the traffic issues and stuff.
Jeremy: Oh, it is, yeah.
Pam: And then the other end of it is as far as locals owning, now I have had several people come to me and I have actually had people that have purchased, and you can talk to other realtors about this as well that are kind of into selling the vacation rentals, but what is really, really interesting is that there are locals that want them. Why do they want them? This is a retirement community.
Pam: So now all of a sudden I find myself in a really small home. Our home is not very big, and we do not want to get bigger because our kids are grown. Now, all of a sudden, the families are growing. I have got three children, five grandchildren, ten children, everybody comes for Thanksgiving –
Jeremy: Oh, I see this. And you want to invite them in.
Pam: Where do I put them? So they buy one to make a little money, but they also can put the family up there when they have got big holidays or summer or whatever it is.
Jeremy: I do not hate that, and I like this alternative opinion. So here is a question. At 30-50% occupancy, let’s call it 50% occupancy because remember, all of our listeners out here, we have got Pam Eisham with My Second Home and they manage second home vacation rentals, basically, right, short-term rentals. Remember that the rate that you are paying per night is high compared to like a long-term, meaning a long-term lease on a Las Palmas unit is $1400 a month. But per night, it is $150 a night.
Jeremy: So could someone cash flow and even make, not just break even, but be profitable at 50% occupancy in their unit here locally?
Pam: Locally, I think if they buy right. They have got to buy in the right place for the right person.
Pam: For example, one of the units in Las Palmas, three bedrooms, three baths sold for like 260-something.
Jeremy: Yeah, it is getting expensive. Paradise Village we talked about. I used Paradise Village for the event posting on Facebook. That stuff is expensive. Pam, who are your owners? Who is an owner? Not by name, but who would be an owner? How much time, Andy? Three minutes. Perfect. Thank you.
Pam: So who would be an owner? So, like you said, a lot of owners are from out of the area. And interestingly enough, a lot of the owners actually are maybe snowbirds themselves, so maybe they want to come for a month or two down here. So they are from Idaho, from Washington, from all over, Oregon, whatever. Right? Northern Utah. We have several from Northern Utah. But, an owner is someone that maybe they want a place to stay themselves or be able to put their kids up, their brothers, their sisters. I have people that do that all the time. Share it with the family, but they want to make a little money on the side, too. Maybe they want to cover their HOA fees or all of their power bills and stuff. They may not always cover their mortgage –
Jeremy: So all of your owners independently wealthy people who just have $500,000 to buy a unit?
Pam: Absolutely not.
Jeremy: Say it with a grin.
Pam: They are people just like us.
Jeremy: The coolest thing about rental properties as we start to wrap this show up, and the coolest part is that, so Jesse, if you have a Roth IRA or a 401K, your employer, if you had a good employer, might match it, but the issue with your Roth IRA is who funds it? Who puts the money in every month?
Jesse: I do.
Jeremy: You do. Right? The cool thing about investment properties is that somebody else pays for it every month.
Jeremy: That is the zinger. By the way, you might, a listener out there might be somebody a dual-income family and he runs a Jiffy Lube and she is a teacher at Heritage Elementary, those folks would be incredible investors.
Jeremy: And you know what is funny? Those people –
Pam: And there are a lot of them out there.
Jeremy: And a lot of them, there are, and yet a lot of them do not think of themselves as investors.
Jeremy: It is like whoa, go get a property. Pam Eisham, thank you. So how do people reach you? Tell us how they contact you.
Pam: You can reach us at My Second Home Vacay dot com.
Jeremy: My Second Home Vacay dot com.
Pam: Vacay dot com. And you can also reach us at 435-313-5143. Glad to answer any questions.
Jeremy: Okay. I am going to give it again. 435-313
Jeremy: Yep, 313-5143. Guys, thank you so much for listening. Thank you for being on the air.
Jesse: Thank you.
Jeremy: You are amazing.
Pam: Thanks for having me.
Jeremy: We are going to have to have you back, and of course, listeners, thank you. If you have got questions about your own real estate situation, buying a rental, selling a rental, or you want to give us a vote for Best of Southern Utah, visit us at Sold in St. George dot com. Sold in St. George dot com. Over and out.
Carl Wright of R1 Appraisal: Where are St. George Home Prices Going? (St. George Real Estate Radio Show)
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.
Andy: These guys have maybe the coolest theme music out there.
Jeremy: Yes, we do.
