Episode Transcript
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Speaker 1 (00:00):
Good morning, and welcome to the Home Solutions Show. This
is your host, Andy Keel with the Win three team
powered by Epic Realty, and I'm joined today by Jerry
Sunt with Cross Country Mortgage.
Speaker 2 (00:13):
Morning. Andy, how are you very well?
Speaker 1 (00:15):
How are you doing, Jerry?
Speaker 2 (00:17):
You know I'm doing great? Thank you great.
Speaker 1 (00:20):
Well. We certainly have a lot of things to talk
about this week, a lot in the news. Just on
a personal note, I just got back from a nice,
short little trip to Jamaica this week, so I'm feeling
pretty refreshed. And met with a bunch of real estate
investors down in Jamaica for six days, so that was
a whole lot of fun. I had some time in
the ocean, did a little scuba diving, had a really
(00:41):
good lobster, so that was a whole lot of fun.
Speaker 2 (00:44):
And the weather was the weather perfect.
Speaker 1 (00:47):
The weather was pretty perfect. I forgot what humidity is like,
but that passed the humidity. It was great.
Speaker 2 (00:53):
That's awesome.
Speaker 1 (00:55):
So we've got a lot of the news with interest
rates this week, so let's talk a little little bit
about that.
Speaker 2 (01:01):
Yeah, so the big news that happened this week, because
there was one piece of news that is now covering
all the headlines which are will this weekend, and then
the other is one that was kind of quiet and
behind the scenes but actually has a bigger impact. So
the headlining news had to do with the employment report
that came out on Friday, and basically there was one
hundred and forty three thousand jobs created and it was
(01:23):
estimated to be one seventy so it was weaker than expected.
But you know, the underlining news is that the unemployment
rate dropped from four point one to four so that's
you know, stronger than expected. And the months of November
and December revised one hundred thousand jobs were created higher,
so again that's more inflationary than expected. But the basic
(01:47):
trend line is that the overall in the January of
every year, the Bureau of Labor Statistics goes ahead and
revises their number for the entire year, and for twenty
twenty four or the number was revised down to I
think it was one hundred and sixty three thousand jobs
per month, which was much lower than what was originally indicated.
(02:09):
So it basically shows that the although the employment situation
is strong, it's definitely not improving and it's getting a
little weaker, which is what the FED has been talkeding
about and basically gives the FED room to not have
to raise interest rates or drop interest rates anytime soon
because the employment situation just chugging along. Well. So that
was the first big data point. The second and I
(02:31):
think more valuable debt point data point that came out
is the new Treasury Secretary, which is Scott Besnett, is
a in my opinion, is just an incredible mind and
one of the most intelligent people that I've ever listened to.
And you know, he and President Trump came out and
made an announcement that their goal in the short term
(02:53):
is not to get the FED or to have the
FED cut rates, but actually to get the yield on
the tenure lower. And what is that directly effect that
directly affects mortgage rates and housing and so for you know,
for the Treasury Secretary and the President to both make
this announcement and say that this is what they're going
to be working on on things to get the ten
(03:15):
year yield lower, it made the ten year yield drop
literally to the lowest level in the last three months,
just like that. Over within a few minutes. It went
from in the four point six basically down to four
point four to five, so dropped about fifteen basis points,
and that tells us that we should see lower yields
(03:35):
throughout the year, and that means lower mortgage rates. So
now everyone's kind of revising their plans of where we
see mortgage rates to be by the end of the year,
because you know, economists love to change their forecasts, and
now you're looking at rates could be in the high
fives by the end of twenty twenty five. So it
does feel like help is on the way. Of course,
there are a lot of things that go into these forecasts,
(03:58):
but it looks like we will see lower mortgage rates
throughout the spring and summer and throughout the year. So
I thought that was very positive. And really it's now
we're heading into the spring buying season. You know, we've
always said right after Super Bowl Sunday, which is today,
is what kind of kicks off the spring buying season.
And now people should see lower rates in the coming months.
Speaker 1 (04:20):
Yeah, that's certainly a very welcome sign at least of
what's to come with that announcement and actually having the
market react that way. So finally a little bit of
I don't want to say common sense, but looking at
the ten year treasury as opposed to just the Fed
funds rate, because that's so much more impactful for the
mortgage rates.
Speaker 2 (04:39):
Yes, exactly.
Speaker 1 (04:41):
So we've got actually a lot of data to talk about.
Speaker 2 (04:44):
Day two.
Speaker 1 (04:45):
We have some of the January numbers that have come in,
so I'd like to talk a little bit about what's
going on with the market statistics in Tucson. So just
crunched some numbers for the month of January, and typically
like to break down. We look at the number of
new listings that have come on the market, and then
we break it down by single family homes in various
(05:07):
price ranges. So sure, here's what we have. So as
of Friday, when I pulled this data, we have four thousand,
two hundred and ninety two homes. And again I don't
go with the entire MLS. I draw a big square
around kind of the greater Pima County Tucson market area
just for reference here. But as of two seven, we
(05:30):
have four thousand, two hundred and ninety two listings, which
is up a little bit from last month, a couple
hundred from the previous month. We have three thousand three
hundred and sixty three single family homes listed, again up
a little bit from last month. The end of twenty
twenty four, Going into twenty five, we're at about thirty
(05:51):
two fifty then up to two hundred and fifty thousand,
there are forty nine homes available, which is actually a
bit down prize. The lower end of the market tends
to be what is selling because that limited supply. As
we get up to three hundred thousand, we have two
hundred and eighty one new listings, also down from the
previous month. Up to four hundred thousand, we're at fourteen
(06:14):
hundred and eighty four new listings, again down from the
previous month. Then as we get to that up to
a million, we're at three thousand and fifty two, which
is now up from the previous month. As well as
homes over a million, we're at three hundred and fourteen,
which is again up from the previous month. So not
not a whole lot of surprise there month over month data.
Speaker 2 (06:38):
I do think it's important though, to note to note
that you know, overall we're seeing inventory rise. Would you think, okay,
that's getting back into a normal marketplace, But when you
look at closely at that data. What's really the inventory
that's increasing is on the higher end of the curve.
You know, you're four hundred to five hundred thousand dollars
homes and above, not the you know, the first time
(07:01):
home buyer market, and so that's where the inventory is creasing,
is increasing as those higher price points.
Speaker 1 (07:09):
Yeah, and that certainly shows true for the new listings,
But as we get into the sales, there's some interesting
data with that higher end of the market again too.
So now I'm looking at the sales for the month
of January, and no surprise, we're down a little bit
comparatively speaking from December. But we're looking at nine hundred
(07:30):
and sixteen listings sold in the month of January, a
single family seven hundred and thirty nine. Up to the
two hundred and fifty thousand, there were fifty seven sales,
which is actually up twelve sales from the previous previous month.
Up to three hundred, we've had one hundred and forty
six sales, which is down a few actually pretty significant
(07:52):
difference here we get up to four hundred thousand, there
was three hundred and eighty sales in the month of January.
As opposed to four FO one hundred and eighty in
the month of December. So this is some of the
normal seasonality we tend to see this time of year,
but there's some indications that we are getting a little
bit of a slowdown until we jump over over a million.
Speaker 2 (08:14):
Yeah, and Amy, I always have to, you know, caveat that. Yes,
January is the slowest month of the year, but typically
it's the slowest month of every.
Speaker 1 (08:22):
Year, very much the case, and I have some other
data on that that'll share in a moment here as well.
I did find this interesting that we did have thirty
eight over a million homes sell in the month of January,
which is actually up from the month of December, and
up pretty significantly a year over year. So when we
(08:45):
go back to last year at the same time, we
had about twenty eight homes sold, we're up to thirty
eight at the same time this year year over year,
so that's a pretty significant jump. I mean, ten homes
doesn't seem to make a lot of statistics significance when
you're talking ten homes between twenty eight and thirty eight,
but tells me that that high end market is still
(09:07):
is still doing okay.
Speaker 2 (09:08):
Don't tell it along. Yep.
Speaker 1 (09:11):
Yeah, So I know that's a little bit of data
on the tu Sun market. I'll get into a little
bit more on these market statistics after the breaks. Wanted
to talk.
Speaker 2 (09:20):
I always have to say, Andy, that I always go
off of, you know, our own little corners of the world, right,
you know that what we see day in and day out,
and typically what we see day in and day out
mirrors what happens in the marketplace. And the key thing
that I'm seeing this past week was the largest number
of leads. This is people calling in looking to get
(09:43):
qualified for a home, not that they're going to buy immediately,
but that they're going to be buying over the next
you know, two to six months. And that number was
the largest count we've seen for a week in a
very very long time. And again that when I say
a long time, over the last you know, maybe six
eight months. So that tells us that is in line
with that we are getting into the spring buying season
(10:05):
and people are preparing for because they're looking to buy
sometime in March April May when their leases up, or
you know, they're they're moving with employment. Raytheon moves their
people in a lot of people in the in the spring,
so does the university, so does the military. So all
these different culmination of reasons all lead to people want
(10:26):
to buy home in the next two to six months.
So it just kind of details into our normal seasonality
that ooh, the spring is going to pick up and
you will see more closed sales and more transactions come March, April, May, June,
and so we're again it's the normal pattern.
Speaker 1 (10:45):
Yeah, and we're seeing that quite a bit too. The
showings are picking up, the the ad calls are picking
up quite a bit for us as well, So it's
feeling like it's coming into a pretty normal spring market.
As we as we start that Super Bowl Sunday kickoff
to the Spring market, the our phones are starting to
ring a fair bit more as well, So certainly a
(11:07):
good sign of things to come. Rates stable to coming
down a little bit certainly can't help. And yeah, I'm
very much looking forward to see what we have coming
up this spring, especially after today and Super Bowls over
and off we go to the Spring market. So with that,
we are coming up on a break. This is Andy
Keel with the Home Solutions Show on K and ST
(11:29):
Radio and we will be back right after this. Hi,
and welcome back to the Home Solutions Show on K
and ST Radio. This is your host Andy Keel with
the Win three team powered by Epic Realty, and I'm
joined again by Jerry Sun with Cross Country Mortgage and
Andy and Jerry, would you mind sharing your number with
(11:51):
the audience?
