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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 sales@gostgeorge.com. 

Mike: KDXU News time. It is 8:35. It is a Thursday. Good morning and welcome. It is also time for another edition of the St. George Real Estate Morning Drive. We welcome in the voice of St. George Real Estate. Here is Jeremy Larkin.
Jeremy: Thank you, Mike. And Robert is offended that you did not say voices.
Mike: The voices of St. George Real Estate –
Jeremy: Thank you.
Robert: I am not at all.
Mike: How about if I say Robert and Jeremy. Now Jeremy is mad.
Jeremy: Robert J. DeBry. I mean MacFarlane.
Robert: Robert J. DeBry and Associates.
Jeremy: I had the resume and I thought it said Robert J. DeBry, and I am like he is interviewing for a real estate position?
Robert: Because I am Robert J.
Jeremy: But then I looked again, and it was just Robert J. MacFarlane.
Mike: Just.
Robert: Just.
Mike: Just.
Robert: Just. Not bad though.
Jeremy: I will take it. Very good morning. Here is a fun trivia for you this morning because it is a beautiful January day in St. George, Utah. I was driving my child over to la escuela, as they say in Latino America. You guys understand, right? This school. Robert, I think you understood.
Robert: Oh, okay. Got it. That was a tough one for me.
Jeremy: I want to make sure. We are going to do a little Spanish course today. So I am headed over to Tonaquint Intermediate School and we pass Southgate Golf Course. I said, Matt, look at the golf course. And it was covered in frost.
Robert: Frost.
Jeremy: It looked like snow.
Robert: Frosty white.
Jeremy: Yeah, it looked like snow. He said man, that is the whitest I have ever seen it besides when it snowed. And I helped him understand. Gang, if you are not a golfer, do you realize, so do you know what the rule is with the frost in the morning?
Robert: I do not.
Jeremy: So they will not, Southgate Golf Club, by the way, is owned by the City of St. George. Golf Club, golf course. I think club is a little liberal. They will not let players out until the frost is off. And really the frost only has to be off on the first hole because once it is off on the first hole they send them out, and then of course, the sun is going to hit everywhere else. But that is the deal. So this morning, the second that sun hits that fairway or that first hole and green, then they will send people out.
Robert: Interesting.
Jeremy: You did not know that?
Robert: I did not know that. I am not quite as much of a golfer as I probably should be.
Jeremy: Should be. I have news for everybody. You do not need to be a golfer to be in real estate. People think that real estate agents just play golf and have lunch with friends.
Robert: Yep, I think that is it. Right?
Jeremy: I do not play much golf, and I really do not have lunch often with friends. I have lunch occasionally with clients. But I am going to get out tomorrow. So headed out, thank you to my brother-in-law. He has got free golf at Sand Hollow. Sand Hollow was just, if you guys did not see this, there was an incredible article in Golf Digest talking about, it was a feature on Sand Hollow Golf Course out there in Hurricane, out there near, Hurricane, Utah, near Sand Hollow, what do you want to call it? Reservoir.
Robert: That is what it is called. Lake.
Jeremy: Yeah, so very cool. And I will have the opportunity tomorrow afternoon to go out with these guys with my father, and it is going to be a great time. But work must be done, and we have got to sell some real estate first, don’t we?
Robert: We have to. It is not an option.
Jeremy: It is not an option. It is not an option. Gang, if you are watching us on Facebook Live, say hi. Shoot out some hearts or a thumbs up or let us know that you are there, or if you have got questions for us, we are on, this fun.
Robert: We are on three.
Jeremy: We are on three phones.
Robert: We are on three. I have got Facebook Live on mine. We have got Jeremy’s Facebook Live.
Jeremy: And YouTube Live.
Robert: YouTube, YouTube Live.
Jeremy: How do you like that?
Robert: It is a new age.
Jeremy: And, of course, we are on the radio, which you are listening to.
Robert: Thanks, Mike, appreciate that.
Jeremy: Thank you, Mike. Incredible. So check this out. If you are a YouTuber, and some folks will say yeah, I do not do Facebook Live, YouTube dot come slash Go St. George TV. G-O-S-T George TV. YouTube dot come slash Go St. George TV, and you will see us broadcasting live. Robert is running live and I am running live on Facebook.
