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Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable! 

Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing sales@gostgeorge.com. 

Mike: KDXU news time. It is 8:35. Good morning and welcome. Southern Utah morning news. Your time once again for another look at the St. George Real Estate Morning Drive as we check in wit the voice of St. George Real Estate Jeremy Larkin.
Jeremy: Good morning, and I hope you are driving, all of you out there driving somewhere important. What time did you all get up this morning, guys? Chantry, I want to know about you. 4:30? Mike, that mic is not live and I just said Mike twice. I love it.
Chantry: How about now?
Jeremy: Mike, we have been talking about the mic. And Mike says the mic is live. All right. Love it. 4:30.
Chantry: 4:30.
Jeremy: Ouch.
Chantry: I know. Everyday. I cannot help it.
Jeremy: What time do you go to bed?
Chantry: Early. Like I am in bed by nine.
Jeremy: Okay, Mike, when did you get up? I want to know. He is not on the mic, but he is going to tell us. How early was it, Michael?
Michael: 4:45.
Jeremy: 4:45. He got up in 15 minutes, Jeriah. What have you got?
Jeriah: I cannot compete with that. Six o’clock.
Jeremy: Yeah, you know what? 6:30 for me. I have got Andy. Andy is the new guy in the studio today. We do not even have him on. Andy, when did you get up? Like seven. He was five. Okay. So he did not roll in here. Jeremy Larkin here. We have got the St. George Real Estate Morning Drive. I thought we should find out when everyone got out of bed this morning. Actually, the problem is I was not asleep, so I spent much of the last two hours of the morning thinking about, you know the psychology?
Chantry: Yep.
Jeremy: I should go to sleep. What is going on?
Chantry: Stressed yourself out. Yeah.
Jeremy: I do not know what is happening. Something must be weird. I do not know. Is the house going to cave in? Is my kid alive? This is the stuff that goes through your head. Right? Finally, at 6:30 I said maybe I should just get myself up, and that would help it. Jeremy Larkin, host of the St. George Real Estate Morning Drive. The voice of St. George Real Estate. Happy to be with you all this morning. It is raining, and it needs to be raining, by the way. We are in St. George, Utah, and if it does not rain and it does not snow for everyone who is bellyaching this morning, I am going to tell you something. There is not going to be any economic development because they are dry.
Andy: Yeah, water is a big thing. We need it for sure.
Jeremy: It is huge deal. So I have some friends, close friends and family, oh the rain. This is just the worst thing. You have to realize that in late January or February, and typically during the Parade of Homes –
Chantry: I was going to say it is going to wait until the parade, doesn’t it?
Jeremy: Typically, during the Parade of Homes it is going to rain for three straight days, but these are these soaking rains that give us the moisture that we need to run this community. So we are happy to do it. Today is January 17, 2019. I do not know how many times you all put 2018 so far on whatever your putting dates on, but I have definitely had a couple.
Chantry: Oh yeah, lots of times.
Jeremy: Well, yeah, you are doing mortgages. I have got Chantry Abbott here who is one of my very close friends and just an absolute amazing home mortgage lender. Someone who, he and his team, Steven Stout and the people at Guild Mortgage, they help people get the money they need so they can buy a home. And I have been having such fun discussions with my kids lately, my 12 and 13-year old. Because they will be like, Dad, how do you buy a house? What a great question. Dad, you do not have $300,000 laying around, do you? Well, no I do not. And then I get to talk about –
Chantry: That is cool.
Jeremy: Right.
Chantry: I have not done it for a while, but even a handful of years ago I had a college professor that taught finance. I would go teach him about credit even at the college level. That was kind of fun.
Jeremy: Oh yeah, it is. Right?
Chantry: Even now, adults do not have a clue yet still. Unless you have bought one, there is just no way to know.
Jeremy: There is no way to have any real kind of concept of that. So I have this conversation with my boys. Well, no, most people, some do, what percentage of deals are cash right now?
Chantry: I have heard like 40%. It is a lot.
Jeremy: It is a lot.
Chantry: We are always higher. The national average is probably more like 25.
Jeremy: It is a lot of cash deals, man.
Chantry: Southern Utah has always been high, right. Just because it is a big retirement, selling homes in California, it has always been a high cash market.
