Episode Transcript
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Speaker 1 (00:03):
Good morning, and welcome to the show. This is Andy Keel,
your host of the Home Solutions Show, powered by the
Win three team and Epic Realty. I'm joined this morning
with Jerry Sunt with Cross Country Mortgage and Bob Zachmeyer
with exp Realty.
Speaker 2 (00:19):
Morning guys, mor and Andy.
Speaker 1 (00:23):
Well, we've got a whole lot of news that came
out this week. An election, all kinds of all kinds
of interesting things. A lot of data that also came
out for October from tuc Soun Association realtors, and some
national articles that I'm going to talk about a.
Speaker 3 (00:43):
Little bit later.
Speaker 1 (00:43):
But Bob, Actually, Bob has some some kind of fun
news that I thought would be fun to share. So
you made a big purchase this week on election Day?
Would you like to talk a little bit more about that, Bob?
Speaker 3 (00:55):
Sure.
Speaker 4 (00:56):
Actually, we were at an RV rally in Utah back
in September and I met the president of newmar Motor
Homes up in Indiana, and I'd met him earlier in
June at a rally up in Colorado. But he was
telling me that, you know, the RV industry has been
decimated by these interest rates and that they didn't want
(01:17):
to make the same mistake they made during the Great Recession,
where they ended up with all this blood of inventory.
So they proactively took their team down to three ten
hour days to keep the employees working and keep their
good help. But you know, basically scale back production right away.
And so right now it's kind of interesting. R V
(01:42):
purchases are you can buy a brand new twenty twenty
five RV cheaper than you can buy a used twenty
twenty two. Does that make any kind of sense to anybody?
So I kind of had the inkling the way the
election was going to go, and I thought, you know
what when they when there's hope on the horizon, I mean,
(02:04):
hope does so much, and I think things are going
to change. And I can just tell you I've got friends,
I'm on multiple groups around the country and Jerry, we can,
you know, ask you how the lending is going.
Speaker 3 (02:17):
But I mean, I have realtors.
Speaker 4 (02:19):
Saying, oh my gosh, I've had this house listed for
two months and I had three offers the next morning
on this on this property. So I was afraid that,
you know, that good deal, that cheap price was going
to go away, and so we actually inked a deal
on an RV and we got twenty eight point six
percent off the window sticker by buying a brand new
(02:42):
customer order pick your own colors and everything. And like
I say, they're selling us twenty twenty two is for
more than we just paid for a twenty twenty five.
Speaker 2 (02:51):
Wow, that is an awesome deal.
Speaker 4 (02:54):
And what's interesting is I actually, you know, have a
lot of clients and friends that invest in notes, and
I am going to finance the difference. We're going to
sell the one we have and use that as a
down payment and then basically finance the difference. And basically,
over a ten year period of time, if I make
(03:18):
the monthly payment out of real estate notes that we hold,
my notes will only go down by about five percent
during that ten year period of time. Meanwhile, the actually, no,
it's almost ten percent. I misspoke, So the notes will
(03:39):
go down by about ten percent the value of what
I'm holding. Meanwhile, you paid for a known depreciating asset.
But I just think right now, it's an amazing time
to go by because the first year of depreciation and
then some is already taken off the books because of
the pricing that you can get. So it's always about
(04:00):
you know, the spread on the money. That's how banks
are in business. They lend at one rate and borrow
at another, so you know, they pay you next to nothing.
They charge us, you know, six seven whatever the rates
are on this week, Jerry. But you know this is
if you can have your money earning more than it's
costing you, that is you know, you'll make the difference
on that and it makes a lot of sense.
Speaker 1 (04:22):
Yeah. I think one of the things that we like
to teach, and certainly something that you've very much taught
over the years, is we try to look at things
from the angle of an investor, and you know, is
it better to borrow the money and then keep the
investments that are earning a higher rate into plague? And
(04:44):
I was just thinking of a couple of years ago,
we had an investor that wanted to buy a brand
new F one fifty. I think the price tag of
that was sixty thousand dollars and what we ended up
doing is buying a single family house with that same amount,
and we worked it out so that the cash flow
on that single family house paid for the truck. Yeah,
(05:07):
and then once the truck, the truck was paid off,
he'd still own the single family house, so it was
much better use of that sixty thousand dollars investment rather
than paying for the truck cash. He bought a house
with it, and the house paid for the truck, and
then we got to keep or what we he got
to keep.
Speaker 4 (05:21):
The house, right, And that's what Robert Kiyosaki, you know,
in his book Reach Dad, Poor Dad, basically said, you know,
you can have all the do dads, the depreciating assets
you want if you have enough appreciating assets to cover it.
So if you can in just one time invest the
money and get that income coming in off the money,
then you can afford to buy things that you know
(05:41):
will go down in value but are nice to have.
I mean, everybody needs a car to get back and forth,
but you can have a nicer car and have your
investment make the payment on it, and at the end
you still own your investment. If you own a thirty
year mortgage and you're taking out a five year car loan,
it makes way more sense than to pay cash for
the car to have the investment make the payments and
(06:01):
still have twenty five years left on the investment when
you're done.
Speaker 1 (06:05):
Yeah, it's almost like looking at if you're going to
bring on a new expense, what investment do you need
to make or which investment is going to pay for that? Like, well,
this note is going to pay for my cable bill
this month and future month, this investment property is going
to make this car payment for me, so on and
(06:25):
so forth. So thinking of it in terms of from
an investor mindset is really what we'd like to do.
Speaker 3 (06:32):
Every note has a name, is what I say.
Speaker 4 (06:34):
And basically when you get when you get enough notes
coming in to pay off every expense that you have
in your life, then that's basically your free and clear.
Speaker 3 (06:43):
I mean, you're in your financial freedom.
Speaker 4 (06:45):
You can do anything you want because all your bills
are being paid by your investments.
Speaker 2 (06:50):
Yeah. So yeah, guys, I got one question for you.
You know, you may mention about f one fifty, and
I guess I'm giving the answer away before the question.
What is the number one card driven by millionaires.
Speaker 1 (07:03):
That would be enough one fifty? Yeah, that is that's
right out a millionaire next door, if I'm not mistaken.
Speaker 2 (07:08):
That is.
Speaker 3 (07:09):
Yeah.
Speaker 4 (07:10):
That's another really good book that just a lot of
people that don't understand money think millionaires just spend money,
and you know, you see all these movie stars that
own homes all over the country and all over the world,
and it's like, man, do you understand the upkeep of
all these houses that you're only using a month or
two out of the year. I mean, it's just ridiculous.
And most of the people that have money are very
(07:33):
frugal with their investments, and it isn't until that money
is earning more than you need that then it can
buy everything that you want and without any out of
pocket for you.
Speaker 1 (07:46):
Yeah, exactly. That's a really good point. I think it's
finally shifting, and the millionaire next door helped shift that mindset.
But most wealthy people that I know, you'd never know
it by looking at them. Yeah, they might drive a
nice car or maybe not. A lot of times they
live in you know, the millionaire next door kind of
(08:08):
house that just an average house, average neighborhood, maybe a
little bit nicer. But rarely do you see truly wealthy
people outwardly displaying huge wealth. It's usually they're very they're
very conservative, and they're very frugal with their spending.
Speaker 2 (08:27):
Well, and I think that's the difference the definition of
being rich versus wealthy. Right, rich will be very flashy
with it. Wealthy is not.
Speaker 4 (08:37):
Yep, and a lot of people I've found that the
truly wealthy people are more than generous with your time.
If you, you know, ask them for help, they'll sit
down and help you. It's the people that are pretending
to be rich that are the ones that don't want
you to pass them. They're trying to put and do
it all for show. And you know what they say
in Texas, big hat, no cattle, right.
Speaker 2 (09:01):
That's funny.
Speaker 1 (09:02):
Yeah, So we have some other interesting data to go over.
So a few things that just came out from the
Tuson Association of Realtors for the October stats. I'd like
to just point out.
Speaker 2 (09:15):
I am so excited for this, my favorite part of
the month.
Speaker 1 (09:18):
Right here what happened in October. So just a couple
of highlights. The three hundred to three ninety nine price
range was definitely the hottest segment of the market three
hundred and fifty two sales. The two hundred to two
ninety nine was the second hottest at two hundred and
(09:38):
sixteen sales, and four hundred to four ninety nine one
fifty four, So probably no big surprise there. Median sale
price three hundred and fifty two thousand, down point one
percent from the previous year, thousand fifteen sales down five
percent from the previous year. Interesting here, the average sale
(10:02):
price is four thirty four to two twenty five, up
two percent from the previous year, which tends to tell me,
which we've already seen a little bit, is that the
over million dollar homes are probably pushing that that average up.
But that's a pretty big difference. But the medium three
point fifty two and the average four to thirty four
just goes to show how how much that gets skewed
(10:24):
by the higher end of the price ranger.
Speaker 4 (10:28):
May you notice that dollars per foot average, they're ony
two hundred and twenty eight dollars per square foot is
what the average home in Tucson sold for.
Speaker 1 (10:36):
Yeah, that's a that's another interesting number. Two hundred and
twenty eight dollars a square foot, which is actually up
from two hundred and nineteen dollars a square foot and
twenty three. If you go back to twenty one, it
was one hundred and eighty seven dollars a square foot.
So we're still seeing some either stability or price appreciation
(10:58):
across the board.
Speaker 4 (11:00):
If you look also at the top, they're Andy, the
it's always supplying demand.
Speaker 3 (11:04):
That's the value of anything.
Speaker 4 (11:05):
And if you look at how many new houses came
on the market last month, eighteen hundred and forty four
houses came on the market, and how many came off
oneenty and fifteen.
Speaker 2 (11:16):
Yep, So it's growing. Inventory is growing.
Speaker 3 (11:19):
Yep.
Speaker 1 (11:20):
Yep.