Andy: St. George Real Estate show with Jeremy Larkin. Jeremy joined today Carl Wright. Guys, I love talking about real estate. I am always kind of in the market for a different house even though I have been in my current house seven years. Maybe you can help me out a little bit.
Jeremy: Listen, I have got some stuff in the $2-3 million range I think you should look at.
Andy: Okay, can I borrow a couple of mill?
Jeremy: Here is the deal. I would happily contribute to your down payment. I cannot say what, but hey, by the way –
Andy: A couple of cows or –
Jeremy: — welcome. Welcome to the show, Andy.
Andy: Thank you, Jeremy. It is great to be here. I have been looking forward to this day for about a week. I have been here what, three times now, sitting and listening to you guys –
Jeremy: Yeah, yeah, this is –
Andy: — but Mike would never let me talk.
Jeremy: No he would not. He would not.
Andy: Now, I get to talk.
Jeremy: Last week was the famed, final, final, the farewell show. Mike is no longer with us. Is that how you say it?
Carl: That is sad.
Andy: Well, I will say this. I called a basketball game with him last night, so I know he is still with us, he is just not with us.
Jeremy: He is with us. Which game did you guys call?
Andy: Pineview Dixie. Three-pointer at the buzzer in overtime. It was a great game.
Jeremy: Wait a minute. Who won?
Andy: Pineview won it.
Jeremy: Oh man.
Carl: Oh wow.
Jeremy: See I was not, literally I was so focused in other things I did not even know they were playing last night, which is sad because I am a Dixie High graduate. And that used to be, that was the rivalry. But the rivalries now, there is a variety of rivalries. It used to be Pineview and, excuse me, it used to be Cedar-Dixie, which was –
Jeremy: — when I was young. And then it became Pineview-Dixie. And now there is, there is kind of a variety of rivalries. Isn’t there, Carl? What do you think? What do you think the real rivalry is now?
Carl: Gosh, it is, I think there is a rivalry between everybody now.
Jeremy: Your kids, your kids will go where? Crimson or Desert Hills?
Carl: We will go to the new Crimson.
Jeremy: You will go to Crimson.
Andy: Brand-new school in the fall.
Carl: Brand-new school.
Jeremy: Yeah, so it is has changed. The dynamic has changed. Three-pointer at the buzzer. Good grief. I think I just had a traumatic episode thinking about Jordan and him, the fallaway three-pointer on the Jazz in the 1996 –
Andy: Oh, flashback.
Carl: Thanks for bringing that up.
Andy: Yeah, thanks a lot.
Jeremy: Yeah, we are never going to live that down because genuinely speaking the Jazz are never, ever going to probably have that chance again. I am sorry, guys. It is what it is. It is hard to attract, hey welcome to St. George Real Estate sports show. It is hard to attract, I have said this forever. Now, I am going to beat up on my own state. I was born and raised in St. George, Utah. My father was born and raised in St. George, Utah. So we love, we love this state. We love this city. We love, but it is very hard to attract talent to Utah. Right?
Jeremy: Because the big stars are not super interested in, and can we just call it what it is, our liquor laws. Our lack of nightlife. Very much like state religious kind of predominance. They are just not interested. And that is the same for BYU and University of Utah. University of Utah has done pretty well, but at the end of the day, I love my state, but it is just hard, right, to attract talent.
Carl: True, but I have to say that Donovan Mitchell has totally –
Carl: — revitalized the sports enthusiasm —
Carl: Can I say that?
Carl: — for the Utah Jazz. I love Donovan Mitchell. I love what he is all about. His on and off the court. He is a great, great face for the Utah Jazz.
Jeremy: Yeah, and they have come along.
Andy: To illustrate your point a little bit, Rudy Gobert should be an all-star right now. He did not get it, and I think, more than anything, is because he plays in Utah and not in New York City or LA or –
Andy: — somewhere else. And that is another reason why the great talent is not going to sign –
Jeremy: Not. It is, it is frustrating.
Jeremy: That is okay. That is okay. Here we are. We are here. We are live. St. George Real Estate Morning Drive. I am Jeremy Larkin, the host of the program. I have got, by the way, if you look on Facebook it says the insanely handsome Carl Wright. By the way, the insanely handsome Carl Wright joins us to share some trends that are not being told or shared, I should have said shared, by any other real estate professionals in town. And the reason I say this, it is not that it is going to be that controversial, but it is what we have been talking about, and there is this kind of, remember when you were a kid and you plugged your ears and said I am not listening, I am not listening –
Jeremy: — to your brother, sister, sibling, cousin. There is a lot of that going on right now in Washington County. A lot of I am not listening, I am not listening, I am not listening. Gang, we are inviting you this morning to actually save yourself a whole bunch of pain in 2019 by listening to what we have to say in this program. And the question that might come up, are they going to tell us that the market is crashing? No.