Speaker 2 (11:52):
Oh? Sure, of course, five two oh three seven zero
nine seven six. So I was concentrating on this land
tailed this purchase agreement.
Speaker 1 (12:03):
Yeah, And if anyone would like to reach me, my
number is five two zero five three nine nine five
nine one. And what Jerry's alluding to is I just
put up an offer on one of the listings that
we have up on my screen that I actually want
to talk a little bit about with the audience here.
And this is kind of reflective of a lot of
(12:24):
the things we've been getting lately. So we have a
home listed at eighteen ten North Heather Bray in Tucson
eight five seven one five. Now, this home has been
a rental for about the last well the last many years.
It was kept up very well, but it shows a
little bit like a rental. It's kind of plain, it's
(12:44):
kind of simple. The kitchen's a little smaller for this
size of home. But you know, for the price we
thought it was was very fair and it's actually been
getting a lot of activity incomes. This offer that I
wanted to talk a little about because on the surface
this doesn't sound like too that. One we have the
property listed for three hundred and fifty thousand. This sales
(13:05):
contract is a full price offer, three hundred and fifty thousand,
and then we start reading the details. And Jerry hasn't
seen this before, so he can actually see a visual
of this, but I want to see if he catches
one of the key problems. Let me go over this.
It's three hundred and fifty thousand down payment to seller,
it closing forty thousand monthly payment to seller fifteen hundred,
(13:29):
and the buyer's offering to refinance the property in eight years.
There's a balloon payment. They have to pay the remaining
amount ode to seller by eight years. And then they're
going on to say that pretty normal stuff. But the
closing cost will be paid by the buyer, and the
buyer will pay the taxes and insurance above and beyond
the fifteen hundred monthly payment. So what do you think
(13:52):
of this offer? Jerry? I mean for an owner financed offer,
on the surface, it doesn't seem too bad.
Speaker 2 (13:57):
It didn't so far, it didn't seem that bad. I mean,
I don't know if the teen hundred dollars market or not.
Speaker 1 (14:02):
So well, the first thing I did is I said, well,
what's fifteen hundred compute too? So if I plug that in,
it's just a smidge under six percent if we're talking
interest only payments. Yeah, So I'm thinking that's actually not
not too bad of an offer. And this particular seller
isn't really excited about doing an owner finance transaction. But nonetheless,
(14:25):
we talk about these types of things on the show
quite a bit, and I wanted to dig a little deeper.
So on the surface, that sounded pretty good, but I'm
making the mother of all assumptions. It simply says monthly
payment to seller fifteen hundred.
Speaker 2 (14:39):
I'm assuming US dollars.
Speaker 1 (14:42):
Well, I'm assuming interest only payments because they don't say
anything about interest rate in here.
Speaker 2 (14:48):
Ah. Right.
Speaker 1 (14:50):
So I reached back out to the offerer and they said, oh, no, no,
our intent is those are principal reduction payments, zero interest.
Ah but ye, no thanks. So that was that was
definitely the catch on that, I mean, and that truly
is I felt a little I felt like that was
(15:13):
a little sneaky.
Speaker 2 (15:15):
Agreed. I Mean, when most offers, when they leave something
out like that, are they just trying to see if
someone will bite, you know, as a seller, will they
bite on this? Like, oh, they'll take it? And then
you know, and they just they get lost in the
assumptions and they're going to bring that information up at
the end or why wouldn't they bring that up at
the contract at the beginning.
Speaker 1 (15:35):
Yeah, it's almost like they're hoping they're not going to
notice that eight years of fifteen hundred dollars a month
payments computes out to one hundred and forty four thousand dollars.
So you take that off of what their offer price was,
they'd literally be refinancing about one hundred and seventy five
thousand dollars and everything goes to principal reduction. I mean,
(15:55):
that sounds like a really good deal for the buyer
and not so much for the sellers. So anyway, my
point of this exercise is I just wanted to point
out that, you know, some of the offers that are
coming through ranging from in some cases just downright ridiculous
to you know, some are are fairly reasonable, but you know,
(16:16):
as agents, believe it or not, in the state of Arizona,
if we get a verbal offer, we must present that
to our sellers. So anything that comes in in writing
has to be presented and that that's always a good thing,
unless the seller directs us to ignore anything under a
particular price or particular terms in writing and advance. But
these are always interesting conversations when we have to talk
(16:38):
to sellers, and some actually get a little insulted. Some
think they're just humorous. It depends, but always kind of
interesting to see what some of the creative offers that
are coming through are and what people are trying to
I don't want to necessarily say get away with. But
you know, again, assuming that all of the payment goes
to principle.
Speaker 2 (16:58):
Is just by mean. I guess my question is in
this wouldn't because they know that that's got to come
out in the wash as someone make an offer, they
know that that's got to you know, that devil in
the detail has to be presented at some point. Why
not just turn around saying fifteen hundred dollars principal payments only.
Speaker 1 (17:18):
Yeah, exactly. And I mean if you or I were
to do something like this and like some kind of
public advertising, we get slaughtered for it because that's a
violation of at least Regulation Z, where if you're going
to advertise a payment, you have to disclose all of
the terms of the payment, the interest rate, down payment,
so on. Yes, so I get this is a contract
(17:40):
and I don't think Regulations Z applies, but again, a
little sneaky. So yeah, So anyway, I just wanted to
share that with the audience of some of the things
that we're we're seeing out there.
Speaker 2 (17:50):
You know.
Speaker 1 (17:51):
Actually I want to talk about a couple of other
transactions that that I'm involved with. This doesn't happen as frequently,
and we're in the process of buying a single family
house in Tucson that the seller opted to put solar
on the house. It was a purchase system with an
actual loan on the property, and the bank on this
(18:13):
one is not exactly the most fun to work with,
and we were ready to close this house and we
would have done it in probably ten days. But because
there's a solar loan and the lender on this is
requiring that I personally assume that loan. We're buying it
in an LLC, but nonetheless the lender is just very uncooperative. No, no,
(18:34):
you have to do it personally, which I don't much like.
But it is a twenty seven year loan. I believe
the outstanding balance is about forty two thousand or so,
and it's one point nine to nine percent interest. So
it's like, gosh, I guess I'll jump through the hoops
because it's worth it, but believe it or not, And
(18:54):
just just one of those things to be aware of
when you're buying a property with solar. Sometimes they go
pretty easy, but they usually take a little bit more
time to sort out the work for title.
Speaker 2 (19:06):
And I do have a question to ask you about that, Andy,
so not to be a railable once you get done
with this. I had a question about leash versus own
on solar and how it affects you know, your view
on transactions, but please continue.
Speaker 1 (19:19):
Yeah, so in this particular case, the bank said, there's
no there's no expediting it, and we'll take ninety days
to review and we'll give you the answer within ninety days.
See you. Then wait, what so we have a seller
that's ready to sell a buyer that's ready to buy
and a lender that's just slow. So we're literally stuck
(19:43):
waiting for a lender to review a about a six
page document to see if I'm approved to assume this
solar loan.
Speaker 2 (19:51):
I mean ninety days to reply. Who's the solar company?
Speaker 1 (19:55):
It's actually I don't mind speaking the name. It's not
the company, but it's the bank. It's regions is the
one that's hijacking your transaction. I have no problem mentioning
the name on the radio here because, in my opinion.
Speaker 2 (20:08):
I mean, that's just that that does seem like an
abnormally long period of time, right, I mean it's given
the normal piece of things, you know, you would think
an answer response like that would be two weeks or
you know, something along with those lines. But ninety days
seems that just sounds like two thousand and eight short
sale type of timelines. You know that just that's longer
(20:31):
than normal.
Speaker 1 (20:33):
Yeah, I just thought that was ridiculously long. But we
decided that it's worth playing ball because the rate is
just so ridiculously low. I mean, where are you going
to get one point nine percent money? So you have
a question a bit on the like the lease versus own.
Speaker 2 (20:48):
Yeah, that when you're making it off on a property,
and when someone has a solar lease versus alone, does
that change your Do you have an opinion one way
or the other of lease versus long where it's like
it's got a solar lease, I'm not going to mess
with the headache?
Speaker 1 (21:04):
Yeah, actually I have an opinion on both. If it's
a least solar planning. Usually the leases from the ones
I'm familiar with, we have I don't know, probably eight
or ten properties with solar on them. I don't know
the number off the top of my head, but it's
pretty typical to see a payment of like somewhere between
sixty five and seventy five dollars starting, and they escalate
(21:25):
over typically about a twenty year period a little bit,
not too much so. Mathematically speaking, it's certainly an advantage
to our resident to have solar on the property, but
ironically it's really hard to get a higher monthly payment
out of the properties with solar. Yes, the buyers do
see it as a benefit. However, they generally aren't willing
(21:47):
to pay a premium for it, which doesn't quite make sense,
but that's just the market speaking.
Speaker 2 (21:53):
Well, and I think, you know, I mean, solar leases
do not add any value solar if you own the
solar outright.
Speaker 1 (21:59):
You know.
Speaker 2 (22:00):
It depends I think on of course obviously the consumer
of the buyer, but the appraiser. Some appraisers will give
value to solar if it's owned, others won't. And I
think it depends upon the comparables in the area. Some
of the recent sales, of the recent comparables all have solar, well,
(22:20):
then they're going to give weight to solar. If they don't,
then they may not give much weight.
Speaker 1 (22:25):
Yeah, and that's pretty much been my experience as well.
So like this particular house, we're effectively discounting the price
by the amount of the solar loan. And I mean,
I love solar, I'm a big proponent of it, but
from an investment point of view, we don't get a
whole lot of value out of it, unfortunately. So, especially
with the least loan, if we have say eighty dollars
(22:47):
a month payment, I'm going to discount my price by
the equivalent amount of what that eighty dollars is, And
it's generally speaking about fifteen to twenty thousand dollars of
value that I have to discount to cut for that
difference in payment.