Jeremy: Right. Right because, and Jeriah says he is surprised. And if you think about this for a minute, gang, and we are going to introduce him better momentarily. A lot of these folks they have a home. Regular people, ooops, I knocked that right off. Regular people have a home in California. A regular home. Like regular folk, as they say. They buy a house for $250,000, $450,000. It now appreciates to $850 or a million and they go to sell it. They have been paying the mortgage down for 15 years.
Chantry: Yep.
Jeremy: And they show up in St. George with $500,000 in their hands. Right?
Chantry: Yeah.
Jeremy: And they look, it is different than you think. And they look really rich. Like man, these rich buyers from California. A lot of these people are regular people just like me and us and our listeners. These are not people who are so independently wealthy. They are just folks who bought at the right time, they held real estate. We have been talking on this show for five years that it is such an incredibly better decision. Chantry, you probably heard us talk about, maybe you have been on here, the average net worth of a homeowner over 60 years old, over 64 years old is $300,000, and the average net worth of a renter over 64 years old is five grand.
Chantry: Wow.
Jeremy: That is what Keeping Current Matters put out.
Chantry: When you speak about the average, a lot the California people –
Jeremy: There is no net worth.
Chantry: The average buyer typically what we see is they are retired on a pension. We get a lot of firefighter, retired policemen, school teachers, five grand a month pensions, not very good in Southern California, but here it is pretty good. They can do well.
Jeremy: Yeah, you are not doing anything in Southern California.
Chantry: So that is what happens is –
Jeremy: That is your property taxes.
Chantry: — they have to change.
Jeremy: So I have got Chantry Abbott here with Guild Mortgage. We have got Jeriah Threlfall. I love saying your name, and everybody does. I got up this morning and I just said it a lot of times so it could be easy. He is with St. George Economic Development. Do we call it the Economic Development Council anymore?
Jeriah: Yeah, sometimes we do. Economic Council office. Anything works.
Jeremy: I am going to put into my English, and I am going to let him correct me. But these guys work with really pushing healthy growth for St. George, and what we are talking about is economic development. Right? Bringing businesses in, especially value-added businesses. I am going to have define that momentarily for our listeners.
Jeriah: Okay.
Jeremy: And the reason I speak with fluency, right, because, you might remember, but my first career was with Gilbert Jennings and Larry Gardner. That was my first real career doing Fort Pierce Industrial Park. I got a lot of experience at the time. Scott Hershey. But these guys are looking to bring commerce to Washington County, jobs to where we live. So define value added, Jeriah, for us. What a value-added business is.
Jeriah: To keep it simple, historically, we have always looked for people that make something in our area and then it sell it to someone outside of our area.
Jeremy: Beautiful.
Jeriah: Just a really dumb-downed version of value added. We try to look for people who are not competing with established businesses in the area, and then recently, we have expanded as well. We are also looking for professional. We are having some good success going and recruiting, for example, like small engineering firms out of California.
Jeremy: Cool.
Jeriah: Need a place to relocate. It is interesting you were talking about a pension. Five thousand a month pension does not do as much for you in California as it does here. We have got companies where their engineers are making $160,000 a year –
Jeremy: Good grief.
Jeriah: — and they cannot buy a house.
Jeremy: Yeah.
Jeriah: And they live four hours from the coast. It is not, they are not trying to buy a beach house.
Jeremy: Yeah, they are not on the water.
Jeriah: They are in a climate that is almost exactly like ours. Kind of a high desert. They cannot afford. The older, the people who have been at the company 20 years or so, they have their houses. They are okay. But the people coming out of college, unless the husband and the wife are engineers, they cannot buy a house at $160,000 a year.
Jeremy: Is that wild, Chantry?
Chantry: That is wild. Yeah. How many people in St. George do I meet that are making $160,000 a year? That is very few.
Jeremy: How many? How many a year? What percentage?
Chantry: A handful. Less than 1%.
Jeremy: Less than 1% that come through your mortgage office are making 160. Combined incomes.
Chantry: Yeah, probably combined household. Yeah.