Speaker 2 (11:22):
Go ahead, Andy, Sorry, oh good, Jerry, No, what I
you know? This goes dougtails on what we were talking
about last week, that we are entering into maybe the
best buying opportunity of the year or of the next
few years, is the next few months because mortgage rates
(11:42):
are expected to fall in twenty twenty five. This is good.
We're entering in the quietest time of the year and
inventory is that is at the highest level of the year.
This is very, very important for buyers that we have
a buyingity opportunity that's very rare.
Speaker 4 (12:00):
All right, and refinanced later, but get that house while
while the economy's down and actually the election right now
there's a big optimism in the market that could drive
prices back up.
Speaker 1 (12:12):
Yeah, So I'll go over a little bit more of
this data when we come back from our break. This
is Andy Keel with the Home Solutions Show on KNST.
We'll be right back. Good morning, and welcome back to
the Home Solutions Show. And this is Andy Keel with
(12:33):
the Win three team powered by Epic Realty. And I'm
joined again with Bob Zachmeyer with exp Realty and Jerry
sent with Cross Country Mortgage. Jerry, would you like to
share your phone number for all of us?
Speaker 2 (12:48):
Absolutely? My phone number is five two zero three seven
zero nine seven six and.
Speaker 1 (12:55):
My number is five to two zero five three nine
five nine one, and Bob feel free to share your number.
Speaker 3 (13:04):
Five two zero three one four sold.
Speaker 4 (13:08):
We are more in the note space now still you know,
doing real estate. But Andy has been an investing partner
of mine for what since twenty eighteen?
Speaker 3 (13:19):
Andy, I believe so yeah.
Speaker 4 (13:21):
So anyway, when I look forward to taking a little
more time off to travel, but also you know, we're
going to stay engaged with our past clients. But Andy's
somebody that I have grown to know as another investor,
which it's very hard to find a real estate agent
that knows investment properties. You know, a lot of people
(13:44):
are just let's sell this house, and let's run comps
for the neighborhood. But really, when you're running a rental property,
the value of that property isn't worth how much the
neighbor's sold for. The value of the property is how
much income it produces, because that's the reason it's being purchased.
Speaker 1 (13:58):
Yeah, exactly, exactly, very different way of looking at things
when you're looking at an income type of approach.
Speaker 4 (14:04):
So, speaking of which, I mean, if you have a
there were a lot of people flipping during COVID. The
apartment sector was just going crazy. And if you had
a million or let's say a hundred unit apartment complex,
and you could go in there and buy that hundred
unit apartment complex and raise the rents by one hundred
dollars per unit, that's one hundred doors paying one hundred
(14:26):
dollars extra, which would increase your income to by ten
thousand a month. That would drive the value of that
apartment complex a million dollars higher immediately, just by raising
the rent of everybody one hundred dollars. And then these
guys were turning around selling those making a spread of
a million dollars and moving along their merry way. And
now you're seeing rents across the country actually fall someone
(14:49):
and some of them are giving back that one hundred
or two hundred dollars and is dropping the value of
those properties. Jared, do you do much on big commercial
properties like that. I do not know, so, I mean
there's some I think some pain coming to the people
that down the road want to sell those properties, and
any thoughts on that.
Speaker 1 (15:09):
Well, I certainly think that that's a pretty tough space
to be in. I mean, it's so rent dependent and
we're in an era where, at least in Tucson for sure,
we saw the rent soften up a little bit. The
data that the MLS puts out, in my opinion, just
is not a proper statistically significant segment of the market
(15:30):
because very few rentals actually get reported in the MLS.
But I know from our portfolio we've definitely seen things
soften up from probably the high was it almost matched
what the prices were doing. I think the best part
of the market was about spring of twenty two, and
we saw a lot of softening, especially coming into twenty three,
and not as much in twenty four, but it's definitely
(15:55):
had some impact and multiply that times like one hundred
doors add unit complex, especially when you're talking about you know,
probably average two bedroom, one bath or even if they're nicer,
what have you type complexes. People tend to, you know,
get into apartments as a as a temporary measure that
(16:16):
generally speaking, would like to eventually own or get into
a single family house. I've never heard anybody say this
is their forever apartment. Yeah, so as the.
Speaker 4 (16:25):
Process, Andy, just think about the apployment. We went to
this week that a gentleman has owned this rental property,
bought it as a short sail back in the recession,
and he had it rented for eighteen hundred dollars. The
value of that property is three sixty. It's a nice
four bedroom, two bath home on the east side, built
in twenty ten, and it's a beautiful home, brand new
(16:47):
air conditioner. But he's had it rented for eighteen hundred
and basically Zillo says the rent should be nineteen ninety five,
and you know, you can. Zillo has a good average
for the area, but doesn't really know anything specifically about
that home. But when you look at what eighteen hundred
dollars a month is, multiply it by twelve and then
(17:08):
divide it by the value of the property. This is
exactly what we talk about every week, is they're making
less than four percent on their equity in that home.
Speaker 3 (17:18):
And this is you know.
Speaker 4 (17:19):
With this election surge, not only is it we've been
gaining inventory, but also buyers are coming out of working. Jerry,
do you notice an upsurgeon calls in the last couple
of days.
Speaker 2 (17:30):
I The upsurgeon called started on Wednesday. It's funny. I mean,
last week, as you know, we discussed, leads were way down,
and it's funny how I think preoccupied the nation was
with respect to the election and just worried about the outcome.
(17:51):
And then you know, as Wednesday came around, the phone
just got very and it just got busy, right people
started saying, Hey, I want to make an offer on
a home, or I'm you know, I think I'm ready
to get approved. And it just like it was almost like,
you know, right the day after Super Bowl Sunday, right
where you know, just like the gun goes off in
the air and everything kind of lighted up again. So
(18:15):
I think everyone was just holding their breath for the outcome.
And now that the unknown is a known, people are
ready to move forward. Now with respect to interest rates,
rates did come down a little bit. They are, you know,
they're sitting right below seven percent. They actually surged on
the on Tuesday before the the or the day of
(18:36):
the election, they actually just searched about seven point three
seven five seven and a quarter and then they've kind
of backed down since then. You know, it is that
great trend going to continue? And will rates continue to soften?
I do believe they will. I think it's going to
be as slow and steady decline and as long as
(18:56):
the economic data that comes out over the next couple
of months is positive and shows inflation going the right
direction and you know, employment doesn't serge, I think we
are headed into finally maybe a lower rate environment. So
that is really again welcome news for buyers.
Speaker 4 (19:15):
Yeah, and especially you had mentioned on a break, Jerry,
about equity line of credits. You want to touch on
that for people that don't want to give up their
low interest loans. I mean, for a while they're equity
line of credits, we're getting into double digits and what
are they now?
Speaker 2 (19:29):
Well, so what happened after the election is a federal
reserve met and they cut rates again a quarter of
a percent. So now the Fed funds rate, which is
different than mor googe rates is you know, this is
the rate that if you're a bank and you want
to borrow from the federal government. That's the rate that
the government's going to charge you. Is it four point
seventy five? And prime rate is three points above that,
(19:51):
so seven point seventy five, and that is the rate.
Prime rate is what equity lines are based on. So
depending upon how much equity a borrower has in their
home and their credit score will define their rate on
the equity line. But equity lines of credit are now
down to seven point seven five to eight and a
half somewhere in that range, which again is almost a
(20:11):
full percentage point three quarters of a percentage point lower
than where they were just you know, sixty days ago.
So as the Fed continues to drop rates, and they
are expected to drop rates again in December by a
quarter of a percent, so I think there's a seventy
or seventy percent probability of that. Again, that's just going
to keep bringing down that cost of that equity line.
(20:34):
And the fact we're saying equity lines of credit in
the sevens is a very welcome news because we haven't
seen that in over a year.
Speaker 1 (20:41):
Wow, where are we with fhava loans? And also like
investor conventional loans.
Speaker 2 (20:49):
Yeah, so investment properties are typically about a half a
percent higher than a primary residence. But if someone puts
twenty five percent down or more, and that's the secret,
So the more you put down on an investment property,
it brings the interest rate way down. So if someone's
putting twenty five percent down, the rate is going to
be about seven and a quarter. If someone's putting forty
(21:12):
percent down, the rate is going to be somewhere about
six point seventy five six point six two five. So
it really brings that rate lower almost in a primary
residence if a borrower puts a big, big chunk down
on an investment property.
Speaker 4 (21:29):
So, Jerry, let's just say that you have a four
hundred thousand dollars home and you owe one hundred on it,
and you've had it for quite some time, like we've
been in our home almost twenty two years. And if
you went and got an equity line of credit equal
to the amount of your loan, and you paid seven
point seventy five, but your first position mortgage like the
one we have is at two point twenty five.
Speaker 3 (21:50):
That would actually.
Speaker 4 (21:52):
Make your rate your blended rate for having an equal
amount out as much as you still owe on your
remaining first mortgage, it would be a a rate of
a blended rate of five. And that's so it makes
more sense to refinance or not refinance, keep the underlying loan,
get a home equity line of credit and end up
with a blended rate of five, rather than go refi
(22:12):
and get a six and three quarters.
Speaker 2 (22:14):
I mean again, your your current rate is a fifteen year,
and fifteen year interest rates are about almost one percent
lower than a thirty year fixed.
Speaker 3 (22:24):
Oh wow, so you know rates.
Speaker 2 (22:26):
For if someone's buying a home on a fifteen year fix,
the rates like five point eight to seventy five right now,
so you know, so it actually the spread if you're
looking at comparing a fifteen year and an equity line
in what you just described, the rate is, you know,
the blended rate for a two point two and a
seven point seventy five equity line, it's going to be
(22:49):
right around five percent. It still makes sense to do
the X line versus a just a cash out refinance
because you're looking at a rate of close to six
percent on a fifteen year fix. But you can see
that the spread is coming down. And as that spread
continues to come down, I think it will make sense
for a lot of people to to go ahead and
(23:10):
do a cash out reefinance versus the equity line. But
at this moment in time your scenario, Bob, that is
the right answer. It's better to do an equity line.
Speaker 3 (23:18):
Gotcha. Awesome?