Speaker 2 (23:02):
Interesting, got it, that's important to know.
Speaker 1 (23:05):
Yeah, and same thing. You know, we've almost discounted that
solar loan, that forty two thousand dollars solar loan. We
had to discount the house price by nearly as much
because you know, the house won't cash flow any better.
The house isn't worth any really that much more, even
with the own solar. Unfortunately, it's very nice not having
that large electric bill for our resident, but we don't
(23:28):
get nearly as much of the premium back on that.
So does it add value yes, it's kind of like
a swimming pool. Does it add value, yes, But does
it add the value that you spend on it? Probably not.
So with that, we are coming up on a break.
This is Andy Keel with the Home Solutions Show and
we'll be right back. Hi, and welcome back to the show.
(23:51):
This is Andy Keel with the Home Solutions Show, and
I am joined again by Jerry Sunt with Cross Country Mortgage.
In the previous segment, we were talking a little bit
about an offer and a little bit about solar. I
wanted to get into a little bit more market data here.
We have the MLS of Southern Arizona numbers that has
(24:15):
recently come out for January. Before I get into that,
I want to talk a little bit more again about
last week's show. We had a very special guest on
the show, Sharon Lecter, and we're keeping We made a
special offer to the listening audience last week that anyone
that would like a copy of one of Sharon's books,
(24:36):
either Three Feet from Gold or Outwitting the Devil. And
for those of you joining us fresh this week, Outwitting
the Devil was actually Napoleon Hill wrote that manuscript I
think over eighty years ago as the sequel to Think
and Grow Rich, and his family didn't much like the title,
(24:57):
so it wasn't published until eighty years later when Sharon
Lecter was able to get this book into print. Just
a fantastic, fantastic book. So if anyone in the Listening
To audience wants to sign up, this will be the
last day. We're going to cut this off on Monday.
But if you'd like a free copy of this book
sent to you, just go on to our website which
(25:19):
is the Win three Team dot com, the win Number
three team dot com and you can go to the
free section there and sign up for the free book
and we'll get that sent out to you. So today's
really the last day for anyone that wants that book
to sign up, so feel free to do that. And
as always, if there's anything you'd like to communicate with
(25:43):
myself for Jerry, feel free to send us an email.
My email address is Andy A. N. D y keel
k I E l at the Win three team dot com.
And Jerry, do you want to share your email address
as well?
Speaker 2 (25:56):
Yeah, of course, Jay sent s und at sentmortgage dot com,
s Undt Mortgage spelled out dot com.
Speaker 1 (26:06):
All right, And with that, I want to talk a
little bit about some of the new market statistics that
have come out here for the month of January. Keep
looking at February and wanting to say February, but we're
just getting into February. Couple of the key things that
I noticed here, So January twenty five, up to two
(26:28):
hundred thousand, we had seventy two sales up to three hundred,
one hundred and eighty seven sales up to four hundred,
there was two hundred and fifty one. Guess the key
things I want to point out average sale price, four
hundred and fifty six thousand, up eight point eight percent
from the previous year. That one kind of threw me
(26:50):
a little bit. Again, that's the average, so if we
if we have a couple of higher end sales, that
can really impact the average. And I know, especially the
first half of last year, the over a million dollar
market was actually chugged along really really well, so I
suspect that is a big part of why that average
(27:10):
sale price is being pushed up a bit. But then
we get to the median sale price, which is three
hundred and sixty five thousand. I think that's a better
gauge of what the overall market is doing, but even
that was up two point eight percent from the previous year.
Then we get into the dollars per square feet. So
(27:33):
if you want to look at just the just rough
range of what a house will cost you in terms
of price per square foot, it's two hundred and thirty
two per square foot. Is the I don't know if
this is the average of the median, but that's what
they're quoting here in the data. And shockingly, the median
days on market is actually down eight days from last year.
(27:55):
We're at thirty four median days on the market, down
eight days from the previous year.
Speaker 2 (28:02):
Again, I look at that as a very healthy market.
I mean, you know this, I think the shocking number
about all these different data points is at the number
of sales where it was below nine hundred. That's a
pretty darn low number. But it's that low every January,
and we'll be picking up in February March. Absolutely. Yeah.
Speaker 1 (28:20):
And I'm looking at these close out numbers from the
previous year, and I think this is kind of interesting
that I'm looking at December the twenty twenty twenty three
and twenty twenty four prices, and I'm looking at a
graph and literally December is overlaying three hundred and sixty thousand,
like nothing changed for the whole year on this different graph.
(28:42):
And then I'm looking at the January numbers coming in
at three sixty five, which is up from three to
sixty the month before. So that's where the I think
the two point eight percent increase is coming in. Wow,
what else is interesting here in the market activity?
Speaker 2 (29:00):
I love that chart and I wish, you know, sometimes
we could share charts with with you know, the listening audience,
which that's impossible because this is radio. But if you
look at the Bell curve over the last two years,
January twenty twenty three to January twenty twenty five, it
literally is the same, very similar bell curves, and you know,
our December and closings, you know, being low is very
(29:25):
much in line where the December twenty three closings were
the December twenty two closings were. So it's just it's
we are very much in normalized market.
Speaker 1 (29:34):
Yeah, I'm looking at again the same chart, but I'm
looking at January twenty twenty three where we had nine
hundred and four home sales as opposed to January of
twenty twenty five, which was very close eight hundred and
seventy six. But the difference is in the market activity
there where the way I'm reading this chart, it looks
(29:54):
like we have a lot more availability of homes as
opposed to what was happening in twenty twenty three, which is,
you know, telling us that we have a little bit
more supply to work with, which is a very welcome change.
Speaker 2 (30:07):
Yep On.
Speaker 1 (30:10):
What are some other key things here? I find this
chart kind of interesting where the average days on the
market is actually up five days from the previous month,
we've gone from fifty nine days on average compared to
December was fifty four. However, the median days on market
is actually down two days. We're at thirty four days,
(30:30):
whereas December was thirty six days. So again that tells
me that again if you if you price your home
to sell, to use one of Bob Zachmeyer's terms that
I like so well, you only get one chance to
make first impression. And that's very true in the real
estate market as well. So if you price your home
appropriately in the beginning, it's a very good chance you'll
(30:51):
get it sold fairly quickly, and if it starts to stagnate,
it could take longer and longer to sell. So that
that that's kind of the different said how I read
these medium versus average charts.
Speaker 2 (31:04):
So then you know to detail on that, you know
you only get one chance to might rate it be
a first impression or to give a first impression. Very true.
And also if a house keeps coming back on the market,
if it falls out of escrow for whatever reason, you know,
once or twice it gets stigmatized of well, what's wrong
with that house? And it may be something completely out
(31:24):
of a seller's control or a listing agent's control. You know,
an appraisal comes in low, or buyer cancels for whatever reason.
But a property can get become stigmatized.
Speaker 1 (31:38):
Yeah, very much so. And as a matter of fact,
there's a lot of a lot of buyers out there
will actually go out of their way to search MLS
for properties that are on the market for over thirty
or sixty days and actually search for those to make
lower offers. Not that that's necessarily a bad thing, but
(31:59):
that's part of the the whole stigmatization of the market.
As we start getting the market times go up and
buyers do look at that, it does matter and sometimes,
as you say, Jerry, it's completely out of the seller's control.
I mean, we've certainly had those situations where buyer couldn't
get financing at the last minute, or any number of
things that cause it to fall out. No fault of
(32:20):
the sellers, but that market time continues ticking up, and
there's ways of doing that. But unless we pull the
house off the market for thirty days, it's going to
have a cumulative market time that just shows out there. So, yeah,
what are some other things that are that I'm finding interesting?
(32:41):
Here in the data the number of new listings out there,
which I find it welcoming and a little bit of
a concern. At the same time, we are up four
hundred and seventy seven new listings January twenty five compared
to January of twenty four. We're actually getting a fair
number of new listings hitting the market. That's pretty significant.
(33:06):
That's what well over twenty percent increase year over year.
We're still hovering at months of supply four point nine seven.
That's that solid neutral market territory, and if we get
much higher, that really starts to get squarely into a
buyer's market now for the first time and well since
(33:27):
well before COVID.
Speaker 2 (33:28):
A long time. Yeah. Yeah.
Speaker 1 (33:30):
We currently have forty three fifty five active listings in
MLS of Southern Arizona, and the number of new pendings
is actually down fifty two from last year. So we
always like to or I always like to, of course,
this is a trick I learned from Bob Zachmeyer. Is
(33:52):
what I call the crystal ball indicator of what's the
market going to do, and that's looking at absorption rate,
and that's simply looking at the number of units sold
versus the number of units available, and we're actually seeing
the absorption rate change pretty significantly, meaning there's a lot
of properties available and not quite as many are selling.
So that is not one month does not create a trend.
(34:16):
But if this trend continues, we might actually start seeing
some softening in the market. So again, I don't want
to sound any alarm bells because one month is not
a trend. But I find that very interesting year over
year that we have quite a jump in number of
new listings hitting the market comparatively speaking to what's selling.
Speaker 2 (34:35):
My gut tells me that that absorption rate will come
very much back in line in the next sixty days.
Just from what I'm seeing of the number of buyers
looking to qualify for a home for the spring. I
think there's a lot of optimism out there, and it
is and if this administration is able to bring mortgage
(34:55):
rates down the way they're talking they want to do,
that will help with the spring, you know, it will be.
It will add to a lot of activity for the
spring buying season, so observed rate would jump right back up.
Time will tell, of course, agreed.
Speaker 1 (35:11):
I just find it very interesting that in December of
twenty three, there is eight hundred and sixty eight new
listings that came on the market. In December of twenty four,
it was nine to ninety two, so a little bit
of an increase. But we look January of twenty fourth,
thirteen ninety five compared to January of twenty five, seventeen
(35:32):
ninety four. That is, I'm looking at this three year
graph and that is the highest we've seen in any month,
including May of twenty four. So we're getting a lot
of activity for the first time in a number of years,
more so than anything, So I find that kind of refreshing.