Jeriah: Yeah, one of the companies that we have been working with is in Paso Robles. I think their median home price is like 675.
Jeremy: Yeah.
Chantry: So 675, what would you say ours is?
Jeremy: 300.
Chantry: 300. So yeah, more than double.
Jeremy: They might see 330 but 300 realistically. Because the median is the middle. Right? And Jeriah makes a great comment here about value-added companies. So for instance, Olive Garden is not a value-added company. Right? Because it is almost like to tell people, show people what it is not.
Jeriah: Right.
Jeremy: Talk to me about a company that is coming to St. George. Let’s talk about the economic summit from a week ago and then we can put this in perspective.
Jeriah: People who are coming right now? We have got a lot of people we are working with that we are still under confidentiality agreements with.
Jeremy: Okay, what type of business?
Jeriah: If you look at someone who presented at the summit was Ram, the Ram Company.
Jeremy: Okay.
Jeriah: Textbook. They are value added. They make their solenoids and their aircraft parts and all these things and they sell them all over the world. So they are taking money from other local economies and bringing it in to our economy.
Jeremy: Versus coming in and saying well, we are competing with all the other companies locally. They are really not.
Chantry: So value added, let me understand that one more time. They do not compete with somebody local.
Jeriah: They can and still be value added. We try. We are not going to go recruit someone who does the same thing Ram does.
Chantry: Ideally, not competitive, but (indiscernible)
Jeriah: For us. Yeah.
Chantry: But the main thing is they are exporting outside of our area, so they are bringing money into Washington County that Washington County is not paying for.
Jeriah: Fresh dollars.
Jeremy: Yeah.
Chantry: Wow. That is cool. I love that, too.
Jeremy: I love that. Fresh dollars. That is a good way to say it.
Chantry: I have known Jeriah for years. I have been to the Economic Summit for years.
Jeremy: You did his mortgage loan. Right?
Chantry: Yeah.
Jeremy: He did. Yeah.
Chantry: And we get this all the time. I get this all the time.
Jeremy: Even Jeriah had to borrow money to buy a house.
Jeriah: Just a little bit of it.
Chantry: People always say I wish St. George would get some jobs. It is like it is not lack of effort. It is just probably a long road.
Jeriah: It is.
Jeremy: Sure.
Jeriah: It is, and it is interesting that when the economy is down people are nervous to make a move because they are like things are down right now. And right now, we are facing the battle that the economy has been good for so long that people are afraid it is going to go down. And so, time is huge. We have got companies that have relocated to the area. Most of them have made initial contacts with us two years before. Sometimes you get a really quick one on a smaller-sized business, but we have got 13 projects in our pipeline right now.
Jeremy: Whew.
Chantry: What do you guys do to help the company?
Jeriah: It depends on how sophisticated they are on their own end. If they are a bigger company, they will have their own, like Family Dollar that just recently came here. They have their own site selection team. So, we help them. We make connections for them. We help line up state incentives, local incentives, anything we can do to help.
Chantry: So some of these companies can get state government incentives or local –
Jeriah: Right.
Chantry: — money to help them come here.
Jeremy: And this is kind of cool. I am just throwing a thought in here. So, Family Dollar comes to down. Do you remember what they spent on that land? I am trying to remember. It was a ton.
Jeriah: It was a lot. It was right before my time, but it was a lot.
Jeremy: It was. So they come into town. They buy the land, which pumps tons of money in the economy.
Chantry: Yeah, think about how much that cost you.
Jeremy: They built this massive facility, which pumps tons of money into the economy. They create jobs. Right? Which is creating jobs. Then the facility is now using, has usage, uses things. It uses power, and of course, one of the number one reasons that these companies go to Fort Pierce is, Jeriah, drum roll, please.
Jeriah: Cheap power.
Jeremy: Cheap power.
Jeriah: Very reliable. Very good power.
Jeremy: Cheapest or second cheapest power grid. Was that what I remember?
Jeriah: In the nation. Yeah.
Jeremy: In the nation. Is that crazy, Chant? Dixie Escalante.
Chantry: So that is a big reason that they are coming.
Jeremy: Huge reason, man.
Jeriah: We are working with a company right now that is in Southern California. On this on, southern California helped us by taking their building for eminent domain.
