Real Estate Show July Lender Update

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Real_Estate_Show_Lender_Update_July2023

Alice Lema: [00:00:00] Well, hey there Southern Oregon. Welcome back to the real estate show. So glad you could join us today. I'm Alice Lema. I'm a broker here with John L. Scott real estate in beautiful Southern Oregon. And today we're going to be talking to Guy Giles from Mutual Mortgage, and we're going to go a little deeper into the economy. Talk about the latest additional interest rate increase from the Federal Reserve Bank. Yes, folks, we have another one coming and how that all affects our local Southern Oregon housing market. So, stay tuned for Guy Giles from Mutual Mortgage he'll be on shortly. In the meantime, let's take a quick peek at our local statistics this week.

These are for all three counties, and they are single family residential only. Let's start with Josephine County. Josephine County prices year over year are down 18% for an average single family residential home costing [00:01:00] $422, 520. The number of solds year over year in Josephine County are down 25%. The number of listings year over year in Josephine County are down 15%.

Let's look at Jackson County prices year over year. This week in Jackson County are down 8% with an average price of $454, 772. The number of sold year over year this week in Jackson County are down 48% and the number of listings year over year in Jackson County this week are down 21%.

Let's look at Klamath Falls. The prices in Klamath County are down 7% year over year this week to an average $367, 345. And again, that's single family residential only. Klamath County number of sold year over year this week are down [00:02:00] 35%. But we have a little bit of good news. The number of listings in Klamath County year over year this week are up 11%. So yay for Klamath County.

Now Jackson County and Josephine County, anybody who's thinking about selling their house next year, you might want to put it on the market now. We still have a shortage. It's still a little bit of a seller's market, and we still have plenty of buyers out there that want to write contracts. So give it some thought.

In the meantime, let's bring on Guy Giles of Mutual Mortgage to talk about what's going on in the economy and our local housing market, how the interest rate increase, yet another one, is going to affect things here in Southern Oregon. So stay tuned for our interview with Guy Giles. We'll be Back after a quick word from our sponsors, we're gratefully brought to you by John L. Scott, Ashlyn Medford, Guy Giles Mutual Mortgage, and our local Rogue Valley Association of Realtors. Thank you much, folks. Stay tuned for Guy [00:03:00] Giles.

Well, welcome back to the Real Estate Show, folks. I'm Alice Lema, I'm a broker in John L. Scott here in beautiful Southern Oregon. And we get to talk to Guy Giles of Mutual Mortgage again today. Thanks for being back on the show, Guy.

Guy Giles: Hey, I'm glad to be back. I'm actually just glad to be indoors right now.

Alice Lema: Right? Right. Our, our typical Southern Oregon summer weather. Thank goodness for the lakes.

Guy Giles: That's true. And they got more water in them than they have the last few years. So we can't really complain about that either.

Alice Lema: Yep. Yep. It's why we love living here. Before we just went on the air, you were mentioning something about the health and status of some of the banking institutions nationally. Do you mind touching on that? I think it'd be interesting for the The folks listening to hear about.

Guy Giles: Yeah, I think just everybody's just, you know, really struggling with, you know, the, the rates and, and just, you know, [00:04:00] keeping, keeping business coming in the door. You know, they, they had to keep their liquidity up, you know, they're just, there are certain things that banks have to have in place in order to lend and, and they're, some of them are struggling right now.

I think us bank just laid off 300. 50 people this week and about 50 well, loan originators and 50 managers, which I don't even, that's the numbers that we got in. I don't know how in the heck you have 50 managers with 350 loan officers, but maybe they were kind of heavy in management and just needed to readjust some things also.

But, you know, Wells Fargo had some pretty big layoffs. There's been, you know, it hasn't been as crazy as 08 or anything, but there's definitely some pullbacks as far as that goes. And, you know, I. I can't say I worry for these companies because obviously they're my competition, but I do worry about the regional small banks getting shut down because, you know, I mean, this consolidation of everything into the big Googles of the world and the [00:05:00] big, you know, just all the, all the big companies, all, you know, the small businesses are what makes this country great.

Obviously, I work for a very, very large company that's been around for a long time. So, I mean, there's a place for everybody, but you know, I'm really hoping that the Fed and the policies don't squeeze out a lot of these regional banks that have traditionally done a lot of good lending in town, even though they're my competition. You know, these are, these are a valuable piece of, of our economy.

Alice Lema: And don't they really support the small business enterprise? Entrepreneur kind of person more so than the big banks.