Speaker 1 (23:20):
Where are we at this this week with FHA and VA.
Speaker 2 (23:25):
Yeah, they're down, you know, they're in They're in the
very low sixes, so you know, six and eight, six
and a quarter something like that, so rates of of
you know, they're they're slowly coming down, but again they're
much higher than where they were in September. I keep
in mind, a thirty year fixed conventional loan was down
about six point one five and now it's at six
(23:45):
point eight seven five, six point nine, So you know,
it was still lower sixty days ago than where it
is today. But since the election, and I think Wall
Street is figuring out the knowns, you know, because there
was all this worry about, like for example, with the
Trump administration, that oh they're going to put they're going
to enact all these tariffs and tariffs are inflationary, so
(24:09):
I think, you know, analysts, we're calculating, well, what does
that mean for inflation in twenty twenty five and twenty
twenty six, And I think what most people are coming
to realize maybe that is a lot of you know,
serious talk, but that you know, tariffs are not going
to be implemented, which is what's helping the ease or
the worry of inflationary risk, you know, expectations in the
(24:33):
next twelve months.
Speaker 1 (24:34):
Okay, well, we are coming up on a break, So
this is Andy Keel with the Home Solutions Show and
we'll be right back. Good morning, and welcome back to
the show. This is Andy Keel with the Home Solutions
Show on KNST and I'm joined again by Bob Zachmeyer
and Jerry Sunt. Before before the first break, we were
(24:56):
talking a little bit about the Tucson market statistics. Man,
I'd like to go back to that for a moment.
Few interesting things that I noticed in the data that
just came out for October. We talked a little bit
about how the sales by price range. Not a big
surprise that the hottest segment of the market was three
(25:17):
hundred to three nine ninety nine. We're also looking at
a few of the other things here. The month of
supply by price range for the zero to two hundred
thousand range four point twenty eight months of supply or
two hundred and seventy eight active listings. Now that section
(25:39):
of the of the range I tend to take with
a little bit of a grain of salt because that
also tends to be the fixer uppers that are thrown
into the mix.
Speaker 4 (25:48):
And also that the new MLS goes all the way
out past Saint David and past Benson and up to
Globe and you know, so it's a lot of very
rural properties that in the past had never been included
in that segment. I'm in Tucson proper. There's like seven
properties under two hundred thousand dollars for sale.
Speaker 1 (26:07):
Yeah, it's it's definitely slim pickens am. I believe manufactured
homes and mobile homes are in that mix too. Yep.
So then we get into the two hundred to two
ninety nine, we've got three point one seven months of
supply or six hundred and seventy two active listings, which
(26:28):
actually is the lowest segment of the market, so two
hundred to three hundred seems to be the as usual,
the hot spot. And again Bob kind of puts this
the real estate being in like a pyramid, where the
base of the pyramid would be the single family homes
that most people find desirable, and as you start getting
(26:49):
into the more rare things like commercial industrial and condos
and manufactured homes, it starts less demand for those things.
And this is the very very base of the pyramid.
The two hundred to three hundred thousand dollars houses in
Tucson are clearly in the most demand of any price
range out there. And then the three hundred to four
(27:11):
hundred thousand price range three point six six months of
supply or twelve hundred and sixty four active listings, and
the number of sales last month for that range is
three hundred and forty five as opposed to the so
about just some quick math, not quite twenty five percent
(27:32):
of those sold, and the two to three hundred range
two hundred and twelve, which is right around just under
a third of those sold, so clearly more demand in
that lower end of the range.
Speaker 4 (27:43):
Back to Jerry's point, though, Andy, I mean, this is
the time to be a buyer. They're you know, in
that range under three hundred thousand. There's six hundred and
seventy two homes available and only two hundred and twelve
sold last month. I mean, we haven't seen numbers like
that in a very very long time.
Speaker 1 (27:58):
Yeah, exactly. And for any one that's out there looking
for just a good starter home, that's certainly a good
range to be looking in. And then what I thought
was kind of curious too as we got into the
regions of Tucson and what happened. We still have the
(28:22):
Northwest is the largest number of sales, one hundred and
eighty sales, which is actually up nine point one percent.
The volume's up. But what I found is really interesting
here with the Northwest, the median sale price is four
hundred and forty thousand dollars, which is down thirty five
thousand dollars. Oh, and the price per square foot is
(28:46):
two hundred and sixty four, which is actually up a
little bit three bucks a square foot. Interesting little piece
of data there. And that's followed by Central being the
second largest number of sales for region, one hundred and
thirty two sales in Central, which is a little lower
volume down eight point three percent. Median sale price on
(29:11):
Central is three hundred and five one ninety five, which
is actually up fifteen thousand, one ninety five on the median,
And that's followed by the East with ninety eight sales
increase of sixteen point seven percent, and the median on
that the East Side homes is actually up two thousand
(29:33):
dollars or three hundred and twelve thousand is the median.
With an average price price per square foot, I'm sorry,
the median price per square foot is two hundred and
seven dollars a foot, which is actually down eight bucks
a foot.
Speaker 3 (29:47):
And Andy on the East signment, you know, you and
I went on.
Speaker 4 (29:49):
That appointment and basically the it's the first time I've
seen this in probably two years, is the average sale
price in that area was one one hundred and one
percent of the asking price. I hadn't seen anything over
one hundred percent in a long time. But that was
a very specific neighborhood like Harrison and Golf Links over
(30:11):
on the East Side, and in that area, it's very
very hot there. It's way more supply or way more
demand than there is supply.
Speaker 1 (30:19):
Yeah, that's certainly a great section of town, and that's
where we tend to find most of our properties that
we buy as east Side as well. And it's certainly
a hot segment of the market. And you can still
find some things out there that are affordable and can
cash flow if you really look closely, what other interesting
(30:39):
things are out here? In this data, single family residents
eight hundred and twenty nine sales actually down one point
nine percent overall median sale price three hundred and eighty thousand,
which is down five thousand dollars.
Speaker 4 (31:00):
Crisis fell five thousand. That just means that the medium
the less expensive homes.
Speaker 1 (31:04):
That is true. That is true. The statistics on the
sales by square footage I find rather interesting too. The
number one segment for houses by square footage is fifteen
hundred to nineteen ninety nine square feet that had three
(31:25):
hundred and thirty eight sales, followed one thousand to fourteen
ninety nine square feet two hundred and ninety six sales,
and then two thousand to twenty four ninety nine square
feet was one hundred and seventy one sales of that mix.
So again, if you're looking at what seems to be
in the most demand, fifteen hundred to two thousand square feet,
(31:49):
is is the hot spot? And then the.
Speaker 4 (31:53):
Number over Yeah five thousand. Only seven homes sold above
five thousand square feet.
Speaker 2 (31:58):
Yeah, that's a big house. It's a lot to maintain.
You know. It's funny, you know we look at October numbers.
You know, you're talking about basically contracts written in September,
which is when interest rates for lower. It'll be interesting
to watch, and I guess we say this every month,
but what next month will bring? Like? What will November
(32:21):
sales look like? Because as you know, interest rates rose
in October and into in early November. You wonder if
that November numbers are going to be lower, and seasonally
they are every year lower than so it'll be interesting.
Is there a pending sales number that shows up on
(32:43):
that report?
Speaker 1 (32:45):
Yeah, as a matter of fact, there is. So the
pendings for October, and I have the data that goes
back to twenty twenty one. I actually found this rather interesting.
The pendings in October was one thousand and fifty five. Okay,
in twenty twenty three it was one thousand and forty eight,
So we actually have more pendings this year than last
(33:07):
twenty twenty two it was one thousand and fifty seven.
So the last three years it's been incredibly consistent.
Speaker 2 (33:13):
That is consistent, isn't it.
Speaker 1 (33:15):
Yeah, until we go back to twenty twenty one, where
it was about fifty percent higher fifteen hundred and seventy
six pendings in October of twenty one, but twenty two,
twenty three, twenty four incredibly consistent. Then actually, if you're
looking at the new listing count find this kind of interesting.
Goes back to the same point. Now really is a
(33:36):
good time to buy new listings In October eighteen hundred
and forty four came on the market, as opposed to
twenty twenty three where we had only sixteen sixteen. Twenty
twenty two was fifteen fifty eight, and then we had
a lot of new listings. In October of twenty one,
twenty one, one hundred and fourteen came on the market,
(34:00):
and what you go to the other side of the
equation and see what's sold in the same timeframe. The
number of sales in October twenty twenty four is one
thoy fifteen, which is down a little bit from twenty
three one thousand and sixty eight twenty twenty two, one thousand,
(34:20):
and sixty two and October of twenty twenty one we
had fifteen hundred and ten sales. So what we were
seeing in October of twenty one, we had a lot
more listings come on, but virtually all of them were selling.
If you're looking at this year, a lot of them
are coming on and not nearly as many are selling.
(34:43):
So again that leads us to give us some buyer
opportunities and there's a little bit more to choose from.
Speaker 2 (34:53):
Yep. Again great news to a buyer's ears.
Speaker 4 (34:58):
So the thing that's going to drive the prices is supply.
When there's more supply, there's less demand. The best properties
are going to continue to sell immediately.
Speaker 3 (35:06):
The ones that.
Speaker 4 (35:07):
Aren't as popular are going to stay on the market longer.
They're going to have price reductions, and that's going to
drive neighborhood values lower. But still the nicest houses in
the neighborhood are going to fly off the shelf because
of a lack of supply. And still, even though it's
higher than it was, we're still a very very low
supply of homes. But you know, Jerry and I have
(35:28):
been talking for two years now about affordability, and you know,
if you figure the average home in Tucson or the
median is over four hundred thousand dollars the average. And
you know, if you figure a seven percent loan, the
payment on that, if you borrow four hundred thousand at
seven percent, it's like.
Speaker 3 (35:50):
Twenty six hundred and sixty one dollars.
Speaker 4 (35:52):
So even if rates came down to six even, it
would drop by two hundred and sixty three bucks.