Jeremy: They kicked them out.
Jeriah: So they are in a building they do not like right now. But yeah, just what we can safe them in power will cover the lease on a building here.
Jeremy: Could you imagine? Think about that. Just what they save in power, and that is Dixie Escalante right out there on Brigham Road in Bloomington.
Chantry: So I am just a mortgage guy. That is all I have done my whole life. I do not know any of this stuff. That is really interesting, I think, for the average person that is not involved in the development to think that the county is actually trying to give money, finding ways, grants, to bring these businesses. It is a tiny, tiny investment for the return the county is going to get probably.
Jeremy: Correct.
Jeriah: The way I think about it is 90% or more of all incentives that are given are actually just a return on the property tax that they are going to pay. So you take a vacant piece of land and whoever owns it is paying $2000 a year on property taxes. Making up easy numbers.
Chantry: Because they are just being taxed on the value of the land –
Jeriah: Right.
Chantry: — which is not a lot.
Jeriah: Then you go throw a million-square-foot building for Family Dollar –
Jeremy: A million square –
Jeriah: — and all of it that entails and all of their equipment and everything, and now, they are not only paying $2000 in property tax. Maybe they are paying $100,000. So the incentive actually isn’t cash typically out of anyone’s pocket. They pay that property tax and say we, however it gets approved. I think each project, depending on the jobs they bring it and everything—
Jeremy: Right.
Jeriah: They may get 20% of that property tax back for the first five years. So it is not even new money. It is not taking –
Chantry: That is crazy.
Jeriah: — money out of our coffers, so to speak.
Chantry: The crazy part is we are making our money back on the property taxes. You did not even mention that. You mentioned jobs and employment –
Jeremy: Yeah, property taxes.
Chantry: — and building the building and all those other cool things that go along with it.
Jeriah: The companies that, I say we, Scott was here forever.
Jeremy: Sure.
Jeriah: For those that know Scott Hershey. He was here for 20, 21 years before I came in when he retired. The companies that our office has brought in over the last 25 years, the property tax, we went through just for fun once and added it all up, and then allocated it out. And for example, just those companies that we helped, let alone all the rest, contribute about $750,000 a year to the school in property taxes.
Chantry: And all property taxes are county-driven, right? Each city gets a little click, but you are mostly talking about the county?
Jeriah: Yeah, so the county gets, say out of this, I cannot remember the numbers. I should have brought them. Say it is a million dollars, just for easy, that these companies that we brought in pay in property tax per year. The county would get about $20,000 of that. Most of those companies are located in St. George, so they would get about $75,000 say. The school district, the library, the mosquito abatement gets like $2000 a year. All the different tax amenities, the water conservatory district gets some. Any taxing entity gets their portion –
Chantry: Very cool.
Jeriah: — and that is all set by, that is all pre-set.
Jeremy: Right.
Jeriah: When you look at your, when you get your property tax bill, you can go and look at the same thing. It says right on it what percentages, what multiplier, how much goes to the school district, how much goes to the –
Chantry: Jeriah is the monopoly man on a county level.
Jeremy: He is. He actually is. Utahopoly or whatever it is. You guys, I am going to ask both of you. So Jeriah is with, of course, St. George Economic Development. Chantry Abbott is a great lender here in town, and Chantry was at the economic summit last week. I was not. I was here. So give me the highlights. What do you feel like the highlights were? And Chantry, speak up, too, because you attended.
Jeriah: For me, the highlight was all the technology worked and there were no glitches because that is what I sit there and worry about the whole time. If the mics quit working or everyone has videos. It just stresses me out.
Jeremy: How many people attended, by the way?
Jeriah: About 900.
Jeremy: So you have got 1000 people almost. All of them on their phones. All of them on the free wi-fi.
Jeriah: Yes, we have issues before but the Dixie Center has upgraded and it went flawlessly this year as far as the technology goes. But I really felt like the keynote speaker in the morning, Shawn Nelson, the CEO of Lovesac –
Jeremy: Lovesac.
Jeriah: — just absolutely killed it.