Guy Giles: Oh, 100%. And you can definitely have your, your, you know, and I don't, I don't live in that world, but you can definitely feel that, you know, I want the girl, you know, in a, in a tower at Chase Manhattan, you know, her to do my investments because that's what she lives and breathes and everything that she does. But at the same time, I want the guy down here that's on the ground, [00:06:00] you know, making small business loans to people to understand, you know, what's going on in, you know, just our environment.

So I think it's it's really important to have a good mix and everybody and competition is good. And you're, you're right, these are the people that in the smaller banks that are, that are loaning to the companies. And, and I'm, I'm hoping enough of that survives. I just, it's just a little bit of a weird time, you know.

Alice Lema: That's an understatement.

Guy Giles: Yeah. So, you know, yeah, we were, we're hearing these headlines and we were seeing this stuff happen and, and it'll correct itself. I. I also worry about the ones that are going to, you know, going to be around because rates will drop. We will have our recession and. You know, and and hopefully they can right size soon enough to where they can at least get some people back in the, you know, into underwriting into doing all the things that they're going to need to do to close loans. Once things turn [00:07:00] around a little bit. And it will turn around.

Alice Lema: If there's if there's layoffs in the mortgage industry, then that affects the speed

Guy Giles: Generally what people do. I mean, and I've been through a few cycles like this now and, and that was that was the shame working for a really big bank at that time, because they're always trying to be right sized as far as, you know, they'll start laying off underwriters.

They'll start laying off, you know, long before they, they lay off their salespeople. They'll, they'll, they'll have to just, you know, not have a whole bunch of people getting paid high salaries to do nothing. So you'll, you'll see people fall out of there and then rates drop a little bit. And now you don't have the back office support or the capacity to be able to close, close the loans that you need to close. So that's the weird, vicious cycle. And then everybody gets on a hiring you know, just on a hiring binge.

They try to hire enough people to be able to close the loans [00:08:00] that are coming in and they're green, don't know the systems yet. And then by the time they get up and the machines working really, really well, it's time for them to start laying people off again. So it's kind of a, a bad cycle. And that's actually one thing that was not supposed to be a plug for my company, but, but we've really tried to keep everything ready to go this whole time. And we just, we feel really, really prepared, but I've lived through it working for a bank when, when these things kind of happen. And, and it's not a fun place trying to, trying to get a loan closed when half of your underwriters are laid off.

Alice Lema: Well, we haven't seen a big shift. Correct me if I'm wrong since the housing crash 09 or 07, depending on where you were. So,

Guy Giles: oh, I was going to say no, but but we have been seeing for the last months that that [00:09:00] people are laying people off. So I, I assume that that that's going to kind of come back around again, where, you know, rates will drop. Like I said, we're, we're right now we're 15 months into an economic decline as far as the leading indicators go.

Alice Lema: I'm glad you brought that up because. Yeah, I think we are too.

The last time that happened. Yes. The last time that it was a crash 2007, 2007.

Guy Giles: Do we expect, you know, catastrophic anything like that? I know. No, I don't think so. But, but I do definitely everybody's calling for, you know, a recession. It's funny because everybody is calling for low rates around the middle of this year too. And even though they've, they have come down some, that hasn't really happened yet, but the recession really should be here. I mean, consensus is that it will be by the end of this year. That's actually going to help our [00:10:00] industry in this valley and recessions are no fun, but at the same time we need some relief on some rates. And, you know, then maybe open up some inventory because that's our biggest issue right now as far as a little higher rates in an inflationary environment because they're making, they're making a little bit more money than they were before.

Alice Lema: So are you seeing people's wages go up? Because as a lender, you're, you're on the front line seeing people's applications, what's going on with wages?

Guy Giles: Well, that's actually funny that you kind of mentioned that, I've I heard some numbers and, and I don't think it's, it's national averages. It's not necessarily right around here. And I don't think I went over this at all on the, on the last program, but it's been some some math, because that's kind of kind of where my heart is. Everybody's wages just as as a whole, believe it or not, we're up 1200 dollars monthly since pre COVID. I [00:11:00] know it, it's, it's national averages though. It's not necessarily right around here.

Alice Lema: Well, but even nationally, that's a big number, 1200 a month.

Guy Giles: Well, and then, and people were able to go find a new job. People weren't willing to work, you know, so if you, if you just look at the actual people that are not working two, two part-time jobs, but, but the real ones where people had enough leverage to go out and either ask for a little bit more or. Or change jobs, you know, because they wanted to work at home or different things. That was the national average was 1200 bucks. So you figure if rates go up 1 percentage point, which actually, you know, had gone up a little bit more than that. But 1 percentage point on the average house. would mean about 300, 350 in in, in a higher payment.