Robert: Why not?
Jeremy: It is wild. It is wild. 94.9FM, 890AM. We are going to talk about something really cool today. So Robert is with me. Robert has been in my organization now for, pushing three years?
Robert: Pushing four.
Jeremy: Pushing four. Thank you. Jesse is over that hump. So Robert is with us. He is, I talk to him on Facebook. He is a, I actually think he is a home-pricing and home-selling expert and has been part of us now selling, I think we are at like almost 1200 homes.
Robert: I do, too.
Jeremy: That is a lot. Folks, that is a lot of properties. The average homeowner buys or sells every seven years, and of course, once they are an adult, then they are in the home.
Robert: Right.
Jeremy: It does not start at age zero.
Robert: Yeah. You know you have been selling real estate a long time when you actually, you see a home hit the market, and you are like that home looks familiar. And then you realize oh, that is because five years ago I sold that house.
Jeremy: We sold that. Yeah. It is fun, and I love to drive around and do that. And of course, I always tell my kids I sold that. I sold that. I sold that. I sold that. So it has been an interesting ride, and Robert is with us this morning, and we are going to be talking, so he really is. He is a home-pricing and home-selling expert. We are going to talk about the six pricing misconceptions that actually cost sellers money.
Robert: Is there only six?
Jeremy: There are a lot, but six is, man, I am telling you what.
Robert: It really boils down to these six.
Jeremy: Yeah, it boils down to these six, and it sounds like a lot. It is not a lot. It is really easy to digest, but this is a real issue right now because we have a lot of home owners, a lot of home sellers who are, they are aggravated right now. Why?
Robert: Mainly why because homes are sitting on the market. I was just sitting down with a client. Their home is actually for sale as a For Sale By Owner right up here on Bluff. And what happens a lot of times is for homes that were for sale by owner, they do not sell the home for a month –
Jeremy: Correct.
Robert: — maybe two.
Jeremy: Correct.
Robert: And then they reach out to a real estate agent and say hey, what am I doing wrong? So that is what ended up happening with this family over here on Bluff. And we sat down, and I noticed that in the $4-500,000 price range, the active homes on the market have been sitting there for an average of 102 days.
Jeremy: That is a long time.
Robert: That is an average, so some have been more. Obviously, some are less, but that is 106 homes sitting on the market for an average of 102 days. That is pretty –
Jeremy: Yes.
Robert: That is not typical.
Jeremy: And here is the perspective for people. Last summer, most homes under $500,000, I am not going to give any specific other than under 500, they were sold in 30 days or less, and some folks, we have sold homes that I was thinking about, a home that we sold over on, the Jenkins home on Canara in Green Springs. Pseudo-luxury home, $480,000. We had multiple offers.
Robert: Right.
Jeremy: We had two buyers competing. We sold another one in Greens Springs in Silverstone. Two buyers competing at $650,000 for that home.
Robert: And I am sure we have home builders listening to the show –
Jeremy: Yeah.
Robert: — and I bet you more now than it has been in probably the last three years, spec homes have been sitting on the market.
Jeremy: Yeah, and it is going to freak people out.
Robert: They were not having to really do a whole ton of work trying to sell those before –
Jeremy: No, no, no.
Robert: — and now it is a different game. Just to kind of, it seems like overnight.
Jeremy: It is interesting. This is so subtle that it throws people off. And so we have a lot of home sellers who are frustrated, like man, I thought it was a good market.
Robert: Right.
Jeremy: And what we want to talk about are the six pricing misconceptions that cost you money, and also reiterate that it is a great market.
Robert: The best really.
Jeremy: It is an incredible market. The market that we were in for a little bit there was actually unsustainable and was akin to giving your kid the keys to your Corvette and telling them to drive 120 down the freeway indefinitely and assuming that nothing was ever going to go wrong.
Robert: Right.
Jeremy: Okay, at some point, okay –
Robert: Right.
Jeremy: — he is going to hit something.
Robert: Yeah.