Jeremy: No, but, but, right, Carl? But there is information that people need to know if they want to make a good decision this year.
Jeremy: We are happy to be here. I am happy to have Carl here. Happy to have Andy Griffin here, who is not the new Mike McGary. He is Andy Griffin, and he is going to be fantastic. You moved here from where?
Andy: I have been in Southern Utah for 25 years. I grew up in Texas. In high school, my parents, much to my chagrin, moved to Salt Lake County and I told them flat out I am not going. I am staying here. I am going to stay with my friends. But when you are 14, 15 years old, you really do not get that choice.
Andy: So they actually sent me off to a camp and moved while I was gone.
Andy: I no longer had a home.
Jeremy: You were strong when you said you were not going even though you were going.
Andy: Exactly. And then, I have been kicking around Utah. Spent one year, way northern Idaho, Moscow, Idaho on a (indiscernible) there. The thing I did not like about Idaho is the thing I love about here. The clouds rolled in October and did not leave until March. It was gloomy. It is cold out there, guys, but it is a glorious, sun shiny day. I love it.
Jeremy: It is. I am a big mountain biker. And I would happily go out this afternoon, get a beautiful ride in, put an extra layer one. It is going to be high 40s. That is a cold day, but not a big deal. Right? By the way, Bryant Head Ski Resort, I have, just so everyone knows how I operate. The Bryant Head webcam is typically pulled up on, there you go, Carl. On my computer.
Andy: Oh wow.
Jeremy: It is just always up. Bryant Head, check this out. So I was up there over the weekend. They had 10 inches Saturday night, and I thought well, that was nice. They have had 35 inches since then. So 45 inches, almost four feet. Eagle Point Ski Resort is at 31 inches. Storm total. So if you are wanting to get up there and get some skiing in –
Carl: It is a good time.
Jeremy: — or snowboarding, I have got to say –
Carl: That is the wonderful thing about St. George is that you can enjoy —
Jeremy: Right. That is why –
Carl: — you can enjoy the sunshine and not having to shovel your walks, but 45 minutes you can be on the slopes.
Jeremy: Yeah, gang, I have absolutely biked and skied in the same day in St. George.
Jeremy: Many times.
Jeremy: So you can do that, and that is kind of why I segued that. I thought how fun is this that Bryant Head, by the way, an hour and twenty up, typically I am an hour and twenty up and an hour and fifteen down. It is always just a little quicker coming down. That is pretty static. I am an 85 guy on the freeway, cruise control, and it is an hour and twenty minutes to that resort, and I am talking on a stormy day it is an hour twenty. It is just kind of an hour twenty to go up there. So check that out if you are looking for some fun this weekend, but welcome, Andy. Where do you live now, by the way?
Andy: I live in Washington City.
Jeremy: Washington City.
Andy: Yep, a new subdivision. Hobble Creek subdivision, and I have a beautiful home and really enjoy it. My only complaint is where our backyard backs up to 300 East there in Washington, so we are kind of looking to get something that is a little more secluded, a little off the busy road.
Jeremy: You know exactly what he is talking about.
Carl: I do.
Jeremy: Yeah. I know people who can help you. But –
Andy: I know you do.
Jeremy: — do that when you are ready to do that.
Jeremy: Carl Wright. Welcome aboard.
Carl: Thank you for having me.
Jeremy: Yeah, I am happy to have you. We are going to have, so this is fun. We are going to have Carl today, and then we are going to have Carl and his entire team at my office at noon. His team, our team. Carl is with R1 Appraisals here in town. By the way, I need to have you guys go measure a home in New Harmony. That is after show, but –
Jeremy: — just so you know.
Carl: Love to do it.
Jeremy: We are listing an incredible, oh my goodness, incredible home in New Harmony. We will be placing this home on the market hopefully in the next week, and amazing views. Almost 5,000 square feet. Pretty cool home. So it has an entire detached guest house –
Jeremy: — and when I went in it, it is like country home, like going into my home I grew up in with my mother. It is interesting, Carl, this is probably a great way to start this off, is they had the home on the market for six months with another agent, and they are very frustrated. Right? With an agent from Cedar City. So if you are in New Harmony, I want you to think through this. They listed the home with a guy from Cedar City because it was geographically closer by the mileage. But the issue is New Harmony is not in Iron County. It is in?