At any rate. We are coming up on another break,
and this is Andy Keel with the Home Solutions Show
(35:54):
and we will be right back. Hi, and welcome back
to the show. This is Andy Heel with the Win
three team powered by Epic Realty, and I'm joined again
by Jerry Sunt with Cross Country Mortgage. And before the break,
we were talking some market statistics for the Greater Tucson area.
(36:15):
We're actually looking on the break here literally what a
big jump this is in the number of new listings.
And I was really taken back because we're at seventeen
hundred and ninety four new single family homes listed. This
is based on the MLS data, and I'm going back
this entire.
Speaker 2 (36:35):
Two years January twenty twenty three.
Speaker 1 (36:37):
Yeah, so we've got about two a little over two
years of data here. And generally these market trends are
almost like clockwork. You see a jump in January and
then May you see the biggest jump, typically where the
most new listings hit the market. Then it starts to
slow down a little bit in the summer, and you
get a little jump again in the fall. But this
(36:59):
is actually a trend breaker. The seventeen ninety four is
the highest number of new single family homes listed in
any month for the since January of twenty three.
Speaker 2 (37:10):
Yeah. No, I mean from a chart perspective, it's definitely
a jump. Yeah yeah.
Speaker 1 (37:14):
And the closest the closest month prior to this was
May of twenty four, where we had sixteen hundred and
seven new listings. So I'm just I'm fascinated by this
because it does break the trend in a way that
we haven't seen in a while. So maybe that inventory
we're just so much of waiting to hit the market
is finally starting to come back a little bit. And
(37:36):
then here are the new pendings. One other piece of
data that's interesting, look at how many of these homes
are selling. So in January we're up a little bit.
Eight hundred and twenty six homes went pending. If you're
looking at the seventeen ninety four, that's you know, not
quite fifty percent. That's still a pretty healthy number. If
(37:57):
I go back even one month, I find this pretty interesting.
One hundred and thirteen single family homes went pending in
the month of December, whereas nine hundred and ninety two
of them hit the market. So that's actually a pretty
durned good absorption rate. It is so moral of the story.
We need more data. What are some other interesting things
(38:18):
that are happening here? The medium sale price we talked
about already is three hundred and sixty five thousand.
Speaker 2 (38:27):
Well, I think another big thing that's going to spring
add momentum and volume to the spring buying season is
Lighthouse is coming back in March. Now, we don't have
this specific date in March when the Lighthouse funds will
be available, and we don't know what the interest rate
will be on this round, but if you know history
tells us anything, they've been right around six percent for
(38:47):
the last few rounds, and this to refresh everyone's memory
that the Lighthouse will give a buyer, a first time
home buyer, four percent in downpayment assistance at a rate
that's about a quarter to a half below market. So
it's a tremendous program. The negative to it is that
a person who uses the program is not able to
(39:09):
refinance that rate for five years, and if they sell
the house within five years, they have to pay the
funds back. So those are the two negatives. But if
you're not planning on selling it immediately or not selling
it in the next five years, it's a great opportunity.
It's a great program to take to take advantage of.
You do have to be in contract before you can
(39:32):
reserve the funds. So for people out looking right now
that are planning on going into contract sometime in the
next few weeks and closing the end of March, Man
oh Man, they will be eligible for a Lighthouse And
I do believe the Lighthouse funds will disappear in a
very short period of time.
Speaker 1 (39:51):
Yeah. I think that's a really good point though, Jerry,
that if anyone is looking for some down payment assistance money,
it's a matter of being very prepared for it. You
can't just say, oh, look, let's let's go out run
by a house, because you know, if you're not prepared,
that money is gone. Last time, it was just a
matter of days.
Speaker 2 (40:09):
If I'm not mistaken, yep, no, I mean it's gone.
One of the rounds went in a couple of hours.
Typically it takes about, you know, a few days to
a week to absorb all the funds, and then people say, well, gosh,
how do I get this money if I if it
runs out so quickly or it gets reserved so quickly. Remember,
a chunk of the people that reserve those funds never
(40:30):
close because they fall out of ESCRO because they buyer
doesn't qualify or be the house, doesn't a praise, or
their repairs or something, and so for a host of reasons,
the when when a deal does fall out, those funds
become available again. So it's just getting on the waiting list.
(40:51):
And I have put people on the waiting list a
handful of times over the past year, and sure enough,
every one of those times they have gotten the money.
Speaker 1 (41:00):
Give Jerry a call if you're looking for some down
payment assistance, or have a friend or family member who
could benefit from a program like that. I actually want
to talk a little bit about this too, Jerry. We
have one of our agents is working with the client
that is really pretty tight on what their budget is,
(41:22):
and we're trying to use some of the tricks out there.
She's perfectly happy with getting a town home or a condo,
or it's just herself. She really wants two bedrooms if possible.
She'd probably be perfectly fine settling with one. But as
we start getting into that market, it's really interesting how
(41:43):
we're trying to determine what is a fair purchase price
to pay. She's roughly qualified for two hundred and twenty thousand,
but the reality is that's not really the right number
because she's qualified for a monthly payment as most buyers,
and when you're in that market for condos, it can
(42:04):
radically vary because of the HOA. That's really a big,
big wild card is in some cases there's some places
out there that have zero HOA and other places it's
pretty pretty hefty at over two hundred bucks a month.
What does two hundred dollars a month calculate out to
in terms of buying power?
Speaker 2 (42:23):
About thirty thousand bucks.
Speaker 1 (42:25):
Yeah, so that that's really pretty powerful. So if we're
comparing one property with a more expensive HOA versus another
one that doesn't have one, that two hundred dollars HOA
calculates out to thirty thousand dollars in buying power. So
that would be the difference between one hundred and ninety
thousand dollars home with the HOA and a two hundred
(42:46):
and twenty thousand without one.
Speaker 2 (42:48):
So absolutely, and you know, I do have some tricks
for andy. Have you ever heard of the MCC credit.
Speaker 1 (42:54):
I think we talked about that recently, but let let's
let's talk some more about that one.
Speaker 2 (42:59):
So for first time home buyers, they can apply for
an MCC credit where it'll get they'll get a two
thousand dollars tax credit every year that they have that home,
and with that that equals you you can use that
two thousand dollars for qualifying, and that gives a buyer
about one hundred and sixty six dollars a month in
income additional income for qualifying. And for someone in that
(43:20):
lower price point, Man oh Man, that is valuable because
that you know that one hundred and sixty six dollars
can make or break it gives them the ability to
maybe buy maybe just a little bit more home, or
if there's a house with an HOA, it'll cover the HOA,
but you can use that additional one hundred and sixty
six dollars a month for qualifying.
Speaker 1 (43:39):
Yeah, that's another really powerful tool, especially when we're into
these situations where like in this particular case, the client
doesn't have a choice in the matter. I mean, she
can go out and rent something, of course, but the
place where she was renting for the past over twenty
years had a management change and they up to rent
by like six hundre undred dollars a month, so they
(44:03):
just made it completely unaffordable. So she opted not to
sign the lease, so she actually has to move. So
that's where finding a property is so key in this case,
and getting the right one that fits the budget has
been pretty tricky.
Speaker 2 (44:18):
So, yeah, that is when you get into that price
point of between one hundred and really even you know,
up to two fifty. It's just there's not a lot
of inventory out there.
Speaker 1 (44:30):
No, there really isn't. And I've been really helping in
that search. In this particular case, she really was looking
for the east side of Tucson to be close to
work and some other things. But there are options out there.
There certainly are. When you're when you're looking for, you know,
the the low end of the market to really hit
the budget. Sometimes it becomes a matter of what are
(44:54):
you willing to give up? Because she has a list
of things she wants, but she can't get everything on
that list. And some homes, you know, are you willing
to give up the extra bedroom? Or we can get
most of the things on our list, but not all
of the things on our list. So it's finding the
best property, as with any buyer, the best property that
you can afford for that particular monthly payment.
Speaker 2 (45:16):
M No, that's right, That is right. That is the key.
I always ask people when I'm taking their application, you know,
I always don't know what they qualify for, which shocks
a lot of people, like, wow, I qualify for that much?
And I said, yep, but that's not what's important. What's
important is what are you comfortable paying every month? And
then you kind of key around the comfortability factor.
Speaker 1 (45:37):
Yep, and don't discount a couple of other things that
are so very important in that factor as well, taxes,
which we don't have a lot of control over, but
taxes can actually vary pretty wildly from similar property to
similar property. Keeping an eye on what the taxes are
is important. And also shop around for your homeowner's insurance.
(45:58):
I mean, that's that's one of the key factors in
the monthly payment, and that homeowner's insurance can can vary
pretty wildly from company to company as well.
Speaker 2 (46:08):
So in the last twelve months, that has been a
major impact on affordability, agreed.
Speaker 1 (46:15):
So that we've talked about insurance costs and rates a
lot in the last several shows, and it continues to
be very impactful. And I don't see these numbers going
down ever.
Speaker 2 (46:27):
You know, again it's with respect to insurance, it's the
cost of construction comes down. If labor comes down, then
we will see insurance come down. But overall, especially with
you know, I know they say that the fires in
California won't affect in homeowners insurance in Arizona, but it
is pretty amazing that the cost of construction does directly
(46:52):
affect the premium on insurance. And I don't know, I
don't see the cost of construction coming down on intention.
Speaker 1 (47:00):
Yeah, I don't think that's coming down at all. So
I think we're going to be stuck with it an
inflationary environment at least for construction costs and insurance cost
in the next number of years. Coming up at any rate,
we are coming up on the end of the show.
Thank you for joining us on this Sunday, this Big
Game Sunday.
Speaker 2 (47:19):
Yeah, Sunday, that's right.
Speaker 1 (47:22):
The next couple of weeks we will be joined by
a special guest star again, Bob Zachmeyer, a previous host
of the show, and he'll be sharing some deeper market
data that he's been tracking for many, many, many years.