Jeremy: And that is what our real estate market was doing. It was careening out of control. You cannot have homes sell that quickly. You cannot have, look we had appreciation in 2005, remember. 36%. We all remember how that turned out.
Robert: Yeah. And I think that is probably the biggest challenge I hear more than anything is well, in 2005, and they are always going back to this, now we are looking at 14 years ago.
Jeremy: Right.
Robert: Kids that were in diapers are now driving cars. Right?
Jeremy: Yes.
Robert: That long ago. They are saying well, it was like this then. Why isn’t it like this now?
Jeremy: Correct.
Robert: And the reality is we are looking at two different eras.
Jeremy: Bingo.
Robert: Completely different eras.
Jeremy: It is two different times. So it is fascinating because I mentioned a home in Green Springs at $650,000. It was sold for another radio personality who we have mentioned on air before with another firm in town, and he was delighted when I had two buyers competing against each other to buy his home.
Robert: Right.
Jeremy: The interesting part is that there was a 30-day period where the home was actually listed too high.
Robert: Right.
Jeremy: Let’s just find out what the market will bring. And the second, the second that price was brought in line, we are going to share with folks today, Robert, that you cannot what a home?
Robert: You cannot underprice a home.
Jeremy: Not even possible. But Robert, I do not want to give my home away.
Robert: Right, and I understand that. We all understand that. Nobody does.
Jeremy: (Indiscernible)
Robert: Do you know anybody, Mike, can I have your house?
Mike: No.
Jeremy: No. No.
Robert: He is not going (indiscernible)
Jeremy: But Robert, I do not want to leave money on the table.
Robert: And we understand that. That is a valid concern. Right? Nobody wants to leave money on the table.
Jeremy: No.
Robert: So there is a strategy behind that.
Jeremy: And what we are saying is it is actually, this is incredible, I hope folks are listening who are selling right now, considering selling. Builders, you cannot underprice a home. It is actually not possible, and we are going to talk about why.
Robert: Right. Even in horrible markets, right, even in a full buyer’s market, which we are not in one, unless you are selling in the 600 and above, and really in some cases, depending on how unique the property is, that is not even a buyer’s market. Right? But for the most part, we are in a seller’s market from top to bottom.
Jeremy: We actually are.
Robert: So if you are in a seller’s market, what does that mean?
Jeremy: That means that the benefit, the advantages to the seller that there is a less supply, right, and the buyers are really hungry to gobble up the limited supply.
Robert: Yeah, it is the iPhone launch. Right? There are not as many iPhones on the market, but they are going to charge you $1200 and you are going to happily go pay that –
Jeremy: Correct.
Robert: — which is not always true, and that cannot happen forever. Right?
Jeremy: Correct.
Robert: I remember reading an article about Apple doing that, running into issues with that, and at the same time, because we are in that seller’s market, do you think Apple is like do you know what? I am really worried about selling this. Could I have asked $50 more?
Jeremy: Right. Right.
Robert: Am I leaving $50 on the table? No, they are not.
Jeremy: And this is so interesting. So let’s talk about this. Six pricing misconceptions. Okay. I am going to overview them. Is that fair enough?
Robert: Yeah.
Jeremy: So, Jeremy Larkin here. Host of the St. George Real Estate Morning Drive. And I want to share something. I do not say this to impress. It is to impress upon you, right? So 1200 homes is where we are at as a real estate group here in Washington County. If you can imagine that 25% of the contracts fall out, as a matter of fact, this last year, 19.6% of the contracts, contracts that buyers wrote on our listings, 19.6% fell apart.
Robert: For one reason or another.
Jeremy: Yeah, the appraisal came in low. The buyer got cold feet.
Robert: The inspection came back poorly.
Jeremy: The inspection came back poorly. They could not get financing. Right? Whatever. All right. 19.6%. So for us to sell 1200 homes, we actually had to sell, to put on the market, we had to deal with 120%.
Robert: Right.
Jeremy: But the reality is it was not because we probably spoke to 250 or 300% as many clients –
Robert: To get those.
Jeremy: — to get to there. Okay. So understand, folks, that we have literally had thousands, this is where the –
Robert: Yeah.
