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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. 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?
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?
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?
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.
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.
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%.
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.
Jeremy: Do you remember the economic meltdown that we had, Jesse, and people are trying to figure out how we ever got there?
Jeremy: Home values went up in 2005 36%.
Jesse: That is nuts. In one year?
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.
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.
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.
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 –
Jeremy: — in the 1980s as it is today. In the 1990s, Jesse, where were we at?
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.
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.
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.
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?
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.
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.
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?
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.