So look forward to having you join us again on
next week's show, and we'll see then
Good morning, and welcome to the Home Solutions Show. This
is your host, Andy Keel with the Win three team
powered by Epic Realty, and I'm joined today by Jerry
Sunt with Cross Country Mortgage.
Speaker 2 (00:13):
Morning. Andy, how are you very well?
Speaker 1 (00:15):
How are you doing, Jerry?
Speaker 2 (00:17):
You know I'm doing great? Thank you great.
Speaker 1 (00:20):
Well. We certainly have a lot of things to talk
about this week, a lot in the news. Just on
a personal note, I just got back from a nice,
short little trip to Jamaica this week, so I'm feeling
pretty refreshed. And met with a bunch of real estate
investors down in Jamaica for six days, so that was
a whole lot of fun. I had some time in
the ocean, did a little scuba diving, had a really
(00:41):
good lobster, so that was a whole lot of fun.
Speaker 2 (00:44):
And the weather was the weather perfect.
Speaker 1 (00:47):
The weather was pretty perfect. I forgot what humidity is like,
but that passed the humidity. It was great.
Speaker 2 (00:53):
That's awesome.
Speaker 1 (00:55):
So we've got a lot of the news with interest
rates this week, so let's talk a little little bit
about that.
Speaker 2 (01:01):
Yeah, so the big news that happened this week, because
there was one piece of news that is now covering
all the headlines which are will this weekend, and then
the other is one that was kind of quiet and
behind the scenes but actually has a bigger impact. So
the headlining news had to do with the employment report
that came out on Friday, and basically there was one
hundred and forty three thousand jobs created and it was
(01:23):
estimated to be one seventy so it was weaker than expected.
But you know, the underlining news is that the unemployment
rate dropped from four point one to four so that's
you know, stronger than expected. And the months of November
and December revised one hundred thousand jobs were created higher,
so again that's more inflationary than expected. But the basic
(01:47):
trend line is that the overall in the January of
every year, the Bureau of Labor Statistics goes ahead and
revises their number for the entire year, and for twenty
twenty four or the number was revised down to I
think it was one hundred and sixty three thousand jobs
per month, which was much lower than what was originally indicated.
(02:09):
So it basically shows that the although the employment situation
is strong, it's definitely not improving and it's getting a
little weaker, which is what the FED has been talkeding
about and basically gives the FED room to not have
to raise interest rates or drop interest rates anytime soon
because the employment situation just chugging along. Well. So that
was the first big data point. The second and I
(02:31):
think more valuable debt point data point that came out
is the new Treasury Secretary, which is Scott Besnett, is
a in my opinion, is just an incredible mind and
one of the most intelligent people that I've ever listened to.
And you know, he and President Trump came out and
made an announcement that their goal in the short term
(02:53):
is not to get the FED or to have the
FED cut rates, but actually to get the yield on
the tenure lower. And what is that directly effect that
directly affects mortgage rates and housing and so for you know,
for the Treasury Secretary and the President to both make
this announcement and say that this is what they're going
to be working on on things to get the ten
(03:15):
year yield lower, it made the ten year yield drop
literally to the lowest level in the last three months,
just like that. Over within a few minutes. It went
from in the four point six basically down to four
point four to five, so dropped about fifteen basis points,
and that tells us that we should see lower yields
(03:35):
throughout the year, and that means lower mortgage rates. So
now everyone's kind of revising their plans of where we
see mortgage rates to be by the end of the year,
because you know, economists love to change their forecasts, and
now you're looking at rates could be in the high
fives by the end of twenty twenty five. So it
does feel like help is on the way. Of course,
there are a lot of things that go into these forecasts,
(03:58):
but it looks like we will see lower mortgage rates
throughout the spring and summer and throughout the year. So
I thought that was very positive. And really it's now
we're heading into the spring buying season. You know, we've
always said right after Super Bowl Sunday, which is today,
is what kind of kicks off the spring buying season.
And now people should see lower rates in the coming months.
Speaker 1 (04:20):
Yeah, that's certainly a very welcome sign at least of
what's to come with that announcement and actually having the
market react that way. So finally a little bit of
I don't want to say common sense, but looking at
the ten year treasury as opposed to just the Fed
funds rate, because that's so much more impactful for the
mortgage rates.
Speaker 2 (04:39):
Yes, exactly.
Speaker 1 (04:41):
So we've got actually a lot of data to talk about.
Speaker 2 (04:44):
Day two.
Speaker 1 (04:45):
We have some of the January numbers that have come in,
so I'd like to talk a little bit about what's
going on with the market statistics in Tucson. So just
crunched some numbers for the month of January, and typically
like to break down. We look at the number of
new listings that have come on the market, and then
we break it down by single family homes in various
(05:07):
price ranges. So sure, here's what we have. So as
of Friday, when I pulled this data, we have four thousand,
two hundred and ninety two homes. And again I don't
go with the entire MLS. I draw a big square
around kind of the greater Pima County Tucson market area
just for reference here. But as of two seven, we
(05:30):
have four thousand, two hundred and ninety two listings, which
is up a little bit from last month, a couple
hundred from the previous month. We have three thousand three
hundred and sixty three single family homes listed, again up
a little bit from last month. The end of twenty
twenty four, Going into twenty five, we're at about thirty
(05:51):
two fifty then up to two hundred and fifty thousand,
there are forty nine homes available, which is actually a
bit down prize. The lower end of the market tends
to be what is selling because that limited supply. As
we get up to three hundred thousand, we have two
hundred and eighty one new listings, also down from the
previous month. Up to four hundred thousand, we're at fourteen
(06:14):
hundred and eighty four new listings, again down from the
previous month. Then as we get to that up to
a million, we're at three thousand and fifty two, which
is now up from the previous month. As well as
homes over a million, we're at three hundred and fourteen,
which is again up from the previous month. So not
not a whole lot of surprise there month over month data.
Speaker 2 (06:38):
I do think it's important though, to note to note
that you know, overall we're seeing inventory rise. Would you think, okay,
that's getting back into a normal marketplace, But when you
look at closely at that data. What's really the inventory
that's increasing is on the higher end of the curve.
You know, you're four hundred to five hundred thousand dollars
homes and above, not the you know, the first time
(07:01):
home buyer market, and so that's where the inventory is creasing,
is increasing as those higher price points.
Speaker 1 (07:09):
Yeah, and that certainly shows true for the new listings,
But as we get into the sales, there's some interesting
data with that higher end of the market again too.
So now I'm looking at the sales for the month
of January, and no surprise, we're down a little bit
comparatively speaking from December. But we're looking at nine hundred
(07:30):
and sixteen listings sold in the month of January, a
single family seven hundred and thirty nine. Up to the
two hundred and fifty thousand, there were fifty seven sales,
which is actually up twelve sales from the previous previous month.
Up to three hundred, we've had one hundred and forty
six sales, which is down a few actually pretty significant
(07:52):
difference here we get up to four hundred thousand, there
was three hundred and eighty sales in the month of January.
As opposed to four FO one hundred and eighty in
the month of December. So this is some of the
normal seasonality we tend to see this time of year,
but there's some indications that we are getting a little
bit of a slowdown until we jump over over a million.
Speaker 2 (08:14):
Yeah, and Amy, I always have to, you know, caveat that. Yes,
January is the slowest month of the year, but typically
it's the slowest month of every.
Speaker 1 (08:22):
Year, very much the case, and I have some other
data on that that'll share in a moment here as well.
I did find this interesting that we did have thirty
eight over a million homes sell in the month of January,
which is actually up from the month of December, and
up pretty significantly a year over year. So when we
(08:45):
go back to last year at the same time, we
had about twenty eight homes sold, we're up to thirty
eight at the same time this year year over year,
so that's a pretty significant jump. I mean, ten homes
doesn't seem to make a lot of statistics significance when
you're talking ten homes between twenty eight and thirty eight,
but tells me that that high end market is still
(09:07):
is still doing okay.
Speaker 2 (09:08):
Don't tell it along. Yep.
Speaker 1 (09:11):
Yeah, So I know that's a little bit of data
on the tu Sun market. I'll get into a little
bit more on these market statistics after the breaks. Wanted
to talk.
Speaker 2 (09:20):
I always have to say, Andy, that I always go
off of, you know, our own little corners of the world, right,
you know that what we see day in and day out,
and typically what we see day in and day out
mirrors what happens in the marketplace. And the key thing
that I'm seeing this past week was the largest number
of leads. This is people calling in looking to get
(09:43):
qualified for a home, not that they're going to buy immediately,
but that they're going to be buying over the next
you know, two to six months. And that number was
the largest count we've seen for a week in a
very very long time. And again that when I say
a long time, over the last you know, maybe six
eight months. So that tells us that is in line
with that we are getting into the spring buying season
(10:05):
and people are preparing for because they're looking to buy
sometime in March April May when their leases up, or
you know, they're they're moving with employment. Raytheon moves their
people in a lot of people in the in the spring,
so does the university, so does the military. So all
these different culmination of reasons all lead to people want
(10:26):
to buy home in the next two to six months.
So it just kind of details into our normal seasonality
that ooh, the spring is going to pick up and
you will see more closed sales and more transactions come March, April, May, June,
and so we're again it's the normal pattern.
Speaker 1 (10:45):
Yeah, and we're seeing that quite a bit too. The
showings are picking up, the the ad calls are picking
up quite a bit for us as well, So it's
feeling like it's coming into a pretty normal spring market.
As we as we start that Super Bowl Sunday kickoff
to the Spring market, the our phones are starting to
ring a fair bit more as well, So certainly a
(11:07):
good sign of things to come. Rates stable to coming
down a little bit certainly can't help. And yeah, I'm
very much looking forward to see what we have coming
up this spring, especially after today and Super Bowls over
and off we go to the Spring market. So with that,
we are coming up on a break. This is Andy
Keel with the Home Solutions Show on K and ST
(11:29):
Radio and we will be back right after this. Hi,
and welcome back to the Home Solutions Show on K
and ST Radio. This is your host Andy Keel with
the Win three team powered by Epic Realty, and I'm
joined again by Jerry Sun with Cross Country Mortgage and
Andy and Jerry, would you mind sharing your number with
(11:51):
the audience?