Jeremy: I am even baffled saying this out loud. We have actually had tens of thousands of real estate conversations. Tens of thousands of conversations with buyers and sellers. Okay. So, it just gives some credibility to what we are talking about here. These scenarios never change. It does not matter whether you are in Cincinnati or Miami, Florida or St. George, Utah, these are realities. Okay. Six pricing misconceptions. Your home is not worth what you paid.
Robert: Nope.
Jeremy: Well, it could be, but it is not worth what you need. But Robert, I need 450.
Robert: We all need a million dollars. Right?
Jeremy: It is not worth what you want.
Robert: Nope.
Jeremy: It is not worth what your neighbor says.
Robert: I disagree with you there. My neighbor, he knows a lot about real estate.
Jeremy: I know.
Robert: He has sold two or three homes.
Jeremy: He has sold two or three homes and he drives for Andrus Trucking, but he is a real estate expert. It is not worth what your neighbor says. It is not worth what another agent no matter how bad they want to get your business –
Robert: Yep.
Jeremy: And it is not even worth what it costs to rebuild.
Robert: I think it is interesting. You say it is not what another agent says. That includes yours truly.
Jeremy: Right. Right because do we determine the value of a home?
Robert: Absolutely not.
Jeremy: Absolutely not. So we do not make the market. We just interpret the market. So if Robert goes out or myself or one of our team and you hire us to sell your home, we do not make the market. We do not come in and say well, I think it is actually worth 425. We may say that based on all the data and that is what we do, but we do not make the market.
Robert: Right.
Jeremy: In every market, for every product, who determines value, Robert?
Robert: The buyer. That is a t-shirt. That is a cell phone. That is a car.
Jeremy: Yes, everything.
Robert: It does not matter. A burger.
Jeremy: Yep. Buyers determine value.
Robert: Always. That is the free market.
Jeremy: The greatest example on the whole planet right now, at least I think it is the greatest example, I am a Disneyland fan. And I heard 30 days ago they raised their prices again.
Robert: Yeah.
Jeremy: And it came across Facebook or something and I saw one of these blogs that is like a Disney insider’s blog. And what they said is does not matter. It is not deterring anyone. Right?
Robert: Netflix is another example.
Jeremy: Oh my gosh, right.
Robert: They raised the price of Netflix. They did a survey. How many people are going to stop using Netflix? 76% said that it was not going to phase them at all. Of the remaining piece, only 3% said they would probably stop watching Netflix. 3% and they raised it like, I think it was like, they raised it like $5 or something like that for the top plan.
Jeremy: Right. Right. So buyers determine value. And here is the point. You may say well wait, if Netflix and Disney are raising their prices, I can, too. No, what we are saying is the market is determining value.
Robert: Right.
Jeremy: So today, they said it is $190 to buy a one-day hopper to Disney (indiscernible)
Robert: I have got a sidebar.
Jeremy: Good grief.
Robert: My sister she lives up in Salt Lake. Her and her family, it has been ten years since they have been to Disneyland.
Jeremy: Right.
Robert: They just went this last week. She has got a sweet picture of the whole family all of them wearing fanny packs like it is 1980.
Jeremy: Everything is just regurgitated.
Robert: Isn’t it so funny?
Jeremy: It is 1980 again.
Robert: It is so funny, man.
Jeremy: It is Marty McFly. Right? 1985.
Robert: They were the best fanny packs. Good strong, there are six of them, all with fanny packs.
Jeremy: You know what? I think the next time I am going back I am wearing a fanny pack.
Robert: You should rock it, man.
Jeremy: And you realize they spent thousands on tickets.
Robert: They did.
Jeremy: And it is not going to deter people. So until Disney raises their price to a level that the market says oooo, now that is out of range. Right? Here is another thing. So folks, one of the challenges we have is that how many Disneylands are there? There are about a half dozen.
Robert: Right.
Jeremy: There is Disneyland, Disney World, Tokyo, Paris, are there six? Are there two more that I do not remember. Okay. Maybe that is it.
Robert: Asking the wrong guy.
Jeremy: Okay. How many homes are hitting the market every month right now in Washington County?
Robert: About 300.