Chantry: He nailed it, man. It was awesome. I loved it. He was my favorite part, too.
Jeremy: People said he was great.
Chantry: He is just very like super down-to-earth guy. Even kind of had some funny photos. You know the 10-year challenge that is going around right now?
Jeremy: Yes.
Chantry: Before the 10-year challenge last week, he had like three photos of him of when he was on, in fact, he was on a show with Richard Branson.
Jeriah: Yeah, the rebel billionaire.
Chantry: And he actually –
Jeriah: — with the bad hair. He kept saying –
Chantry: He wore it and had like, I want to describe whose hair, but I, it is like bleached, really long, like down to his shoulders, kind of a chubby-faced looking 20-year-old basically when he started this thing. It was cool.
Jeremy: Oh man. Boy-band hair.
Chantry: Yeah, and he is just making fun of himself, just really easy going.
Jeremy: Who are we talking to? It is his brother-in-law. Who are we talking to this week?
Chantry: Jeremy Back.
Jeremy: Jeremy Back. Thank you. It is Jeremy Back’s brother-in-law. Jeremy Back is my, really the only other Jeremy really in real estate right now, and the CEO of our brokerage.
Jeriah: Okay.
Jeremy: It is his brother-in-law. Classic. Okay, so Shawn Nelson was awesome with Lovesac.
Jeriah: Yeah, he really was amazing.
Jeremy: What is a takeaway from him?
Jeriah: His message is incredible as far as the sustainability of their business model. But the thing that I got the most I went home and told my kids that are little, inspiring entrepreneurs is that he never gave up. His first order was for 12,000 lovesacs, and he did not have a way to make them. So he went and got an agricultural loan and bought a tractor and a haybuster and used that to shred foam. So he got a USDA agricultural loan, drove it to downtown Salt Lake, parked his tractor outside the building, ran a pole in so he could turn the haybuster and shredded foam to make this order.
Jeremy: This is so good, man.
Jeriah: He had to put a ticket to Shanghai, China on his credit card so he could go order the fabric.
Jeremy: Right.
Jeriah: He did not know he could speak Mandarin Chinese thanks to his mission.
Jeremy: Yeah.
Jeriah: So he was able to negotiate better than the average 20-year old.
Jeremy: Oh heavens.
Jeriah: It was incredible.
Jeremy: This is good.
Jeriah: It was a great story.
Chantry: Same thing and then I think the order wanted, the first company wanted a $60,000 deposit, which he did not have $600.
Jeriah: Right.
Chantry: For the order. Right?
Jeriah: To the factory, the Chinese factories.
Chantry: He said well I am Lovesac, and I have never had to pay a deposit.
Jeremy: He put it out there.
Chantry: And they thought wait a minute. So they gave him the money because he just acted like he had it figured out.
Jeriah: The factory needed 60,000, so then he called the people who placed the order and he said yeah, I need the 60,000 deposit. They are like we do not do deposits. He is like well we have never done one without a deposit.
Chantry: I am Lovesac. I have never done a deal without a deposit. Which is true because he had never done a deal.
Jeremy: This is pretty funny.
Jeriah: He kept saying we are the best not beanbag company in the world. It was like him and his cousin.
Jeremy: Wow. I have to tell you that it is super helpful to me just a couple of thoughts you just shared there.
Chantry: And the journey he went through I think was the point Jeriah was making. Knowing how hard it was, would you start over and do it again? I do not know. It was, was it 20 years in the making and he has had a lot of, he has failed a lot of times and had a few really crazy successful moments.
Jeriah: Yeah, he showed pictures of the Lovesac Limo and then the restructuring and then the ups and downs. But the thing that I kind of relate everything to my kids and how interested they are in things. And the thing that I told them that I was really impressed with is that he had an idea and he got off the couch and did it. And that is his slogan is get off the couch, and it makes sense because get off the couch and onto a Lovesac, but it is also a life creed. How many 18-year-old kids, he tells it he was just sitting around eating a bowl of Captain Crunch like a week after school, and he was like how cool would it be if I had a beanbag that was as big as from me to the TV? And then he was like I am going to get in the car and go to Joann Fabrics and make a big beanbag.
Jeremy: We are going to do it.
Jeriah: And now he is the CEO of a publicly-traded company based off getting off the couch for that one good idea.
Jeremy: Yeah, a northern Utah kid.
Jeriah: Yep.