Speaker 3 (35:58):
It's twenty three ninety eight.
Speaker 4 (36:00):
And even if ver eats went all the way down
to five, it's still twenty one hundred and forty seven dollars.
So if you are an investor, you definitely want to
stay in the lower end of the market where affordability
exists higher priced homes. As we illustrated only seven houses
with five thousand square feet or more sold last month
(36:20):
out of one thousand and eighteen or one thousand and
fifty five that actually are under contract to be sold
next month.
Speaker 1 (36:29):
Exactly. And with that we are coming up on a
break again. This is Andy Keel with the Home Solutions
Show on KNST. Good morning, and welcome back to the show.
This is Andy Keel with the Win three team powered
(36:49):
by Epic Realty and I'm joined once again by Bob
Zachmeyer and Jerry Sunt and I have a couple of
articles that came out this week that they thought were timely,
and one of them that I was looking at is
one that is titled rapidly rising rents squeeze millions in
(37:09):
the middle class. Rent costs have longwagight on lower income households.
Now it's coming for the middle class. Nearly four and
ten middle class renter households are burdened by cost. An
NBC News analyst found that's up almost twenty percent since
twenty nineteen. Well, the already high shareff cost burdened low
(37:31):
income households rose just two percent. A cost burdened household
is defined as one paying thirty percent or more of
pre tax income on rent and housing costs. I'll pause
there for a second because I'm thinking back just to
the what we would refer to as the front end
(37:52):
ratio on a loan, and like Jerry to talk about
that for a moment, And yeah, I.
Speaker 2 (37:58):
Mean, historically it's supposed to twenty nine for housing, that
or shelter expense will be twenty nine percent of the dollar,
and so that number is still you know, obviously thirty
percent and above is above average. But you know, there's
some segments of the marketplace in the US high cost
of living areas where people spend almost fifty percent of
(38:21):
every dollar on housing. Northern California is a great, great
example of this. So it's I think part of this
is really about what people's comfort level is as far
as what they want to spend their money, right. I mean,
there's an analytical side where a dollar can only be
chopped up so many ways. But if people have the
(38:44):
confidence and realize that they're buying a house, and they
may be you know, putting more of their dollar into
housing and that they will not be able to spend
that money on travel or other goods. But when they
realize that, hey, this is investing for your future, I mean,
we have to go back to the fundamentals of why
(39:04):
we own real estate. It is the number one building
block for building wealth in America. There's just there's no
athens or but stock markets number two. So you have
to buy a house at some point if you really
want to get ahead and look at retirement. You know,
it's just so then it goes back to, Okay, how
(39:27):
much are you comfortable or willing to spend out of
your monthly budget towards alse.
Speaker 1 (39:34):
Yeah, exactly. So another article that came out is September
home sales. So we're just talking about October with Tucson
and now we're talking about nationwide. But September home sales
dropped to lowest level since twenty ten. Yeah, sales have
previously owned homes fell one percent in September compared with August,
to a seasonally adjusted annualized rate of three point eight
(39:57):
four million units, the slowest pace ins October twenty ten.
According to the National Association of Realtors, sales were three
point five percent lower than its September of twenty twenty three.
Sales fell in three out of four US regions, with
just West regioncying a gain. This count is based on
closings representing contracts signed likely in July and August. Mortgage
(40:21):
rates started July near seven percent on the thirty year
fixed rate, then fell slowly through August to just below
six point five. Rates are now more than a full
percentage point lower than they were a year ago. Well,
that's a little.
Speaker 2 (40:33):
Bit that stated me.
Speaker 1 (40:37):
Even though this article came out this week, they're talking
about some day to data, aren't they But home sales
have been essentially stuck at around four million unit pace
for the past twelve months, but factors usually associated with
higher home sales are developing. Chief economists for the National
Association of Realtors said, inventory ahead.
Speaker 2 (41:00):
Go ahead, please don't continue. Andy.
Speaker 1 (41:02):
Inventory rows one point five percent month to month to
one point three nine million homes for sale at the
end of September. That represents a four point three month
supply at the current sales pace. Inventory was twenty three
percent higher from September of twenty twenty three, and I
always look at this month's supply, I see four point three.
(41:26):
We talked recently about certain segments of the market here
in Tucson. We're heading towards a five month supply, and
historically I always think five to six months of supply
is about a neutral market. And we start getting over six,
it starts getting into more of a heavy buyer's market,
meaning the buyers have plenty to choose from and usually
(41:46):
have a bit of an advantage. So I still feel
like we're heading towards a neutral market.
Speaker 2 (41:53):
Yeah, there have been many studies with respect to when
will you know more inventory be coming on the market.
And when will buyers who who are or owners they
should say they have they're a three percent mortgage, When
are they willing to get rid of that mortgage and
you know, and trade up to a different house and
(42:14):
get rid of that rate. You know, a lot of
people love the interest rate they have, but they don't
love the house that they're in, but they're frozen to
go buy a because they don't want to get rid
of that their their three percent interest rate, or b
they can't afford a more expensive payment. So there's two things.
But the magic number is five and a half percent
(42:35):
on a thirty year fix. When rates get down to
five and a half is when they and there's been
many studies on this that that people will be willing
to give up their lower interest rates and sell that
house use their equity to go buy a new house.
So I really think twenty twenty five is going to
going to have a big surge in the move up
market simply because if rates get down to that level,
(42:58):
and they are expected to by mid twenty twenty five,
we're going to see a big surgeon in in you know,
in resales.
Speaker 1 (43:08):
Yeah, we certainly hope.
Speaker 4 (43:10):
Yeah, Actually you know, most people with the low interest
rates they have are and especially now they've had it
three or four years, they're gaining equity on their loan
faster than they've ever gotten it before. And you know,
that's something that I think is giving them the equity
to move forward. Even though rates are higher, the amount
they need to borrow won't be any different because the
(43:31):
value of the house they have is still increasing because
of a low supply and a high demand.
Speaker 1 (43:38):
There's one other section of this article that I found interesting.
The median price of an existing home sold in September
was four hundred and four thousand, five hundred, and we
just talked about that in the previous segment for two sons,
So we're still below the national median in twoson at
this point by roughly for so I still think this
(44:01):
is a great market to be looking in hundred and
then there's another one here, how hard is it to
buy a home right now? NBC News home Buyer Index
measures the market. Just a couple quick points that I
wanted to make. They put out this home Buyer Index,
(44:25):
which is a number on a scale between zero and
one hundred representing the difficulty potential buyer faces and trying
to buy a home. The higher the index value, the
higher the difficulty. And they had this this lovely map
up of the United States and you could kind of
just hover over which which county and what the pricing is.
So I won't go into too much detail on this,
(44:46):
but I was really fascinated by one one piece of
data in this article before I mentioned that Pima County
came in at sixty five point nine percent, and again
the HUT, the higher the number, the higher the difficulty
as opposed to Maricopa County, which is Phoenix, was actually
(45:07):
lower sixty point nine percent or nine percent. Sorry, that's
just a number one to one hundred number. But part
of this was fascinating to me because prices are soaring
in Cocanino County, Arizona, making it one of the twenty
five most difficult counties to buy a home in. As
of May five years ago, it was ranked three hundred,
(45:31):
but the sales price has increased eighty one percent, nearly
twice the national figure.
Speaker 3 (45:37):
Wow.
Speaker 1 (45:39):
I was pretty blown away by that. And that's basically
the flag Staff and Sedona market. If I'm not mistaken, Yeah.
Speaker 4 (45:48):
Flag Staff is landlocked. I mean, there's National fourth on
all sides. And I have a friend that's a builder
up there, and he's pretty much decided in the next
year or two he's going to have to hang up being.
Speaker 3 (45:57):
A builder because there's nothing left the build on.
Speaker 1 (46:00):
Well, that would certainly explain why the prices are jumping
so much if they're running out of land to build
and the only thing left is what's already existing, which
tends to push the prices higher.
Speaker 4 (46:10):
And you know, a normal residential lot, they're actually they're
actually putting a driveway down the middle and building four houses,
one in each corner of that lot.
Speaker 2 (46:19):
Wow are they are they like, you know, like seven
hundred square foot homes?
Speaker 4 (46:25):
They Oh, no, they're bigger. They're bigger houses. I mean,
they're they're reducing the setbacks there. I mean, because there's
a housing shortage in flag Staff, so they're really promoting
anything they can get. And and I was just up
there last month they are actually two months ago in September,
and went out to eat with them and they're like, yeah,
we're gonna be out of business. So, I mean, he's
(46:46):
bought a restaurant and he's got some other businesses started
because his building business is going to be done. There's
nothing left to build on.
Speaker 3 (46:55):
Wow, and and and.
Speaker 4 (46:58):
The weather is so beautiful and flag Staff their snow
there now, but in the in the summertime, what a
difference to just leave here and in a few hours
be in this nice cool pine trees all over the place.
Speaker 3 (47:09):
That's awesome.
Speaker 2 (47:11):
Yeah, we're sure.
Speaker 1 (47:12):
We have a couple of friends that have cabins up
up north in that general range between Flagstaff and like
Sholo and some of the areas up there. And what
I've always been blown away with, specifically the Sholo areas,
is going up there and just having a wonderful you know,
(47:33):
high seventies degree temperatures in the summertime, but sitting outside
and not having any mosquitoes. That always just I thought
was was wonderful. And I'm not used to that in
too many areas of the country as to be able
to sit outside and not have the bugs bug you.
Speaker 2 (47:49):
Right.
Speaker 1 (47:52):
So anyway, we are coming up to the end of
the show again. My name is Andy Keel with Epic
Real the Win three team, and my number is five
two zero five three nine nine five nine one. And
Jerriett once again, if you would share your phone number.
Speaker 2 (48:11):
Yeah five two zero three seven zero nine five seven
six and Bob.
Speaker 3 (48:18):
Sure five two zero three one four sold and have
a great Sunday, all right.
Speaker 1 (48:23):
And that takes us to the end of the show.