Speaker 2 (11:52):
Oh? Sure, of course, five two oh three seven zero
nine seven six. So I was concentrating on this land
tailed this purchase agreement.
Speaker 1 (12:03):
Yeah, And if anyone would like to reach me, my
number is five two zero five three nine nine five
nine one. And what Jerry's alluding to is I just
put up an offer on one of the listings that
we have up on my screen that I actually want
to talk a little bit about with the audience here.
And this is kind of reflective of a lot of
(12:24):
the things we've been getting lately. So we have a
home listed at eighteen ten North Heather Bray in Tucson
eight five seven one five. Now, this home has been
a rental for about the last well the last many years.
It was kept up very well, but it shows a
little bit like a rental. It's kind of plain, it's
(12:44):
kind of simple. The kitchen's a little smaller for this
size of home. But you know, for the price we
thought it was was very fair and it's actually been
getting a lot of activity incomes. This offer that I
wanted to talk a little about because on the surface
this doesn't sound like too that. One we have the
property listed for three hundred and fifty thousand. This sales
(13:05):
contract is a full price offer, three hundred and fifty thousand,
and then we start reading the details. And Jerry hasn't
seen this before, so he can actually see a visual
of this, but I want to see if he catches
one of the key problems. Let me go over this.
It's three hundred and fifty thousand down payment to seller,
it closing forty thousand monthly payment to seller fifteen hundred,
(13:29):
and the buyer's offering to refinance the property in eight years.
There's a balloon payment. They have to pay the remaining
amount ode to seller by eight years. And then they're
going on to say that pretty normal stuff. But the
closing cost will be paid by the buyer, and the
buyer will pay the taxes and insurance above and beyond
the fifteen hundred monthly payment. So what do you think
(13:52):
of this offer? Jerry? I mean for an owner financed offer,
on the surface, it doesn't seem too bad.
Speaker 2 (13:57):
It didn't so far, it didn't seem that bad. I mean,
I don't know if the teen hundred dollars market or not.
Speaker 1 (14:02):
So well, the first thing I did is I said, well,
what's fifteen hundred compute too? So if I plug that in,
it's just a smidge under six percent if we're talking
interest only payments. Yeah, So I'm thinking that's actually not
not too bad of an offer. And this particular seller
isn't really excited about doing an owner finance transaction. But nonetheless,
(14:25):
we talk about these types of things on the show
quite a bit, and I wanted to dig a little deeper.
So on the surface, that sounded pretty good, but I'm
making the mother of all assumptions. It simply says monthly
payment to seller fifteen hundred.
Speaker 2 (14:39):
I'm assuming US dollars.
Speaker 1 (14:42):
Well, I'm assuming interest only payments because they don't say
anything about interest rate in here.
Speaker 2 (14:48):
Ah. Right.
Speaker 1 (14:50):
So I reached back out to the offerer and they said, oh, no, no,
our intent is those are principal reduction payments, zero interest.
Ah but ye, no thanks. So that was that was
definitely the catch on that, I mean, and that truly
is I felt a little I felt like that was
(15:13):
a little sneaky.
Speaker 2 (15:15):
Agreed. I Mean, when most offers, when they leave something
out like that, are they just trying to see if
someone will bite, you know, as a seller, will they
bite on this? Like, oh, they'll take it? And then
you know, and they just they get lost in the
assumptions and they're going to bring that information up at
the end or why wouldn't they bring that up at
the contract at the beginning.
Speaker 1 (15:35):
Yeah, it's almost like they're hoping they're not going to
notice that eight years of fifteen hundred dollars a month
payments computes out to one hundred and forty four thousand dollars.
So you take that off of what their offer price was,
they'd literally be refinancing about one hundred and seventy five
thousand dollars and everything goes to principal reduction. I mean,
(15:55):
that sounds like a really good deal for the buyer
and not so much for the sellers. So anyway, my
point of this exercise is I just wanted to point
out that, you know, some of the offers that are
coming through ranging from in some cases just downright ridiculous
to you know, some are are fairly reasonable, but you know,
(16:16):
as agents, believe it or not, in the state of Arizona,
if we get a verbal offer, we must present that
to our sellers. So anything that comes in in writing
has to be presented and that that's always a good thing,
unless the seller directs us to ignore anything under a
particular price or particular terms in writing and advance. But
these are always interesting conversations when we have to talk
(16:38):
to sellers, and some actually get a little insulted. Some
think they're just humorous. It depends, but always kind of
interesting to see what some of the creative offers that
are coming through are and what people are trying to
I don't want to necessarily say get away with. But
you know, again, assuming that all of the payment goes
to principle.
Speaker 2 (16:58):
Is just by mean. I guess my question is in
this wouldn't because they know that that's got to come
out in the wash as someone make an offer, they
know that that's got to you know, that devil in
the detail has to be presented at some point. Why
not just turn around saying fifteen hundred dollars principal payments only.
Speaker 1 (17:18):
Yeah, exactly. And I mean if you or I were
to do something like this and like some kind of
public advertising, we get slaughtered for it because that's a
violation of at least Regulation Z, where if you're going
to advertise a payment, you have to disclose all of
the terms of the payment, the interest rate, down payment,
so on. Yes, so I get this is a contract
(17:40):
and I don't think Regulations Z applies, but again, a
little sneaky. So yeah, So anyway, I just wanted to
share that with the audience of some of the things
that we're we're seeing out there.
Speaker 2 (17:50):
You know.
Speaker 1 (17:51):
Actually I want to talk about a couple of other
transactions that that I'm involved with. This doesn't happen as frequently,
and we're in the process of buying a single family
house in Tucson that the seller opted to put solar
on the house. It was a purchase system with an
actual loan on the property, and the bank on this
(18:13):
one is not exactly the most fun to work with,
and we were ready to close this house and we
would have done it in probably ten days. But because
there's a solar loan and the lender on this is
requiring that I personally assume that loan. We're buying it
in an LLC, but nonetheless the lender is just very uncooperative. No, no,
(18:34):
you have to do it personally, which I don't much like.
But it is a twenty seven year loan. I believe
the outstanding balance is about forty two thousand or so,
and it's one point nine to nine percent interest. So
it's like, gosh, I guess I'll jump through the hoops
because it's worth it, but believe it or not, And
(18:54):
just just one of those things to be aware of
when you're buying a property with solar. Sometimes they go
pretty easy, but they usually take a little bit more
time to sort out the work for title.
Speaker 2 (19:06):
And I do have a question to ask you about that, Andy,
so not to be a railable once you get done
with this. I had a question about leash versus own
on solar and how it affects you know, your view
on transactions, but please continue.
Speaker 1 (19:19):
Yeah, so in this particular case, the bank said, there's
no there's no expediting it, and we'll take ninety days
to review and we'll give you the answer within ninety days.
See you. Then wait, what so we have a seller
that's ready to sell a buyer that's ready to buy
and a lender that's just slow. So we're literally stuck
(19:43):
waiting for a lender to review a about a six
page document to see if I'm approved to assume this
solar loan.
Speaker 2 (19:51):
I mean ninety days to reply. Who's the solar company?
Speaker 1 (19:55):
It's actually I don't mind speaking the name. It's not
the company, but it's the bank. It's regions is the
one that's hijacking your transaction. I have no problem mentioning
the name on the radio here because, in my opinion.
Speaker 2 (20:08):
I mean, that's just that that does seem like an
abnormally long period of time, right, I mean it's given
the normal piece of things, you know, you would think
an answer response like that would be two weeks or
you know, something along with those lines. But ninety days
seems that just sounds like two thousand and eight short
sale type of timelines. You know that just that's longer
(20:31):
than normal.
Speaker 1 (20:33):
Yeah, I just thought that was ridiculously long. But we
decided that it's worth playing ball because the rate is
just so ridiculously low. I mean, where are you going
to get one point nine percent money? So you have
a question a bit on the like the lease versus own.
Speaker 2 (20:48):
Yeah, that when you're making it off on a property,
and when someone has a solar lease versus alone, does
that change your Do you have an opinion one way
or the other of lease versus long where it's like
it's got a solar lease, I'm not going to mess
with the headache?
Speaker 1 (21:04):
Yeah, actually I have an opinion on both. If it's
a least solar planning. Usually the leases from the ones
I'm familiar with, we have I don't know, probably eight
or ten properties with solar on them. I don't know
the number off the top of my head, but it's
pretty typical to see a payment of like somewhere between
sixty five and seventy five dollars starting, and they escalate
(21:25):
over typically about a twenty year period a little bit,
not too much so. Mathematically speaking, it's certainly an advantage
to our resident to have solar on the property, but
ironically it's really hard to get a higher monthly payment
out of the properties with solar. Yes, the buyers do
see it as a benefit. However, they generally aren't willing
(21:47):
to pay a premium for it, which doesn't quite make sense,
but that's just the market speaking.
Speaker 2 (21:53):
Well, and I think, you know, I mean, solar leases
do not add any value solar if you own the
solar outright.
Speaker 1 (21:59):
You know.
Speaker 2 (22:00):
It depends I think on of course obviously the consumer
of the buyer, but the appraiser. Some appraisers will give
value to solar if it's owned, others won't. And I
think it depends upon the comparables in the area. Some
of the recent sales, of the recent comparables all have solar, well,
(22:20):
then they're going to give weight to solar. If they don't,
then they may not give much weight.
Speaker 1 (22:25):
Yeah, and that's pretty much been my experience as well.
So like this particular house, we're effectively discounting the price
by the amount of the solar loan. And I mean,
I love solar, I'm a big proponent of it, but
from an investment point of view, we don't get a
whole lot of value out of it, unfortunately. So, especially
with the least loan, if we have say eighty dollars
(22:47):
a month payment, I'm going to discount my price by
the equivalent amount of what that eighty dollars is, And
it's generally speaking about fifteen to twenty thousand dollars of
value that I have to discount to cut for that
difference in payment.