Jeremy: Bingo. So what they did is they hired somebody on the Iron County MLS to sell a home that is actually in Washington County. Now I am sure the home was on both Multiple Listing Services. And when we list your property and sell a property, we are always on Washington, Iron, and Wasatch MLS. We kind of go for the trifecta. But they were frustrated and then as we dug into this, it looked like everything was fine, and at a glance. So we do what is called a home marketing audit. And by the way, if you are selling a home right now, very quick plug, but it is not selling. That is the key is if your home is on the market and it is not selling and you are frustrated, I invite you to visit, this is kind of fun, we have a page that we have never talked about. It is called Why My Home Won’t Sell dot com. Literally. Why My Home Won’t Sell dot com. Go in there and plug in your critical information. This is not a solicitation of your listing. It is what called a home marketing audit. Maybe you are someone whose home just came off of the market, and it did not sell. Right? Let us know, and what we do is we just do an audit. And the audit is we look at three factors, which are marketing, condition, and pricing. And then, Carl, you know because you are a professional appraiser, that underneath those three, that canopy of three are probably another fifteen items. Right? So either marketing, the story that was told about your home was not compelling enough or it was not told to enough people. The condition, either the condition, the staging, or the location or all three were such that it was not compelling to a buyer. And or, and maybe all three factors were present, or the price of your home was such that either just buyers said sorry, there is something better for us at that price. Or maybe it was bracketed in a way that they did not, they did not see it. But we did this audit, and what do you think we found when we started looking through the square footage? The main floor was wrong. The basement was wrong. The upstairs was wrong. It was not reflective of a guest house. There is an entire detached guest house that is completely legal on the property that is about $150,000 to build that was not advertised.
Carl: Not presented. Yeah.
Jeremy: So it looked like everything was fine at a glance. I said, man, I do not know why this home has not sold. Then when we dug into it, so how often do you see data, Carl, as a professional appraiser that is just not accurate?
Carl: Oftentimes. Our job as an appraiser is to sift through all of the information that is out there and try to come up with a realistic value. We are looking at everything from marketing time. We are looking at the square footage. That is why we do not ever rely on what the county says or the, as far as square footage, bedroom, bathroom count. That is why we go in and we assess the property. We measure the property so we know what your square footage is. We will come up with your bedroom bathroom count. We look at your condition, the quality. We look at from your roof to your foundation and everything in between to determine how the market reacts to what components you have in your home, and then we come up with a value.
Jeremy: Okay, so this is kind of a fun question. Real estate agents, typically when they go to put a home on the market, they pull the square footage from where?
Carl: They usually use the county.
Jeremy: Correct. They just go to the tax records, and they go well, it says it is 4100 feet. How many appraisals have you done in your life, because you go out and you laser measure, you digitally measure where the square footage you actually measured in real life matched the county?
Carl: Hardly ever. It is usually —
Jeremy: Like 5%?
Carl: — maybe, I would say less than 5%. We are usually a little bit smaller –
Jeremy: Crazy, right?
Carl: — a little bit bigger than what the county says, which is, we use the outside measurements. You use ANSI standard of measurement, which means we measure from the outside corner to the outside corner. So we are usually a little bit bigger than what the county says, which is beneficial to people who are selling their home because then you get the actual square footage of what an appraiser is going to be using as their measurement, and then you can market your home at a slightly larger –
Carl: — so it behooves you a little bit to get an appraisal or have somebody come measure your home to determine what your actual square footage is.
Jeremy: Well, and Robert MacFarlane commented, good morning, Robert, it was missing almost 900 square feet.
Jeremy: And it was 6 months on the market.
Carl: That is –
Carl: Let’s just say $100 a foot, right? That is $90,000 that they misrepresented in that.
Jeremy: Yeah, so this is kind of crazy. We are doing something we have not done in a while. We are taking this property on that was listed by another agent, and they came to us after it was no longer on the market. We are raising the price.
Jeremy: And we do not do this very often, but we are actually going to, we believe that we can sell this home for more money than they were asking previously.
Carl: Wow. And that goes against the trend I am seeing right now, Jeremy.