Thanks for listening and have a great Sunday everyone,
Good morning, and welcome to the show. This is Andy Keel,
your host of the Home Solutions Show, powered by the
Win three team and Epic Realty. I'm joined this morning
with Jerry Sunt with Cross Country Mortgage and Bob Zachmeyer
with exp Realty.
Speaker 2 (00:19):
Morning guys, mor and Andy.
Speaker 1 (00:23):
Well, we've got a whole lot of news that came
out this week. An election, all kinds of all kinds
of interesting things. A lot of data that also came
out for October from tuc Soun Association realtors, and some
national articles that I'm going to talk about a.
Speaker 3 (00:43):
Little bit later.
Speaker 1 (00:43):
But Bob, Actually, Bob has some some kind of fun
news that I thought would be fun to share. So
you made a big purchase this week on election Day?
Would you like to talk a little bit more about that, Bob?
Speaker 3 (00:55):
Sure.
Speaker 4 (00:56):
Actually, we were at an RV rally in Utah back
in September and I met the president of newmar Motor
Homes up in Indiana, and I'd met him earlier in
June at a rally up in Colorado. But he was
telling me that, you know, the RV industry has been
decimated by these interest rates and that they didn't want
(01:17):
to make the same mistake they made during the Great Recession,
where they ended up with all this blood of inventory.
So they proactively took their team down to three ten
hour days to keep the employees working and keep their
good help. But you know, basically scale back production right away.
And so right now it's kind of interesting. R V
(01:42):
purchases are you can buy a brand new twenty twenty
five RV cheaper than you can buy a used twenty
twenty two. Does that make any kind of sense to anybody?
So I kind of had the inkling the way the
election was going to go, and I thought, you know
what when they when there's hope on the horizon, I mean,
(02:04):
hope does so much, and I think things are going
to change. And I can just tell you I've got friends,
I'm on multiple groups around the country and Jerry, we can,
you know, ask you how the lending is going.
Speaker 3 (02:17):
But I mean, I have realtors.
Speaker 4 (02:19):
Saying, oh my gosh, I've had this house listed for
two months and I had three offers the next morning
on this on this property. So I was afraid that,
you know, that good deal, that cheap price was going
to go away, and so we actually inked a deal
on an RV and we got twenty eight point six
percent off the window sticker by buying a brand new
(02:42):
customer order pick your own colors and everything. And like
I say, they're selling us twenty twenty two is for
more than we just paid for a twenty twenty five.
Speaker 2 (02:51):
Wow, that is an awesome deal.
Speaker 4 (02:54):
And what's interesting is I actually, you know, have a
lot of clients and friends that invest in notes, and
I am going to finance the difference. We're going to
sell the one we have and use that as a
down payment and then basically finance the difference. And basically,
over a ten year period of time, if I make
(03:18):
the monthly payment out of real estate notes that we hold,
my notes will only go down by about five percent
during that ten year period of time. Meanwhile, the actually, no,
it's almost ten percent. I misspoke, So the notes will
(03:39):
go down by about ten percent the value of what
I'm holding. Meanwhile, you paid for a known depreciating asset.
But I just think right now, it's an amazing time
to go by because the first year of depreciation and
then some is already taken off the books because of
the pricing that you can get. So it's always about
(04:00):
you know, the spread on the money. That's how banks
are in business. They lend at one rate and borrow
at another, so you know, they pay you next to nothing.
They charge us, you know, six seven whatever the rates
are on this week, Jerry. But you know this is
if you can have your money earning more than it's
costing you, that is you know, you'll make the difference
on that and it makes a lot of sense.
Speaker 1 (04:22):
Yeah. I think one of the things that we like
to teach, and certainly something that you've very much taught
over the years, is we try to look at things
from the angle of an investor, and you know, is
it better to borrow the money and then keep the
investments that are earning a higher rate into plague? And
(04:44):
I was just thinking of a couple of years ago,
we had an investor that wanted to buy a brand
new F one fifty. I think the price tag of
that was sixty thousand dollars and what we ended up
doing is buying a single family house with that same amount,
and we worked it out so that the cash flow
on that single family house paid for the truck. Yeah,
(05:07):
and then once the truck, the truck was paid off,
he'd still own the single family house, so it was
much better use of that sixty thousand dollars investment rather
than paying for the truck cash. He bought a house
with it, and the house paid for the truck, and
then we got to keep or what we he got
to keep.
Speaker 4 (05:21):
The house, right, And that's what Robert Kiyosaki, you know,
in his book Reach Dad, Poor Dad, basically said, you know,
you can have all the do dads, the depreciating assets
you want if you have enough appreciating assets to cover it.
So if you can in just one time invest the
money and get that income coming in off the money,
then you can afford to buy things that you know
(05:41):
will go down in value but are nice to have.
I mean, everybody needs a car to get back and forth,
but you can have a nicer car and have your
investment make the payment on it, and at the end
you still own your investment. If you own a thirty
year mortgage and you're taking out a five year car loan,
it makes way more sense than to pay cash for
the car to have the investment make the payments and
(06:01):
still have twenty five years left on the investment when
you're done.
Speaker 1 (06:05):
Yeah, it's almost like looking at if you're going to
bring on a new expense, what investment do you need
to make or which investment is going to pay for that? Like, well,
this note is going to pay for my cable bill
this month and future month, this investment property is going
to make this car payment for me, so on and
(06:25):
so forth. So thinking of it in terms of from
an investor mindset is really what we'd like to do.
Speaker 3 (06:32):
Every note has a name, is what I say.
Speaker 4 (06:34):
And basically when you get when you get enough notes
coming in to pay off every expense that you have
in your life, then that's basically your free and clear.
Speaker 3 (06:43):
I mean, you're in your financial freedom.
Speaker 4 (06:45):
You can do anything you want because all your bills
are being paid by your investments.
Speaker 2 (06:50):
Yeah. So yeah, guys, I got one question for you.
You know, you may mention about f one fifty, and
I guess I'm giving the answer away before the question.
What is the number one card driven by millionaires.
Speaker 1 (07:03):
That would be enough one fifty? Yeah, that is that's
right out a millionaire next door, if I'm not mistaken.
Speaker 2 (07:08):
That is.
Speaker 3 (07:09):
Yeah.
Speaker 4 (07:10):
That's another really good book that just a lot of
people that don't understand money think millionaires just spend money,
and you know, you see all these movie stars that
own homes all over the country and all over the world,
and it's like, man, do you understand the upkeep of
all these houses that you're only using a month or
two out of the year. I mean, it's just ridiculous.
And most of the people that have money are very
(07:33):
frugal with their investments, and it isn't until that money
is earning more than you need that then it can
buy everything that you want and without any out of
pocket for you.
Speaker 1 (07:46):
Yeah, exactly. That's a really good point. I think it's
finally shifting, and the millionaire next door helped shift that mindset.
But most wealthy people that I know, you'd never know
it by looking at them. Yeah, they might drive a
nice car or maybe not. A lot of times they
live in you know, the millionaire next door kind of
(08:08):
house that just an average house, average neighborhood, maybe a
little bit nicer. But rarely do you see truly wealthy
people outwardly displaying huge wealth. It's usually they're very they're
very conservative, and they're very frugal with their spending.
Speaker 2 (08:27):
Well, and I think that's the difference the definition of
being rich versus wealthy. Right, rich will be very flashy
with it. Wealthy is not.
Speaker 4 (08:37):
Yep, and a lot of people I've found that the
truly wealthy people are more than generous with your time.
If you, you know, ask them for help, they'll sit
down and help you. It's the people that are pretending
to be rich that are the ones that don't want
you to pass them. They're trying to put and do
it all for show. And you know what they say
in Texas, big hat, no cattle, right.
Speaker 2 (09:01):
That's funny.
Speaker 1 (09:02):
Yeah, So we have some other interesting data to go over.
So a few things that just came out from the
Tuson Association of Realtors for the October stats. I'd like
to just point out.
Speaker 2 (09:15):
I am so excited for this, my favorite part of
the month.
Speaker 1 (09:18):
Right here what happened in October. So just a couple
of highlights. The three hundred to three ninety nine price
range was definitely the hottest segment of the market three
hundred and fifty two sales. The two hundred to two
ninety nine was the second hottest at two hundred and
(09:38):
sixteen sales, and four hundred to four ninety nine one
fifty four, So probably no big surprise there. Median sale
price three hundred and fifty two thousand, down point one
percent from the previous year, thousand fifteen sales down five
percent from the previous year. Interesting here, the average sale
(10:02):
price is four thirty four to two twenty five, up
two percent from the previous year, which tends to tell me,
which we've already seen a little bit, is that the
over million dollar homes are probably pushing that that average up.
But that's a pretty big difference. But the medium three
point fifty two and the average four to thirty four
just goes to show how how much that gets skewed
(10:24):
by the higher end of the price ranger.
Speaker 4 (10:28):
May you notice that dollars per foot average, they're ony
two hundred and twenty eight dollars per square foot is
what the average home in Tucson sold for.
Speaker 1 (10:36):
Yeah, that's a that's another interesting number. Two hundred and
twenty eight dollars a square foot, which is actually up
from two hundred and nineteen dollars a square foot and
twenty three. If you go back to twenty one, it
was one hundred and eighty seven dollars a square foot.
So we're still seeing some either stability or price appreciation
(10:58):
across the board.
Speaker 4 (11:00):
If you look also at the top, they're Andy, the
it's always supplying demand.
Speaker 3 (11:04):
That's the value of anything.
Speaker 4 (11:05):
And if you look at how many new houses came
on the market last month, eighteen hundred and forty four
houses came on the market, and how many came off
oneenty and fifteen.
Speaker 2 (11:16):
Yep, So it's growing. Inventory is growing.
Speaker 3 (11:19):
Yep.
Speaker 1 (11:20):
Yep.
Speaker 2 (11:22):
Go ahead, Andy, Sorry, oh good, Jerry, No, what I
you know? This goes dougtails on what we were talking
about last week, that we are entering into maybe the
best buying opportunity of the year or of the next
few years, is the next few months because mortgage rates
(11:42):
are expected to fall in twenty twenty five. This is good.