Speaker 2 (23:02):
Interesting, got it, that's important to know.
Speaker 1 (23:05):
Yeah, and same thing. You know, we've almost discounted that
solar loan, that forty two thousand dollars solar loan. We
had to discount the house price by nearly as much
because you know, the house won't cash flow any better.
The house isn't worth any really that much more, even
with the own solar. Unfortunately, it's very nice not having
that large electric bill for our resident, but we don't
(23:28):
get nearly as much of the premium back on that.
So does it add value yes, it's kind of like
a swimming pool. Does it add value, yes, But does
it add the value that you spend on it? Probably not.
So with that, we are coming up on a break.
This is Andy Keel with the Home Solutions Show and
we'll be right back. Hi, and welcome back to the show.
(23:51):
This is Andy Keel with the Home Solutions Show, and
I am joined again by Jerry Sunt with Cross Country Mortgage.
In the previous segment, we were talking a little bit
about an offer and a little bit about solar. I
wanted to get into a little bit more market data here.
We have the MLS of Southern Arizona numbers that has
(24:15):
recently come out for January. Before I get into that,
I want to talk a little bit more again about
last week's show. We had a very special guest on
the show, Sharon Lecter, and we're keeping We made a
special offer to the listening audience last week that anyone
that would like a copy of one of Sharon's books,
(24:36):
either Three Feet from Gold or Outwitting the Devil. And
for those of you joining us fresh this week, Outwitting
the Devil was actually Napoleon Hill wrote that manuscript I
think over eighty years ago as the sequel to Think
and Grow Rich, and his family didn't much like the title,
(24:57):
so it wasn't published until eighty years later when Sharon
Lecter was able to get this book into print. Just
a fantastic, fantastic book. So if anyone in the Listening
To audience wants to sign up, this will be the
last day. We're going to cut this off on Monday.
But if you'd like a free copy of this book
sent to you, just go on to our website which
(25:19):
is the Win three Team dot com, the win Number
three team dot com and you can go to the
free section there and sign up for the free book
and we'll get that sent out to you. So today's
really the last day for anyone that wants that book
to sign up, so feel free to do that. And
as always, if there's anything you'd like to communicate with
(25:43):
myself for Jerry, feel free to send us an email.
My email address is Andy A. N. D y keel
k I E l at the Win three team dot com.
And Jerry, do you want to share your email address
as well?
Speaker 2 (25:56):
Yeah, of course, Jay sent s und at sentmortgage dot com,
s Undt Mortgage spelled out dot com.
Speaker 1 (26:06):
All right, And with that, I want to talk a
little bit about some of the new market statistics that
have come out here for the month of January. Keep
looking at February and wanting to say February, but we're
just getting into February. Couple of the key things that
I noticed here, So January twenty five, up to two
(26:28):
hundred thousand, we had seventy two sales up to three hundred,
one hundred and eighty seven sales up to four hundred,
there was two hundred and fifty one. Guess the key
things I want to point out average sale price, four
hundred and fifty six thousand, up eight point eight percent
from the previous year. That one kind of threw me
(26:50):
a little bit. Again, that's the average, so if we
if we have a couple of higher end sales, that
can really impact the average. And I know, especially the
first half of last year, the over a million dollar
market was actually chugged along really really well, so I
suspect that is a big part of why that average
(27:10):
sale price is being pushed up a bit. But then
we get to the median sale price, which is three
hundred and sixty five thousand. I think that's a better
gauge of what the overall market is doing, but even
that was up two point eight percent from the previous year.
Then we get into the dollars per square feet. So
(27:33):
if you want to look at just the just rough
range of what a house will cost you in terms
of price per square foot, it's two hundred and thirty
two per square foot. Is the I don't know if
this is the average of the median, but that's what
they're quoting here in the data. And shockingly, the median
days on market is actually down eight days from last year.
(27:55):
We're at thirty four median days on the market, down
eight days from the previous year.
Speaker 2 (28:02):
Again, I look at that as a very healthy market.
I mean, you know this, I think the shocking number
about all these different data points is at the number
of sales where it was below nine hundred. That's a
pretty darn low number. But it's that low every January,
and we'll be picking up in February March. Absolutely. Yeah.
Speaker 1 (28:20):
And I'm looking at these close out numbers from the
previous year, and I think this is kind of interesting
that I'm looking at December the twenty twenty twenty three
and twenty twenty four prices, and I'm looking at a
graph and literally December is overlaying three hundred and sixty thousand,
like nothing changed for the whole year on this different graph.
(28:42):
And then I'm looking at the January numbers coming in
at three sixty five, which is up from three to
sixty the month before. So that's where the I think
the two point eight percent increase is coming in. Wow,
what else is interesting here in the market activity?
Speaker 2 (29:00):
I love that chart and I wish, you know, sometimes
we could share charts with with you know, the listening audience,
which that's impossible because this is radio. But if you
look at the Bell curve over the last two years,
January twenty twenty three to January twenty twenty five, it
literally is the same, very similar bell curves, and you know,
our December and closings, you know, being low is very
(29:25):
much in line where the December twenty three closings were
the December twenty two closings were. So it's just it's
we are very much in normalized market.
Speaker 1 (29:34):
Yeah, I'm looking at again the same chart, but I'm
looking at January twenty twenty three where we had nine
hundred and four home sales as opposed to January of
twenty twenty five, which was very close eight hundred and
seventy six. But the difference is in the market activity
there where the way I'm reading this chart, it looks
(29:54):
like we have a lot more availability of homes as
opposed to what was happening in twenty twenty three, which is,
you know, telling us that we have a little bit
more supply to work with, which is a very welcome change.
Speaker 2 (30:07):
Yep On.
Speaker 1 (30:10):
What are some other key things here? I find this
chart kind of interesting where the average days on the
market is actually up five days from the previous month,
we've gone from fifty nine days on average compared to
December was fifty four. However, the median days on market
is actually down two days. We're at thirty four days,
(30:30):
whereas December was thirty six days. So again that tells
me that again if you if you price your home
to sell, to use one of Bob Zachmeyer's terms that
I like so well, you only get one chance to
make first impression. And that's very true in the real
estate market as well. So if you price your home
appropriately in the beginning, it's a very good chance you'll
(30:51):
get it sold fairly quickly, and if it starts to stagnate,
it could take longer and longer to sell. So that
that that's kind of the different said how I read
these medium versus average charts.
Speaker 2 (31:04):
So then you know to detail on that, you know
you only get one chance to might rate it be
a first impression or to give a first impression. Very true.
And also if a house keeps coming back on the market,
if it falls out of escrow for whatever reason, you know,
once or twice it gets stigmatized of well, what's wrong
with that house? And it may be something completely out
(31:24):
of a seller's control or a listing agent's control. You know,
an appraisal comes in low, or buyer cancels for whatever reason.
But a property can get become stigmatized.
Speaker 1 (31:38):
Yeah, very much so. And as a matter of fact,
there's a lot of a lot of buyers out there
will actually go out of their way to search MLS
for properties that are on the market for over thirty
or sixty days and actually search for those to make
lower offers. Not that that's necessarily a bad thing, but
(31:59):
that's part of the the whole stigmatization of the market.
As we start getting the market times go up and
buyers do look at that, it does matter and sometimes,
as you say, Jerry, it's completely out of the seller's control.
I mean, we've certainly had those situations where buyer couldn't
get financing at the last minute, or any number of
things that cause it to fall out. No fault of
(32:20):
the sellers, but that market time continues ticking up, and
there's ways of doing that. But unless we pull the
house off the market for thirty days, it's going to
have a cumulative market time that just shows out there. So, yeah,
what are some other things that are that I'm finding interesting?
(32:41):
Here in the data the number of new listings out there,
which I find it welcoming and a little bit of
a concern. At the same time, we are up four
hundred and seventy seven new listings January twenty five compared
to January of twenty four. We're actually getting a fair
number of new listings hitting the market. That's pretty significant.
(33:06):
That's what well over twenty percent increase year over year.
We're still hovering at months of supply four point nine seven.
That's that solid neutral market territory, and if we get
much higher, that really starts to get squarely into a
buyer's market now for the first time and well since
(33:27):
well before COVID.
Speaker 2 (33:28):
A long time. Yeah. Yeah.
Speaker 1 (33:30):
We currently have forty three fifty five active listings in
MLS of Southern Arizona, and the number of new pendings
is actually down fifty two from last year. So we
always like to or I always like to, of course,
this is a trick I learned from Bob Zachmeyer. Is
(33:52):
what I call the crystal ball indicator of what's the
market going to do, and that's looking at absorption rate,
and that's simply looking at the number of units sold
versus the number of units available, and we're actually seeing
the absorption rate change pretty significantly, meaning there's a lot
of properties available and not quite as many are selling.
So that is not one month does not create a trend.
(34:16):
But if this trend continues, we might actually start seeing
some softening in the market. So again, I don't want
to sound any alarm bells because one month is not
a trend. But I find that very interesting year over
year that we have quite a jump in number of
new listings hitting the market comparatively speaking to what's selling.
Speaker 2 (34:35):
My gut tells me that that absorption rate will come
very much back in line in the next sixty days.
Just from what I'm seeing of the number of buyers
looking to qualify for a home for the spring. I
think there's a lot of optimism out there, and it
is and if this administration is able to bring mortgage
(34:55):
rates down the way they're talking they want to do,
that will help with the spring, you know, it will be.
It will add to a lot of activity for the
spring buying season, so observed rate would jump right back up.
Time will tell, of course, agreed.
Speaker 1 (35:11):
I just find it very interesting that in December of
twenty three, there is eight hundred and sixty eight new
listings that came on the market. In December of twenty four,
it was nine to ninety two, so a little bit
of an increase. But we look January of twenty fourth,
thirteen ninety five compared to January of twenty five, seventeen
(35:32):
ninety four. That is, I'm looking at this three year
graph and that is the highest we've seen in any month,
including May of twenty four. So we're getting a lot
of activity for the first time in a number of years,
more so than anything, So I find that kind of refreshing.