Carl: As I have looked at the market and looked at trends, we look at, as appraisers, we look heavily at absorption rates and months of housing supply and things like that. Something very interesting that I am seeing right now is 2018, there was a perfect storm. There were, interest rates were good. It was like the jet was taking off the runway –
Jeremy: Oh yeah.
Carl: — and we built speed all the way until September about, and I was talking to my business partner, Nick –
Jeremy: This is exactly what I noticed.
Carl: — and this is exactly how Nick put it is that the jet took off in September and started to level off in September of 2018, and now we are gliding.
Carl: We are in a gliding mode right now, and we are in a transitional from being a seller’s market to a buyer’s market. We are seeing more months, more time on market. We are going from about a two-month inventory of homes to a three-and-a-half-month inventory of homes in the greater St. George area.
Jeremy: So let me throw a perspective in here. And when Carl talks about months of supply, right, or absorption rates, what he is saying is well, two months’ supply is really simple. It is how long, there was enough housing that if no one else listed a property, now I want, this is really important, if no one else put their home on the market, it would have taken two months to sell them all. Correct?
Jeremy: The simplest way to look at it?
Jeremy: Well now he is saying well now, we are at three-and-a-half. This is what throws people off. Three-and-a-half-months’ supply is still really strong market. It is a really strong market. But the issue is we are talking about the inventory going from two to three and a half. Right? Three and a half does not sound like a lot, but an increase from two months to three and a half months is a gigantic increase.
Carl: It is a big increase.
Jeremy: Make sense, you guys?
Jeremy: It is not like three and a half is a big supply. It is going from two to three and a half is a massive jump.
Carl: Yeah, and I found some more statistics. I was looking at the Washington Fields area, this is right where you live, Craig. In the Washington Fields area, I was looking at homes –
Jeremy: Or Andy.
Carl: Andy. Sorry.
Jeremy: Craig just walked out.
Carl: That is right. I am sorry, Andy. I apologize.
Andy: That is okay. No worries.
Jeremy: Craig is on his way back to Parowan to play in the snow.
Carl: Washington Fields, 2000 to 2500 square feet, the months of housing supply 12 months ago was 3.26. Right now, currently, there are 6.25 months of supply in Washington Fields between 2000 and 2500 square feet.
Jeremy: But I thought Washington Fields was one of the best markets in town?
Carl: It is one of the best markets in town, but that means everybody is trying to sell their home, and so if you are going to be competitive, if you have got your home listed right now, you really need to analyze do I really want to sell my home. If I really want to sell my home, then I probably should reduce the price by, I would say, by 5%.
Jeremy: Bingo, brother. What did I say to you on the phone when we chatted?
Jeremy: 5%. Let me share something with folks here. Carl, I have got the Multiple Listing Service pulled up. Since January 1st, have you looked at how many properties I have listed, by the way? Washington County. And of course, I should say Washington County. This includes Iron County because it is on our Multiple Listing Service. So bear with me for a second. I am going to come in here to location and I am going to say Washington County since the first of the year. Now remember, folks, when you go to sell your property, you are saying I have the best home. Hey, I looked around. I looked at every, Andy, I was over there off of 300 East in Washington, I looked around. I feel like I have the best house on the quarter mile. That is nice. Here is the issue. 724 properties hit the market in Washington County since January 1st.
Jeremy: 700 competitors. Right? Sounds about accurate?
Jeremy: That is what MLS is telling me.
Jeremy: And by the way, I am talking about homes. I am not even talking about lots. If I talked about lots and water shares, there is another how many you think? A couple hundred?
Carl: Couple hundred.
Jeremy: 724 properties hit the market in Washington County since January 1st. Right? That is 700 new competitors that came to the market. Andy, how long have you lived in that house?
Andy: Seven years.
Jeremy: So you have been there seven years. The reason I asked is that is what I thought you said. A lot of our listeners have been in their property 5-7 years, 7-10 years, because a lot of people moved into the market. Right, Carl? Like ’05, ’06, ’07, ’08. Some of them ’10. But here is what is interesting. Values have come up since seven years ago in Washington County, Carl, what percentage you think?
Carl: I think we are right around 40%, 36%.
Jeremy: Since then. Close to 40%. So while Carl is telling us a story that is accurate and he is telling the truth, inventory is almost doubling. It doubled in Washington Fields. Right? We went from three to six months. At the same time, if I had told you seven years ago that your home value would go up 40%, the home values would go up 40%, how many homes would you have bought?