We're entering in the quietest time of the year and
inventory is that is at the highest level of the year.
This is very, very important for buyers that we have
a buyingity opportunity that's very rare.
Speaker 4 (12:00):
All right, and refinanced later, but get that house while
while the economy's down and actually the election right now
there's a big optimism in the market that could drive
prices back up.
Speaker 1 (12:12):
Yeah, So I'll go over a little bit more of
this data when we come back from our break. This
is Andy Keel with the Home Solutions Show on KNST.
We'll be right back. Good morning, and welcome back to
the Home Solutions Show. And this is Andy Keel with
(12:33):
the Win three team powered by Epic Realty. And I'm
joined again with Bob Zachmeyer with exp Realty and Jerry
sent with Cross Country Mortgage. Jerry, would you like to
share your phone number for all of us?
Speaker 2 (12:48):
Absolutely? My phone number is five two zero three seven
zero nine seven six and.
Speaker 1 (12:55):
My number is five to two zero five three nine
five nine one, and Bob feel free to share your number.
Speaker 3 (13:04):
Five two zero three one four sold.
Speaker 4 (13:08):
We are more in the note space now still you know,
doing real estate. But Andy has been an investing partner
of mine for what since twenty eighteen?
Speaker 3 (13:19):
Andy, I believe so yeah.
Speaker 4 (13:21):
So anyway, when I look forward to taking a little
more time off to travel, but also you know, we're
going to stay engaged with our past clients. But Andy's
somebody that I have grown to know as another investor,
which it's very hard to find a real estate agent
that knows investment properties. You know, a lot of people
(13:44):
are just let's sell this house, and let's run comps
for the neighborhood. But really, when you're running a rental property,
the value of that property isn't worth how much the
neighbor's sold for. The value of the property is how
much income it produces, because that's the reason it's being purchased.
Speaker 1 (13:58):
Yeah, exactly, exactly, very different way of looking at things
when you're looking at an income type of approach.
Speaker 4 (14:04):
So, speaking of which, I mean, if you have a
there were a lot of people flipping during COVID. The
apartment sector was just going crazy. And if you had
a million or let's say a hundred unit apartment complex,
and you could go in there and buy that hundred
unit apartment complex and raise the rents by one hundred
dollars per unit, that's one hundred doors paying one hundred
(14:26):
dollars extra, which would increase your income to by ten
thousand a month. That would drive the value of that
apartment complex a million dollars higher immediately, just by raising
the rent of everybody one hundred dollars. And then these
guys were turning around selling those making a spread of
a million dollars and moving along their merry way. And
now you're seeing rents across the country actually fall someone
(14:49):
and some of them are giving back that one hundred
or two hundred dollars and is dropping the value of
those properties. Jared, do you do much on big commercial
properties like that. I do not know, so, I mean
there's some I think some pain coming to the people
that down the road want to sell those properties, and
any thoughts on that.
Speaker 1 (15:09):
Well, I certainly think that that's a pretty tough space
to be in. I mean, it's so rent dependent and
we're in an era where, at least in Tucson for sure,
we saw the rent soften up a little bit. The
data that the MLS puts out, in my opinion, just
is not a proper statistically significant segment of the market
(15:30):
because very few rentals actually get reported in the MLS.
But I know from our portfolio we've definitely seen things
soften up from probably the high was it almost matched
what the prices were doing. I think the best part
of the market was about spring of twenty two, and
we saw a lot of softening, especially coming into twenty three,
and not as much in twenty four, but it's definitely
(15:55):
had some impact and multiply that times like one hundred
doors add unit complex, especially when you're talking about you know,
probably average two bedroom, one bath or even if they're nicer,
what have you type complexes. People tend to, you know,
get into apartments as a as a temporary measure that
(16:16):
generally speaking, would like to eventually own or get into
a single family house. I've never heard anybody say this
is their forever apartment. Yeah, so as the.
Speaker 4 (16:25):
Process, Andy, just think about the apployment. We went to
this week that a gentleman has owned this rental property,
bought it as a short sail back in the recession,
and he had it rented for eighteen hundred dollars. The
value of that property is three sixty. It's a nice
four bedroom, two bath home on the east side, built
in twenty ten, and it's a beautiful home, brand new
(16:47):
air conditioner. But he's had it rented for eighteen hundred
and basically Zillo says the rent should be nineteen ninety five,
and you know, you can. Zillo has a good average
for the area, but doesn't really know anything specifically about
that home. But when you look at what eighteen hundred
dollars a month is, multiply it by twelve and then
(17:08):
divide it by the value of the property. This is
exactly what we talk about every week, is they're making
less than four percent on their equity in that home.
Speaker 3 (17:18):
And this is you know.
Speaker 4 (17:19):
With this election surge, not only is it we've been
gaining inventory, but also buyers are coming out of working. Jerry,
do you notice an upsurgeon calls in the last couple
of days.
Speaker 2 (17:30):
I The upsurgeon called started on Wednesday. It's funny. I mean,
last week, as you know, we discussed, leads were way down,
and it's funny how I think preoccupied the nation was
with respect to the election and just worried about the outcome.
(17:51):
And then you know, as Wednesday came around, the phone
just got very and it just got busy, right people
started saying, Hey, I want to make an offer on
a home, or I'm you know, I think I'm ready
to get approved. And it just like it was almost like,
you know, right the day after Super Bowl Sunday, right
where you know, just like the gun goes off in
the air and everything kind of lighted up again. So
(18:15):
I think everyone was just holding their breath for the outcome.
And now that the unknown is a known, people are
ready to move forward. Now with respect to interest rates,
rates did come down a little bit. They are, you know,
they're sitting right below seven percent. They actually surged on
the on Tuesday before the the or the day of
(18:36):
the election, they actually just searched about seven point three
seven five seven and a quarter and then they've kind
of backed down since then. You know, it is that
great trend going to continue? And will rates continue to soften?
I do believe they will. I think it's going to
be as slow and steady decline and as long as
(18:56):
the economic data that comes out over the next couple
of months is positive and shows inflation going the right
direction and you know, employment doesn't serge, I think we
are headed into finally maybe a lower rate environment. So
that is really again welcome news for buyers.
Speaker 4 (19:15):
Yeah, and especially you had mentioned on a break, Jerry,
about equity line of credits. You want to touch on
that for people that don't want to give up their
low interest loans. I mean, for a while they're equity
line of credits, we're getting into double digits and what
are they now?
Speaker 2 (19:29):
Well, so what happened after the election is a federal
reserve met and they cut rates again a quarter of
a percent. So now the Fed funds rate, which is
different than mor googe rates is you know, this is
the rate that if you're a bank and you want
to borrow from the federal government. That's the rate that
the government's going to charge you. Is it four point
seventy five? And prime rate is three points above that,
(19:51):
so seven point seventy five, and that is the rate.
Prime rate is what equity lines are based on. So
depending upon how much equity a borrower has in their
home and their credit score will define their rate on
the equity line. But equity lines of credit are now
down to seven point seven five to eight and a
half somewhere in that range, which again is almost a
(20:11):
full percentage point three quarters of a percentage point lower
than where they were just you know, sixty days ago.
So as the Fed continues to drop rates, and they
are expected to drop rates again in December by a
quarter of a percent, so I think there's a seventy
or seventy percent probability of that. Again, that's just going
to keep bringing down that cost of that equity line.
(20:34):
And the fact we're saying equity lines of credit in
the sevens is a very welcome news because we haven't
seen that in over a year.
Speaker 1 (20:41):
Wow, where are we with fhava loans? And also like
investor conventional loans.
Speaker 2 (20:49):
Yeah, so investment properties are typically about a half a
percent higher than a primary residence. But if someone puts
twenty five percent down or more, and that's the secret,
So the more you put down on an investment property,
it brings the interest rate way down. So if someone's
putting twenty five percent down, the rate is going to
be about seven and a quarter. If someone's putting forty
(21:12):
percent down, the rate is going to be somewhere about
six point seventy five six point six two five. So
it really brings that rate lower almost in a primary
residence if a borrower puts a big, big chunk down
on an investment property.
Speaker 4 (21:29):
So, Jerry, let's just say that you have a four
hundred thousand dollars home and you owe one hundred on it,
and you've had it for quite some time, like we've
been in our home almost twenty two years. And if
you went and got an equity line of credit equal
to the amount of your loan, and you paid seven
point seventy five, but your first position mortgage like the
one we have is at two point twenty five.
Speaker 3 (21:50):
That would actually.
Speaker 4 (21:52):
Make your rate your blended rate for having an equal
amount out as much as you still owe on your
remaining first mortgage, it would be a a rate of
a blended rate of five. And that's so it makes
more sense to refinance or not refinance, keep the underlying loan,
get a home equity line of credit and end up
with a blended rate of five, rather than go refi
(22:12):
and get a six and three quarters.
Speaker 2 (22:14):
I mean again, your your current rate is a fifteen year,
and fifteen year interest rates are about almost one percent
lower than a thirty year fixed.
Speaker 3 (22:24):
Oh wow, so you know rates.
Speaker 2 (22:26):
For if someone's buying a home on a fifteen year fix,
the rates like five point eight to seventy five right now,
so you know, so it actually the spread if you're
looking at comparing a fifteen year and an equity line
in what you just described, the rate is, you know,
the blended rate for a two point two and a
seven point seventy five equity line, it's going to be
(22:49):
right around five percent. It still makes sense to do
the X line versus a just a cash out refinance
because you're looking at a rate of close to six
percent on a fifteen year fix. But you can see
that the spread is coming down. And as that spread
continues to come down, I think it will make sense
for a lot of people to to go ahead and
(23:10):
do a cash out reefinance versus the equity line. But
at this moment in time your scenario, Bob, that is
the right answer. It's better to do an equity line.
Speaker 3 (23:18):
Gotcha. Awesome?