Jeremy: Born and raised in Utah at the risk of the risk. A Mormon kid. Right? They are not Mormons anymore. It is the Church of Jesus Christ, but truly a local kid. Not Richard Branson. Right? Not Bill Gates. Not Seth Godin, one of the great thought leaders that we follow. Because it is always somebody else. But what he is saying well, not really. Why does it have to be somebody else?
Jeriah: Yep.
Jeremy: Why can’t it just be anybody right off the couch right here? So what other highlights from the summit?
Jeriah: That was my favorite. Do you have anything you want to say?
Chantry: How many people normally do you have? It seemed, I have been to a few and it seemed sold out. It was awesome. A great turn out.
Jeriah: Yeah, we have been growing. We sold about 70 more tickets this year than we did last year. We are about the maximum.
Jeremy: You almost sold me one. Well, Dixie State D1. I do not want to miss that.
Chantry: Yeah, that is cool.
Jeremy: Dixie State announced they are Division 1. It was pretty cool this morning on my way, I live right downtown, Jeriah, close to our office. I am by Town Square, so I take a kid to Tonaquint and then I take a kid to Dixie Middle, and then I come back up to the show. It was fun to see the one up here with the light where the D was not lit up and then you could see the one was completely temporary.
Jeriah: Yeah, it was pretty exciting.
Jeremy: Right. So Dixie State is going Division 1, which, what does it really mean for the university and the town? In a simple overview. Better athletic opportunities, of course, and athletics in college is money to the college.
Jeriah: For me, and I do not speak for the whole university or town or anything obviously, but for me, I think it validates it. There is no higher level –
Jeremy: Right.
Jeriah: — and so we all have believed in Dixie State University clear back when it was the high school, the junior college, the everything in between. The thing that I am excited is to be able to watch them compete against the top level in sports or anything else.
Jeremy: Right, and just for fun, Division 1, just because I know a lot of out, I know you are a sports fan, but a lot of listeners would not know this. So to give you perspective, when we are talking about Division 1, here are your top five ranked football teams – Alabama, Clemson, Notre Dame, Oklahoma, Georgia. That is Division 1.
Jeriah: Right.
Jeremy: So even the non-sports fans are like oh, that is Division –
Chantry: We are one of those.
Jeremy: — yeah.
Chantry: Dixie is one of those now.
Jeremy: We are going to get killed in the short-term at sports.
Jeriah: At first. Well, the nice thing, I was at, they announced that on Friday at the university and they had all the student athletes come.
Jeremy: Cool.
Jeriah: And I was just standing there waiting to talk to somebody, and I heard a couple of the athletes talking about now they are Division 1 athletes and just the pride that they felt in that, that they get to compete at that level for the next four years.
Chantry: That is a good point because if you are high school kid, you want to be able to say hey I went D1. It is top, top level. That is cool.
Jeriah: Yep. I think it is a great thing. It is a great opportunity for all of the students. It is a great opportunity for our town. For me in economic development, it is huge too because anything you can do to get outreach and get some notoriety, and people ask questions like that. It is not, the number one concern is is my business going to be profitable? Can I succeed there? But then right away, they typically go to the university and the culture that it brings.
Jeremy: Yep.
Jeriah: That is where you are going to get most of your plays and your concerts and your sporting events and all of these things and being Division 1 is going to be a good thing for us.
Chantry: So what Division 1 schools are there in the state? BYU? Utah? Weaver? Logan?
Jeriah: Yep. SSU.
Chantry: SSU is D1. And then Dixie.
Jeriah: Utah Valley.
Chantry: They are D1 as well?
Jeriah: Yeah, so we will be in their conference now. And that is the amazing thing is when this started being talked about, we –
Jeremy: Ten seconds.
Jeriah: Because no one thought we could get into a conference and we got –
Chantry: How cool.
Jeremy: By the way, I was a Dixie State graduate when it was a two-year college.
Chantry: Same here.
Jeremy: Got my associate’s degree. You got your associate’s degree.
Chantry: Yep.
Jeremy: Jeriah Threlfall, thank you, man.
Chantry: So cool.
Jeremy: Chantry Abbott, thanks for being in here. Folks, Mike is going to give you some contact information if you have got real estate questions. We will help you in 2019. Thank you.
Mike: Thanks for joining us. If you would like to know more about St. George Real Estate, give them a call at 275-1690 or Sold in St. George dot com.