At any rate. We are coming up on another break,
and this is Andy Keel with the Home Solutions Show
(35:54):
and we will be right back. Hi, and welcome back
to the show. This is Andy Heel with the Win
three team powered by Epic Realty, and I'm joined again
by Jerry Sunt with Cross Country Mortgage. And before the break,
we were talking some market statistics for the Greater Tucson area.
(36:15):
We're actually looking on the break here literally what a
big jump this is in the number of new listings.
And I was really taken back because we're at seventeen
hundred and ninety four new single family homes listed. This
is based on the MLS data, and I'm going back
this entire.
Speaker 2 (36:35):
Two years January twenty twenty three.
Speaker 1 (36:37):
Yeah, so we've got about two a little over two
years of data here. And generally these market trends are
almost like clockwork. You see a jump in January and
then May you see the biggest jump, typically where the
most new listings hit the market. Then it starts to
slow down a little bit in the summer, and you
get a little jump again in the fall. But this
(36:59):
is actually a trend breaker. The seventeen ninety four is
the highest number of new single family homes listed in
any month for the since January of twenty three.
Speaker 2 (37:10):
Yeah. No, I mean from a chart perspective, it's definitely
a jump. Yeah yeah.
Speaker 1 (37:14):
And the closest the closest month prior to this was
May of twenty four, where we had sixteen hundred and
seven new listings. So I'm just I'm fascinated by this
because it does break the trend in a way that
we haven't seen in a while. So maybe that inventory
we're just so much of waiting to hit the market
is finally starting to come back a little bit. And
(37:36):
then here are the new pendings. One other piece of
data that's interesting, look at how many of these homes
are selling. So in January we're up a little bit.
Eight hundred and twenty six homes went pending. If you're
looking at the seventeen ninety four, that's you know, not
quite fifty percent. That's still a pretty healthy number. If
(37:57):
I go back even one month, I find this pretty interesting.
One hundred and thirteen single family homes went pending in
the month of December, whereas nine hundred and ninety two
of them hit the market. So that's actually a pretty
durned good absorption rate. It is so moral of the story.
We need more data. What are some other interesting things
(38:18):
that are happening here? The medium sale price we talked
about already is three hundred and sixty five thousand.
Speaker 2 (38:27):
Well, I think another big thing that's going to spring
add momentum and volume to the spring buying season is
Lighthouse is coming back in March. Now, we don't have
this specific date in March when the Lighthouse funds will
be available, and we don't know what the interest rate
will be on this round, but if you know history
tells us anything, they've been right around six percent for
(38:47):
the last few rounds, and this to refresh everyone's memory
that the Lighthouse will give a buyer, a first time
home buyer, four percent in downpayment assistance at a rate
that's about a quarter to a half below market. So
it's a tremendous program. The negative to it is that
a person who uses the program is not able to
(39:09):
refinance that rate for five years, and if they sell
the house within five years, they have to pay the
funds back. So those are the two negatives. But if
you're not planning on selling it immediately or not selling
it in the next five years, it's a great opportunity.
It's a great program to take to take advantage of.
You do have to be in contract before you can
(39:32):
reserve the funds. So for people out looking right now
that are planning on going into contract sometime in the
next few weeks and closing the end of March, Man
oh Man, they will be eligible for a Lighthouse And
I do believe the Lighthouse funds will disappear in a
very short period of time.
Speaker 1 (39:51):
Yeah. I think that's a really good point though, Jerry,
that if anyone is looking for some down payment assistance money,
it's a matter of being very prepared for it. You
can't just say, oh, look, let's let's go out run
by a house, because you know, if you're not prepared,
that money is gone. Last time, it was just a
matter of days.
Speaker 2 (40:09):
If I'm not mistaken, yep, no, I mean it's gone.
One of the rounds went in a couple of hours.
Typically it takes about, you know, a few days to
a week to absorb all the funds, and then people say, well, gosh,
how do I get this money if I if it
runs out so quickly or it gets reserved so quickly. Remember,
a chunk of the people that reserve those funds never
(40:30):
close because they fall out of ESCRO because they buyer
doesn't qualify or be the house, doesn't a praise, or
their repairs or something, and so for a host of reasons,
the when when a deal does fall out, those funds
become available again. So it's just getting on the waiting list.
(40:51):
And I have put people on the waiting list a
handful of times over the past year, and sure enough,
every one of those times they have gotten the money.
Speaker 1 (41:00):
Give Jerry a call if you're looking for some down
payment assistance, or have a friend or family member who
could benefit from a program like that. I actually want
to talk a little bit about this too, Jerry. We
have one of our agents is working with the client
that is really pretty tight on what their budget is,
(41:22):
and we're trying to use some of the tricks out there.
She's perfectly happy with getting a town home or a condo,
or it's just herself. She really wants two bedrooms if possible.
She'd probably be perfectly fine settling with one. But as
we start getting into that market, it's really interesting how
(41:43):
we're trying to determine what is a fair purchase price
to pay. She's roughly qualified for two hundred and twenty thousand,
but the reality is that's not really the right number
because she's qualified for a monthly payment as most buyers,
and when you're in that market for condos, it can
(42:04):
radically vary because of the HOA. That's really a big,
big wild card is in some cases there's some places
out there that have zero HOA and other places it's
pretty pretty hefty at over two hundred bucks a month.
What does two hundred dollars a month calculate out to
in terms of buying power?
Speaker 2 (42:23):
About thirty thousand bucks.
Speaker 1 (42:25):
Yeah, so that that's really pretty powerful. So if we're
comparing one property with a more expensive HOA versus another
one that doesn't have one, that two hundred dollars HOA
calculates out to thirty thousand dollars in buying power. So
that would be the difference between one hundred and ninety
thousand dollars home with the HOA and a two hundred
(42:46):
and twenty thousand without one.
Speaker 2 (42:48):
So absolutely, and you know, I do have some tricks
for andy. Have you ever heard of the MCC credit.
Speaker 1 (42:54):
I think we talked about that recently, but let let's
let's talk some more about that one.
Speaker 2 (42:59):
So for first time home buyers, they can apply for
an MCC credit where it'll get they'll get a two
thousand dollars tax credit every year that they have that home,
and with that that equals you you can use that
two thousand dollars for qualifying, and that gives a buyer
about one hundred and sixty six dollars a month in
income additional income for qualifying. And for someone in that
(43:20):
lower price point, Man oh Man, that is valuable because
that you know that one hundred and sixty six dollars
can make or break it gives them the ability to
maybe buy maybe just a little bit more home, or
if there's a house with an HOA, it'll cover the HOA,
but you can use that additional one hundred and sixty
six dollars a month for qualifying.
Speaker 1 (43:39):
Yeah, that's another really powerful tool, especially when we're into
these situations where like in this particular case, the client
doesn't have a choice in the matter. I mean, she
can go out and rent something, of course, but the
place where she was renting for the past over twenty
years had a management change and they up to rent
by like six hundre undred dollars a month, so they
(44:03):
just made it completely unaffordable. So she opted not to
sign the lease, so she actually has to move. So
that's where finding a property is so key in this case,
and getting the right one that fits the budget has
been pretty tricky.
Speaker 2 (44:18):
So, yeah, that is when you get into that price
point of between one hundred and really even you know,
up to two fifty. It's just there's not a lot
of inventory out there.
Speaker 1 (44:30):
No, there really isn't. And I've been really helping in
that search. In this particular case, she really was looking
for the east side of Tucson to be close to
work and some other things. But there are options out there.
There certainly are. When you're when you're looking for, you know,
the the low end of the market to really hit
the budget. Sometimes it becomes a matter of what are
(44:54):
you willing to give up? Because she has a list
of things she wants, but she can't get everything on
that list. And some homes, you know, are you willing
to give up the extra bedroom? Or we can get
most of the things on our list, but not all
of the things on our list. So it's finding the
best property, as with any buyer, the best property that
you can afford for that particular monthly payment.
Speaker 2 (45:16):
M No, that's right, That is right. That is the key.
I always ask people when I'm taking their application, you know,
I always don't know what they qualify for, which shocks
a lot of people, like, wow, I qualify for that much?
And I said, yep, but that's not what's important. What's
important is what are you comfortable paying every month? And
then you kind of key around the comfortability factor.
Speaker 1 (45:37):
Yep, and don't discount a couple of other things that
are so very important in that factor as well, taxes,
which we don't have a lot of control over, but
taxes can actually vary pretty wildly from similar property to
similar property. Keeping an eye on what the taxes are
is important. And also shop around for your homeowner's insurance.
(45:58):
I mean, that's that's one of the key factors in
the monthly payment, and that homeowner's insurance can can vary
pretty wildly from company to company as well.
Speaker 2 (46:08):
So in the last twelve months, that has been a
major impact on affordability, agreed.
Speaker 1 (46:15):
So that we've talked about insurance costs and rates a
lot in the last several shows, and it continues to
be very impactful. And I don't see these numbers going
down ever.
Speaker 2 (46:27):
You know, again it's with respect to insurance, it's the
cost of construction comes down. If labor comes down, then
we will see insurance come down. But overall, especially with
you know, I know they say that the fires in
California won't affect in homeowners insurance in Arizona, but it
is pretty amazing that the cost of construction does directly
(46:52):
affect the premium on insurance. And I don't know, I
don't see the cost of construction coming down on intention.
Speaker 1 (47:00):
Yeah, I don't think that's coming down at all. So
I think we're going to be stuck with it an
inflationary environment at least for construction costs and insurance cost
in the next number of years. Coming up at any rate,
we are coming up on the end of the show.
Thank you for joining us on this Sunday, this Big
Game Sunday.
Speaker 2 (47:19):
Yeah, Sunday, that's right.
Speaker 1 (47:22):
The next couple of weeks we will be joined by
a special guest star again, Bob Zachmeyer, a previous host
of the show, and he'll be sharing some deeper market
data that he's been tracking for many, many, many years.
So look forward to having you join us again on
next week's show, and we'll see then
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