Speaker 1 (23:20):
Where are we at this this week with FHA and VA.
Speaker 2 (23:25):
Yeah, they're down, you know, they're in They're in the
very low sixes, so you know, six and eight, six
and a quarter something like that, so rates of of
you know, they're they're slowly coming down, but again they're
much higher than where they were in September. I keep
in mind, a thirty year fixed conventional loan was down
about six point one five and now it's at six
(23:45):
point eight seven five, six point nine, So you know,
it was still lower sixty days ago than where it
is today. But since the election, and I think Wall
Street is figuring out the knowns, you know, because there
was all this worry about, like for example, with the
Trump administration, that oh they're going to put they're going
to enact all these tariffs and tariffs are inflationary, so
(24:09):
I think, you know, analysts, we're calculating, well, what does
that mean for inflation in twenty twenty five and twenty
twenty six, And I think what most people are coming
to realize maybe that is a lot of you know,
serious talk, but that you know, tariffs are not going
to be implemented, which is what's helping the ease or
the worry of inflationary risk, you know, expectations in the
(24:33):
next twelve months.
Speaker 1 (24:34):
Okay, well, we are coming up on a break, So
this is Andy Keel with the Home Solutions Show and
we'll be right back. Good morning, and welcome back to
the show. This is Andy Keel with the Home Solutions
Show on KNST and I'm joined again by Bob Zachmeyer
and Jerry Sunt. Before before the first break, we were
(24:56):
talking a little bit about the Tucson market statistics. Man,
I'd like to go back to that for a moment.
Few interesting things that I noticed in the data that
just came out for October. We talked a little bit
about how the sales by price range. Not a big
surprise that the hottest segment of the market was three
(25:17):
hundred to three nine ninety nine. We're also looking at
a few of the other things here. The month of
supply by price range for the zero to two hundred
thousand range four point twenty eight months of supply or
two hundred and seventy eight active listings. Now that section
(25:39):
of the of the range I tend to take with
a little bit of a grain of salt because that
also tends to be the fixer uppers that are thrown
into the mix.
Speaker 4 (25:48):
And also that the new MLS goes all the way
out past Saint David and past Benson and up to
Globe and you know, so it's a lot of very
rural properties that in the past had never been included
in that segment. I'm in Tucson proper. There's like seven
properties under two hundred thousand dollars for sale.
Speaker 1 (26:07):
Yeah, it's it's definitely slim pickens am. I believe manufactured
homes and mobile homes are in that mix too. Yep.
So then we get into the two hundred to two
ninety nine, we've got three point one seven months of
supply or six hundred and seventy two active listings, which
(26:28):
actually is the lowest segment of the market, so two
hundred to three hundred seems to be the as usual,
the hot spot. And again Bob kind of puts this
the real estate being in like a pyramid, where the
base of the pyramid would be the single family homes
that most people find desirable, and as you start getting
(26:49):
into the more rare things like commercial industrial and condos
and manufactured homes, it starts less demand for those things.
And this is the very very base of the pyramid.
The two hundred to three hundred thousand dollars houses in
Tucson are clearly in the most demand of any price
range out there. And then the three hundred to four
(27:11):
hundred thousand price range three point six six months of
supply or twelve hundred and sixty four active listings, and
the number of sales last month for that range is
three hundred and forty five as opposed to the so
about just some quick math, not quite twenty five percent
(27:32):
of those sold, and the two to three hundred range
two hundred and twelve, which is right around just under
a third of those sold, so clearly more demand in
that lower end of the range.
Speaker 4 (27:43):
Back to Jerry's point, though, Andy, I mean, this is
the time to be a buyer. They're you know, in
that range under three hundred thousand. There's six hundred and
seventy two homes available and only two hundred and twelve
sold last month. I mean, we haven't seen numbers like
that in a very very long time.
Speaker 1 (27:58):
Yeah, exactly. And for any one that's out there looking
for just a good starter home, that's certainly a good
range to be looking in. And then what I thought
was kind of curious too as we got into the
regions of Tucson and what happened. We still have the
(28:22):
Northwest is the largest number of sales, one hundred and
eighty sales, which is actually up nine point one percent.
The volume's up. But what I found is really interesting
here with the Northwest, the median sale price is four
hundred and forty thousand dollars, which is down thirty five
thousand dollars. Oh, and the price per square foot is
(28:46):
two hundred and sixty four, which is actually up a
little bit three bucks a square foot. Interesting little piece
of data there. And that's followed by Central being the
second largest number of sales for region, one hundred and
thirty two sales in Central, which is a little lower
volume down eight point three percent. Median sale price on
(29:11):
Central is three hundred and five one ninety five, which
is actually up fifteen thousand, one ninety five on the median,
And that's followed by the East with ninety eight sales
increase of sixteen point seven percent, and the median on
that the East Side homes is actually up two thousand
(29:33):
dollars or three hundred and twelve thousand is the median.
With an average price price per square foot, I'm sorry,
the median price per square foot is two hundred and
seven dollars a foot, which is actually down eight bucks
a foot.
Speaker 3 (29:47):
And Andy on the East signment, you know, you and
I went on.
Speaker 4 (29:49):
That appointment and basically the it's the first time I've
seen this in probably two years, is the average sale
price in that area was one one hundred and one
percent of the asking price. I hadn't seen anything over
one hundred percent in a long time. But that was
a very specific neighborhood like Harrison and Golf Links over
(30:11):
on the East Side, and in that area, it's very
very hot there. It's way more supply or way more
demand than there is supply.
Speaker 1 (30:19):
Yeah, that's certainly a great section of town, and that's
where we tend to find most of our properties that
we buy as east Side as well. And it's certainly
a hot segment of the market. And you can still
find some things out there that are affordable and can
cash flow if you really look closely, what other interesting
(30:39):
things are out here? In this data, single family residents
eight hundred and twenty nine sales actually down one point
nine percent overall median sale price three hundred and eighty thousand,
which is down five thousand dollars.
Speaker 4 (31:00):
Crisis fell five thousand. That just means that the medium
the less expensive homes.
Speaker 1 (31:04):
That is true. That is true. The statistics on the
sales by square footage I find rather interesting too. The
number one segment for houses by square footage is fifteen
hundred to nineteen ninety nine square feet that had three
(31:25):
hundred and thirty eight sales, followed one thousand to fourteen
ninety nine square feet two hundred and ninety six sales,
and then two thousand to twenty four ninety nine square
feet was one hundred and seventy one sales of that mix.
So again, if you're looking at what seems to be
in the most demand, fifteen hundred to two thousand square feet,
(31:49):
is is the hot spot? And then the.
Speaker 4 (31:53):
Number over Yeah five thousand. Only seven homes sold above
five thousand square feet.
Speaker 2 (31:58):
Yeah, that's a big house. It's a lot to maintain.
You know. It's funny, you know we look at October numbers.
You know, you're talking about basically contracts written in September,
which is when interest rates for lower. It'll be interesting
to watch, and I guess we say this every month,
but what next month will bring? Like? What will November
(32:21):
sales look like? Because as you know, interest rates rose
in October and into in early November. You wonder if
that November numbers are going to be lower, and seasonally
they are every year lower than so it'll be interesting.
Is there a pending sales number that shows up on
(32:43):
that report?
Speaker 1 (32:45):
Yeah, as a matter of fact, there is. So the
pendings for October, and I have the data that goes
back to twenty twenty one. I actually found this rather interesting.
The pendings in October was one thousand and fifty five. Okay,
in twenty twenty three it was one thousand and forty eight,
So we actually have more pendings this year than last
(33:07):
twenty twenty two it was one thousand and fifty seven.
So the last three years it's been incredibly consistent.
Speaker 2 (33:13):
That is consistent, isn't it.
Speaker 1 (33:15):
Yeah, until we go back to twenty twenty one, where
it was about fifty percent higher fifteen hundred and seventy
six pendings in October of twenty one, but twenty two,
twenty three, twenty four incredibly consistent. Then actually, if you're
looking at the new listing count find this kind of interesting.
Goes back to the same point. Now really is a
(33:36):
good time to buy new listings In October eighteen hundred
and forty four came on the market, as opposed to
twenty twenty three where we had only sixteen sixteen. Twenty
twenty two was fifteen fifty eight, and then we had
a lot of new listings. In October of twenty one,
twenty one, one hundred and fourteen came on the market,
(34:00):
and what you go to the other side of the
equation and see what's sold in the same timeframe. The
number of sales in October twenty twenty four is one
thoy fifteen, which is down a little bit from twenty
three one thousand and sixty eight twenty twenty two, one thousand,
(34:20):
and sixty two and October of twenty twenty one we
had fifteen hundred and ten sales. So what we were
seeing in October of twenty one, we had a lot
more listings come on, but virtually all of them were selling.
If you're looking at this year, a lot of them
are coming on and not nearly as many are selling.
(34:43):
So again that leads us to give us some buyer
opportunities and there's a little bit more to choose from.
Speaker 2 (34:53):
Yep. Again great news to a buyer's ears.
Speaker 4 (34:58):
So the thing that's going to drive the prices is supply.
When there's more supply, there's less demand. The best properties
are going to continue to sell immediately.
Speaker 3 (35:06):
The ones that.
Speaker 4 (35:07):
Aren't as popular are going to stay on the market longer.
They're going to have price reductions, and that's going to
drive neighborhood values lower. But still the nicest houses in
the neighborhood are going to fly off the shelf because
of a lack of supply. And still, even though it's
higher than it was, we're still a very very low
supply of homes. But you know, Jerry and I have
(35:28):
been talking for two years now about affordability, and you know,
if you figure the average home in Tucson or the
median is over four hundred thousand dollars the average. And
you know, if you figure a seven percent loan, the
payment on that, if you borrow four hundred thousand at
seven percent, it's like.
Speaker 3 (35:50):
Twenty six hundred and sixty one dollars.
Speaker 4 (35:52):
So even if rates came down to six even, it
would drop by two hundred and sixty three bucks.
Speaker 3 (35:58):
It's twenty three ninety eight.