Jeremy: Every one of them, right?
Carl: (Indiscernible) Right.
Jeremy: You would have bought all the $5 bills for $3 that you could have purchased. Okay?
Jeremy: Right? Which is the math.
Andy: Makes sense.
Jeremy: We are saying hey, I have got a sale on $5 bills. They are on sale for $3. How many do you want? I want them all.
Jeremy: But we did not know that. Did we?
Jeremy: So talk to me about a trend here because seven years, I would love, I love that you are in studio at seven years. What seems to kind of happen every 6-8 years, Carl?
Carl: Usually, it trends up for seven years and then it trends down. And you look at –
Jeremy: It is biblical, by the way. Seven years of famine. Seven years of planting.
Carl: Right. If you look at the trends, we crashed in the third quarter of 2007. That is when the trend started to go downward here in Washington County. And it went down until 2011. In 2012, we started the trend upward, and how it went, what is the math? Seven years. 2012 is when we started to trend upward. Now, I am not saying there is going to be a big crash. I do not think there is going to be a crash, but we are going to be gliding through 2019.
Jeremy: How many appraisals have you done? You and your company?
Carl: Our company, since we have opened up in 2008, we almost 21,000 here in Washington County.
Jeremy: We have two minutes. Two and a half minutes. I want that to settle in for people. I have got Carl on the show today. 21,000 appraisals. You might want to listen. Right? You might want to listen. Here is what is so fun for me. Everything you are saying is echoing what I have been saying, which clearly makes me feel pretty happy this morning. So 5% across the board. We feel like values are probably 5% overcooked. We have seen inventory in Washington Fields double. Where else? Where else is inventory going up? Everywhere.
Carl: Everywhere. Everywhere, but not to be alarmed. I do not want this to be people that panic and think that there is, that I need to make a huge, a 5% price reduction is not a very big price reduction.
Jeremy: If I am a seller, what do I do today because I want to sell and take advantage of a great market?
Carl: You want to reduce it 5%. It is like chasing that ball down the –
Jeremy: We talked about this.
Carl: We talked about this. You do not, you just want to get ahead of the ball. It is going to calm down. Usually, our market is spurred by the Parade of Homes which is coming up next weekend. A lot of buyers come in. So we are going to see some more buying right in the next near future.
Jeremy: 60 days.
Carl: 60 days. And so, I suspect that jet is just going to coast through 2019. I do not see a big fall. I do not see a big rise. I see it stable for the next year.
Jeremy: What if somebody says I really do not trust my agent? I want to call you and get a third-party appraisal. What is it going to cost them and how do they call you?
Carl: We have got a variety of products that we offer people from $200 to $400 for a full appraisal for a typical home. If your home is a little bit bigger, we charge a little bit more, but that will give you a full valuation of letting us come in, and like you said, give you a diagnostic of why your house is not selling.
Jeremy: Yeah, and by the way guys, we talked about this fun website. I almost forgot for a while that we had even created it. We created it years ago. When the market was crashing, we created this page called Why My Home Won’t Sell dot com. And when you go there, it is just a home marketing audit. And all you do is plug in your information, and then what we do is not a solicitation of a listing. I want to be very clear about that. We simply look at three categories: price, condition, and marketing. And we diagnose it. Right? We do an audit. I know no one likes an audit. But guess what? Would you, again, Carl, if I told you seven years ago that your value had come up, and Andy and everyone in this room, 40%, you would have said are you serious? But people want their value to have come up 45% and now they are frustrated. Are people going to miss out on this market because they are clinging onto last summer?
Carl: Yes, they will.
Jeremy: It is going to happen.
Carl: You have got to look forward.
Jeremy: How do they call you, Carl?
Carl: Our phone number is 435-627-0019. You can talk to anyone of our appraisers, me, Nick Lyman, Evan Wilkins, Jerry Johnson, Kenny Rawlings. We have got a whole crew over there that can help you.
Jeremy: Yep, R1. Literally, R the letter, 1 the number. You can Google it. Thank you, Carl.
Carl: Thank you for having me, Jeremy. Appreciate it. It is always a pleasure.
Andy: Jeremy Larkin with St. George Real Estate here on News Radio 94.9, 890, KDXU. Thanks, Jeremy.
The SINGLE MOST IMPORTANT MESSAGE About The Real Estate Market (St. George Real Estate Morning Drive Radio Show)
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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.