Jeremy: Another three, and by the way, as many as six in a big month.
Robert: Oh yeah.
Jeremy: Three to six hundred homes –
Robert: Like the one we are coming up to. Right.
Jeremy: Right. We are in the biggest month right now. See the difference is, folks, we are not Disneyland. These are homes, and even though you love your home, and I know that you, I realize how much time you spent on the custom cabinets and the custom closet inserts, and that was important to you. Right? You put those in for your enjoyment. And Robert, did you enjoy them?
Robert: Oh, absolutely.
Jeremy: Right. Did you put them in for the next buyer to use?
Robert: No. Actually, I did not.
Jeremy: Probably no, but I read an article on home improvement and it said –
Robert: Zillow told me that I could get a $15,000 return if I remodeled my bathroom.
Jeremy: Right. So the reality is buyers will always, yeah, buyers will always determine the value. So as we walk through this. What you paid. If you paid for your home an exorbitant amount in 2005, understand that values fell in Washington County 46% since 2005, 2006, and they have come back, that was between 2006 and 11, and they have come back 42%.
Robert: Overall.
Jeremy: Overall. So we have almost gained back every bit of what we lost. But do you realize it took us five years to lose it and another almost six years to get it back? Almost seven years to get it back. So if you followed that, in 2005, values were really high. In 2011, values were really low. In 2018, values are really high, and now it is 2019. Where can we only predict that values can realistically be in the next few years? Not higher.
Robert: Or, if so, we had to weather going down to come back up eventually.
Jeremy: Right. So for our home sellers right now, what I want to articulate is there are six pricing misconceptions and when you put your home on the market at a price well, I paid this, well I need this, well I want this, well my neighbor said this, well an agent told me, well do you know what it would cost me to rebuild this day? None of it has any bearing on what your home is worth. What your home will be worth is what a reasonable buyer with funds available and the initiative to move into your home will pay in today’s market. And what I am trying to, want to make sure that we convey is that even though, even though right now, Robert, a whole bunch of your clients, my clients, in the area are frustrated saying but I thought I could sell for blank. They need to understand that the price that they need to be at, which is probably 5% lower is an amazing price.
Robert: Right.
Jeremy: Is an amazing price.
Robert: It is all perspective. It is all about perspective.
Jeremy: If someone had told them in 2011, if someone had told these people in 2011 when I was selling Hidden Valley townhomes for Fannie Mae and Freddie Mac and HUD, government foreclosures for $85,000 –
Robert: Wow.
Jeremy: What is Hidden Valley at right now? 170?
Robert: Maybe a little more.
Jeremy: If someone had told somebody in 2011, hey you know your Hidden Valley townhome that you have to sell for 85 right now? It is going to go back to 170 or 80 thousand dollars, it is going to double in value by 2018. Would have kissed me on my face if they could have had the old almanac. You know the almanac from Back to the Future.
Robert: Back to the Future.
Jeremy: If I could have predicted that, would you have been very happy with me?
Robert: Biff, I would be so happy.
Jeremy: I know you would. So it is all perspective. So even though, and the most important two words of today’s show are even though. Even though you feel frustrated today that the market will not bring quite what you want, you need to realize that the market is bringing you the, this is one of the highest price points in the history of American housing today. And what is going to have to happen is this. You are going to have to amend that price mostly as folks are. And here is the challenge. Robert, if I know you are a baseball player, and a few other sports.
Robert: Go Yankees.
Jeremy: Yeah, go Yankees. Hand-to-hand combat. I actually watched you do hand-to-hand combat that day with Creed. When the ball –
Robert: I won.
Jeremy: Yeah, when the ball, you kind of did. When the ball goes away from the field and it is rolling down a slope away from you, what is the only way to get to the ball?
Robert: You have to get in front of it.
Jeremy: Yes. So, folks, envision. You are a kid. You are chasing a ball. It is rolling down a hill, and you are lunging. Right? You are lunging.
Robert: Trying to stand. Keep standing. Try not to fall.
Jeremy: Tearing your hip flexor. The only way to stop the ball is to get in front. And so, if folks want to actually capture the highest price for their home it is important that they get in front of the ball and not be chasing the ball. And right now, we have sellers who are chasing the ball. And in six months, they are going to look back and say what?