Speaker 4 (36:00):
And even if ver eats went all the way down
to five, it's still twenty one hundred and forty seven dollars.
So if you are an investor, you definitely want to
stay in the lower end of the market where affordability
exists higher priced homes. As we illustrated only seven houses
with five thousand square feet or more sold last month
(36:20):
out of one thousand and eighteen or one thousand and
fifty five that actually are under contract to be sold
next month.
Speaker 1 (36:29):
Exactly. And with that we are coming up on a
break again. This is Andy Keel with the Home Solutions
Show on KNST. Good morning, and welcome back to the show.
This is Andy Keel with the Win three team powered
(36:49):
by Epic Realty and I'm joined once again by Bob
Zachmeyer and Jerry Sunt and I have a couple of
articles that came out this week that they thought were timely,
and one of them that I was looking at is
one that is titled rapidly rising rents squeeze millions in
(37:09):
the middle class. Rent costs have longwagight on lower income households.
Now it's coming for the middle class. Nearly four and
ten middle class renter households are burdened by cost. An
NBC News analyst found that's up almost twenty percent since
twenty nineteen. Well, the already high shareff cost burdened low
(37:31):
income households rose just two percent. A cost burdened household
is defined as one paying thirty percent or more of
pre tax income on rent and housing costs. I'll pause
there for a second because I'm thinking back just to
the what we would refer to as the front end
(37:52):
ratio on a loan, and like Jerry to talk about
that for a moment, And yeah, I.
Speaker 2 (37:58):
Mean, historically it's supposed to twenty nine for housing, that
or shelter expense will be twenty nine percent of the dollar,
and so that number is still you know, obviously thirty
percent and above is above average. But you know, there's
some segments of the marketplace in the US high cost
of living areas where people spend almost fifty percent of
(38:21):
every dollar on housing. Northern California is a great, great
example of this. So it's I think part of this
is really about what people's comfort level is as far
as what they want to spend their money, right. I mean,
there's an analytical side where a dollar can only be
chopped up so many ways. But if people have the
(38:44):
confidence and realize that they're buying a house, and they
may be you know, putting more of their dollar into
housing and that they will not be able to spend
that money on travel or other goods. But when they
realize that, hey, this is investing for your future, I mean,
we have to go back to the fundamentals of why
(39:04):
we own real estate. It is the number one building
block for building wealth in America. There's just there's no
athens or but stock markets number two. So you have
to buy a house at some point if you really
want to get ahead and look at retirement. You know,
it's just so then it goes back to, Okay, how
(39:27):
much are you comfortable or willing to spend out of
your monthly budget towards alse.
Speaker 1 (39:34):
Yeah, exactly. So another article that came out is September
home sales. So we're just talking about October with Tucson
and now we're talking about nationwide. But September home sales
dropped to lowest level since twenty ten. Yeah, sales have
previously owned homes fell one percent in September compared with August,
to a seasonally adjusted annualized rate of three point eight
(39:57):
four million units, the slowest pace ins October twenty ten.
According to the National Association of Realtors, sales were three
point five percent lower than its September of twenty twenty three.
Sales fell in three out of four US regions, with
just West regioncying a gain. This count is based on
closings representing contracts signed likely in July and August. Mortgage
(40:21):
rates started July near seven percent on the thirty year
fixed rate, then fell slowly through August to just below
six point five. Rates are now more than a full
percentage point lower than they were a year ago. Well,
that's a little.
Speaker 2 (40:33):
Bit that stated me.
Speaker 1 (40:37):
Even though this article came out this week, they're talking
about some day to data, aren't they But home sales
have been essentially stuck at around four million unit pace
for the past twelve months, but factors usually associated with
higher home sales are developing. Chief economists for the National
Association of Realtors said, inventory ahead.
Speaker 2 (41:00):
Go ahead, please don't continue. Andy.
Speaker 1 (41:02):
Inventory rows one point five percent month to month to
one point three nine million homes for sale at the
end of September. That represents a four point three month
supply at the current sales pace. Inventory was twenty three
percent higher from September of twenty twenty three, and I
always look at this month's supply, I see four point three.
(41:26):
We talked recently about certain segments of the market here
in Tucson. We're heading towards a five month supply, and
historically I always think five to six months of supply
is about a neutral market. And we start getting over six,
it starts getting into more of a heavy buyer's market,
meaning the buyers have plenty to choose from and usually
(41:46):
have a bit of an advantage. So I still feel
like we're heading towards a neutral market.
Speaker 2 (41:53):
Yeah, there have been many studies with respect to when
will you know more inventory be coming on the market.
And when will buyers who who are or owners they
should say they have they're a three percent mortgage, When
are they willing to get rid of that mortgage and
you know, and trade up to a different house and
(42:14):
get rid of that rate. You know, a lot of
people love the interest rate they have, but they don't
love the house that they're in, but they're frozen to
go buy a because they don't want to get rid
of that their their three percent interest rate, or b
they can't afford a more expensive payment. So there's two things.
But the magic number is five and a half percent
(42:35):
on a thirty year fix. When rates get down to
five and a half is when they and there's been
many studies on this that that people will be willing
to give up their lower interest rates and sell that
house use their equity to go buy a new house.
So I really think twenty twenty five is going to
going to have a big surge in the move up
market simply because if rates get down to that level,
(42:58):
and they are expected to by mid twenty twenty five,
we're going to see a big surgeon in in you know,
in resales.
Speaker 1 (43:08):
Yeah, we certainly hope.
Speaker 4 (43:10):
Yeah, Actually you know, most people with the low interest
rates they have are and especially now they've had it
three or four years, they're gaining equity on their loan
faster than they've ever gotten it before. And you know,
that's something that I think is giving them the equity
to move forward. Even though rates are higher, the amount
they need to borrow won't be any different because the
(43:31):
value of the house they have is still increasing because
of a low supply and a high demand.
Speaker 1 (43:38):
There's one other section of this article that I found interesting.
The median price of an existing home sold in September
was four hundred and four thousand, five hundred, and we
just talked about that in the previous segment for two sons,
So we're still below the national median in twoson at
this point by roughly for so I still think this
(44:01):
is a great market to be looking in hundred and
then there's another one here, how hard is it to
buy a home right now? NBC News home Buyer Index
measures the market. Just a couple quick points that I
wanted to make. They put out this home Buyer Index,
(44:25):
which is a number on a scale between zero and
one hundred representing the difficulty potential buyer faces and trying
to buy a home. The higher the index value, the
higher the difficulty. And they had this this lovely map
up of the United States and you could kind of
just hover over which which county and what the pricing is.
So I won't go into too much detail on this,
(44:46):
but I was really fascinated by one one piece of
data in this article before I mentioned that Pima County
came in at sixty five point nine percent, and again
the HUT, the higher the number, the higher the difficulty
as opposed to Maricopa County, which is Phoenix, was actually
(45:07):
lower sixty point nine percent or nine percent. Sorry, that's
just a number one to one hundred number. But part
of this was fascinating to me because prices are soaring
in Cocanino County, Arizona, making it one of the twenty
five most difficult counties to buy a home in. As
of May five years ago, it was ranked three hundred,
(45:31):
but the sales price has increased eighty one percent, nearly
twice the national figure.
Speaker 3 (45:37):
Wow.
Speaker 1 (45:39):
I was pretty blown away by that. And that's basically
the flag Staff and Sedona market. If I'm not mistaken, Yeah.
Speaker 4 (45:48):
Flag Staff is landlocked. I mean, there's National fourth on
all sides. And I have a friend that's a builder
up there, and he's pretty much decided in the next
year or two he's going to have to hang up being.
Speaker 3 (45:57):
A builder because there's nothing left the build on.
Speaker 1 (46:00):
Well, that would certainly explain why the prices are jumping
so much if they're running out of land to build
and the only thing left is what's already existing, which
tends to push the prices higher.
Speaker 4 (46:10):
And you know, a normal residential lot, they're actually they're
actually putting a driveway down the middle and building four houses,
one in each corner of that lot.
Speaker 2 (46:19):
Wow are they are they like, you know, like seven
hundred square foot homes?
Speaker 4 (46:25):
They Oh, no, they're bigger. They're bigger houses. I mean,
they're they're reducing the setbacks there. I mean, because there's
a housing shortage in flag Staff, so they're really promoting
anything they can get. And and I was just up
there last month they are actually two months ago in September,
and went out to eat with them and they're like, yeah,
we're gonna be out of business. So, I mean, he's
(46:46):
bought a restaurant and he's got some other businesses started
because his building business is going to be done. There's
nothing left to build on.
Speaker 3 (46:55):
Wow, and and and.
Speaker 4 (46:58):
The weather is so beautiful and flag Staff their snow
there now, but in the in the summertime, what a
difference to just leave here and in a few hours
be in this nice cool pine trees all over the place.
Speaker 3 (47:09):
That's awesome.
Speaker 2 (47:11):
Yeah, we're sure.
Speaker 1 (47:12):
We have a couple of friends that have cabins up
up north in that general range between Flagstaff and like
Sholo and some of the areas up there. And what
I've always been blown away with, specifically the Sholo areas,
is going up there and just having a wonderful you know,
(47:33):
high seventies degree temperatures in the summertime, but sitting outside
and not having any mosquitoes. That always just I thought
was was wonderful. And I'm not used to that in
too many areas of the country as to be able
to sit outside and not have the bugs bug you.
Speaker 2 (47:49):
Right.
Speaker 1 (47:52):
So anyway, we are coming up to the end of
the show again. My name is Andy Keel with Epic
Real the Win three team, and my number is five
two zero five three nine nine five nine one. And
Jerriett once again, if you would share your phone number.
Speaker 2 (48:11):
Yeah five two zero three seven zero nine five seven
six and Bob.
Speaker 3 (48:18):
Sure five two zero three one four sold and have
a great Sunday, all right.
Speaker 1 (48:23):
And that takes us to the end of the show.
Thanks for listening and have a great Sunday everyone,
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