 

Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable! 

Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing sales@gostgeorge.com. 

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

Mike: All the time.

Jeremy:  So batteries actually die on these things –

Chantry:  Only when you need it though.  Right?

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

Chantry:  Good morning.

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

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

Jeremy:  Got it.

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

Jeremy:  Oh man.

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

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

Chantry:  Yeah.

Jeremy:  Something like that.  It is pretty fun.

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

Mike:  He is sold.

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

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

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

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

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

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

Chantry:  So that would be a week from tomorrow?

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

Chantry:  Right.

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

Chantry:  Yeah, how do I deal with that?

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

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

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

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

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

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

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

Chantry: I could sell some houses out there.

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

Chantry:  Yeah, hundreds. Yeah.

Jeremy:  Hundreds of clients.

Chantry:  Families.

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

Chantry: Yeah.

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

Chantry:  It will be 13 when the calendar turns.

Jeremy:  Thirteen.

Chantry:  Crazy.  It was 2006.

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

Chantry:  Yeah.

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

Chantry:  That I did.

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

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

Jeremy:  Oh beautiful, beautiful.

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

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

Chantry:  Sure, yeah.

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

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

Jeremy:  For sure.

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

Jeremy:  It was weird. It was ridiculous.

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

Jeremy:  Yeah.

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

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

Chantry:  Not good.  Yeah.

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

Chantry:  Sure.

Jeremy: Right?

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

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

Chantry:  Yes.

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

Chantry:  Sure.

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

Chantry:  Yeah.

Jeremy:  In Manhattan.

Chantry: Wow.

Jeremy:  Not in New York City.  Right?

Chantry:  Yeah.

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

Chantry:  Right.

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

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

Jeremy:  Right.

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

Jeremy: Yeah.

Chantry:  So if you are heading south –

Jeremy:  It is.

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

Jeremy: That is a great point.

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

Jeremy:  No, not at all.

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

Jeremy:  It is.

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

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

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

Jeremy:  Yeah, let’s do.

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

Jeremy:  Oh, for sure, I do.

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

Jeremy:  So what would he do?

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

Jeremy:  Right.

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

Jeremy:  right.  Right.

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

Jeremy:  Not a chance.

Chantry: They never even thought –

Jeremy:  Not a chance.

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

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

Chantry:  Oh, that is weird timing, right?

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

Chantry:  Yeah, exactly.  Right.

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

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

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

Chantry:  Right, yeah.  It sounds really –

Jeremy:  These are not $300,000 homes.

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

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

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

Jeremy: Yeah.

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

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

Chantry: About four and three-quarters.

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

Chantry:  Somewhere in there 5% —

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

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

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

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

Jeremy:  Okay.

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

Jeremy:  This is crazy.

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

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

Chantry:  Yeah.

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

Chantry:  Yeah.

Jeremy: Really is 300.

Chantry:  Take out the extremes.

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

Chantry:  $15-1800.

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

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

Jeremy:  So we are four –

Chantry:  I am going to do the math.

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

Chantry:  Oh yeah.  Words –

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

Chantry:  It is about 500 actually.

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

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

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

Chantry:  Right.

Jeremy:  — in the last 30 days.

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

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

Chantry:  Yeah, yeah.

Jeremy:  We are always six months behind.

Chantry:  Yeah.

Jeremy: Now here is the reality –

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

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

Chantry:  Yeah.

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

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

Jeremy:  I will do it at 325.

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

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

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

Jeremy:  Right.

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

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

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

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

Chantry:  Yes.

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

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

Jeremy:  Okay.  All right, man.

Mike:  (Indiscernible)

Jeremy:  There is a dude ranch vacation.

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