Robert: Man, I probably just should have just made the move six months ago.
Jeremy: Yeah. But I was so convinced that I needed that extra 5%. Right? Why is it impossible to underprice a home?
Robert: Well, I think there are a couple of reasons, but the main reason why is because one you hit that price where all of the buyers know that truly there is value, because it is value. It is just like going down the street and hey milk is $3 a gallon at Smith’s –
Jeremy: Got it.
Robert: — and it is $3.50 at Albertson’s, I will drive across town to save that fifty cents. Right? I will do whatever it takes to get the cheaper value or the value I see that is actually there. So if I price it to a spot to where I know multiple buyers are in it, I am not going to wait. I am going to worry about the fact that somebody else is going to get it if I do not, and so I am going to pay 100% of what they are asking because I do not want to lose it.
Jeremy: Do you think this is true even for the luxury, the high-end market? Let’s talk to our luxury listeners right now.
Robert: Oh, absolutely. I think the luxury in this, specifically in this town, our high-end clients, the people that own second homes here or have retired here and put their nest egg in a beautiful home because we get probably some of the most amazing homes for the best value in my opinion.
Jeremy: We sure do.
Robert: In this town.
Jeremy: We sure do. We have folks come out of California and go wait a minute. $1 million for this? This was three back home.
Robert: Exactly. It is unbelievable. The biggest mistake I see happen is realtors tell them it is worth more than it really is, and the list to sales price of luxury homes is significantly different than it is even at the six, five and six hundred thousand. At 500,000, they are getting 99.9% of their asking price. At a million dollars, they are getting 92% of their asking price.
Jeremy: Good grief. You sold, okay, this is fun, I looked at this. You sold the most expensive home in Bloomington. It is the highest sale I have seen in five years. What was the sales price?
Robert: $1,070,000.
Jeremy: Okay. 1.070. Okay?
Robert: Right.
Jeremy: $1,070,000 on Jolly Circle.
Robert: Beautiful house by the way.
Jeremy: Yeah, there was some marketing that was done.
Robert: Absolutely.
Jeremy: We shot this killer –
Robert: Sweet video.
Jeremy: This video and –
Robert: We are going to put it out on Facebook.
Jeremy: Yeah, we will link it up for you. Incredible video. A guy hitting a golf ball, it is actually me, but you cannot really tell it is me unless you know it is me.
Robert: You shanked it. It actually was not even that good of a hit.
Jeremy: I actually hit it right on the green, I think. But we shot this incredible video, and there was some marketing that had to be created for this home. But no amount of marketing –
Robert: Nothing.
Jeremy: Nothing would have changed the value of that hope.
Robert: Nope.
Jeremy: But Jeremy, wait a minute. You mean that marketing does not matter? Oh I did not say it did not matter. Marketing is actually, in a lot of ways, a defensive measure. It is a protective measure to ensure that you get all of the value out of your home.
Robert: Right.
Jeremy: But buyers will not pay you more than the value. They do not say you know that video that you guys shot? That was incredible, and I am a really smart buyer that has enough money to spend a million dollars for a home. I think I will pay you an extra hundred grand because the video was so impressive.
Robert: Yeah, I was just blown away.
Jeremy: The video, right, the video was to make sure that we got them all their value. It is impossible to under price your home because if you price your home even quote below market you will have multiple buyers bid against and raise the price. Downtown St. George, Putnam’s home, you sold it for twenty grand over the asking price?
Robert: Twenty grand over asking.
Jeremy: $20,000 over the asking price because buyers bid against each other.
Robert: And in downtown St. George, they are selling for what the value is.
Jeremy: They are. Bingo.
Robert: They are not selling for an inflated value. They are just selling for what they are worth.
Jeremy: Thanks, Robert. Hey, let’s go sell some real estate today.
Robert: Hey, why not?
Jeremy: Let’s do that.
Mike: You have been listening to the St. George Real Estate Morning Drive. For more information, call 275-1690 or online find them at Sold in St. George dot com.

 

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.