So if you have, if you're making 1, 200 more, take out maybe 30, 30% for taxes, you're still over [00:12:00] 300 ahead of where you were before the rates went up. Meaning, you know, your, your income's up after, you know, just apples to apples. By the time you're all said and done, you're still making more than you're losing in that higher rate. So it's still.

Alice Lema: Oh, that's interesting. It really is all about the monthly.

Guy Giles: I apologize. My phone rang right in the middle of that and articulate that absolutely correctly, but. You know, obviously when I say apples to apples, apples, the price of them are up a little bit. So inflation, you know, eats into that whole 1200 that you're making.

But if you're just looking at it as buying a house, you're, you're still ahead because you're making more money than you were pre covid. Even though rates are up, there's still a buffer in there where you're, you know, technically a little bit ahead of the game. So, Anyway, no more phone calls.

Alice Lema: Well, and you know what else I think people forget [00:13:00] is that you have a place to live. And nationally, I don't know what it's like to be a tenant in some of the other parts of the country, but here in Southern Oregon, our tenants are really, really struggling with inventory. I mean, yes, we have a shortage of houses to sell, but wait till you try to go out and rent something. And we don't have a lot of new landlords jumping into the business.

So that idea of having your own place to live, so you're not vulnerable to a landlord deciding to sell or something. I think that that just needs to be given more weight, but it's not a financial thing. It's more of a life security thing.

Guy Giles: I, it's been a long time since I've been in that in that position, but I can absolutely attest to the fact that I do have people come in and all the time. Hey, they're selling my house. Hey, my rate, my rent raised a, you know, my, my house, they're not taking care of it. And which I don't hear that [00:14:00] a lot, but I have, I have had people that are just, you know, really needing to be done with with renting. And not having a place to go is it's got to be a scary thing for a family, you know, with, you know, school getting ready to start back up.

Just just whatever. You know, I, I, I hope at some point we can figure out how to get some affordable housing for people with, you know, the just working working people. That you don't have to be somebody that's retired out of California to be able to afford a house here. And we all have kids in this valley. And it's just it's just a shame where where a lot of this is gone, but I don't I don't have an answer for that, you know, to be perfectly honest with you.

Alice Lema: Yeah, well, and it's like Brad Bennington from the builders organization talks about there's a lot of other obstacles to creating more housing in Oregon.

Guy Giles: So you're at [00:15:00] 90, 000 into just the permitting process and and and then you look at how much some of the, some of the legislation has come down, cost more just for the average appliance to go into the house. Yeah, it's, it kind of goes against everything that's being said out loud. It's like behind the scenes, everything is just completely opposite of, of what they profess to be doing for people.

Alice Lema: Yeah, yeah, there is a housing shortage, both for purchase and for tenants and then Oregon has a unique set of laws that kind of make it hard to overcome all that. We're talking to Guy Giles of Mutual Mortgage. We're going to have to take a quick break here. We're thankfully brought to you by Guy Giles of Mutual Mortgage. Thank you for that helping us bring the show every week. We're also brought to you by John L. Scott, Ashland and [00:16:00] Medford and our local Rogue Valley Association of Realtors, also known as Arvar. We appreciate your generosity every single week. Just a reminder, this broadcast will be repeated tomorrow on Sunday at 6 p. m. on KCMX. FM 99. 5. We'll be right back with Guy Giles, more interesting conversation about economy and the mortgage industry.

Well, Hey, Southern Oregon. Welcome back to the real estate show. We're talking to Guy Giles today of Mutual Mortgage, and we're talking about recession. A lot of people are not convinced we're in one. You and I share that opinion that we have been for a while.

Guy Giles: Only because, only because we, you know, historically know how to look, what defines one, but you know, feds will catch up one of these days.

Alice Lema: Yeah. And, and a lot of people, including yourself have mentioned that you think the rates are going to go down. [00:17:00] So I know, I know we're not Nostradamus, but let's talk about when that might happen and by how much.

Guy Giles: Well, let me, I, I love it when I'm right. It'll be a super nice feeling one of these days when that happens, because I honestly thought it would be by now. I was thinking, I was thinking mid year. You know, we'd be down, you know, at least into the fives. You know, where I'm, I've been locking some people in, you know, and at the low sixes lately.

So, I mean, it's just, just depending on the circumstances, you know, so as far as what you're going to get. But I, I really do think still before the end of the year, we, we should be down another, you know, maybe half a percent. We're not, we're not at the height that we were at before. But the economy is definitely slowing down.

I mean, the indicators we had some jobless claims come in a little bit less today. Then then they were, so [00:18:00] there are, I'm sorry, last Thursday. So there were a little bit of a little bit of a hiccup as far as the rates go. But I think just just under the surface under the headlines, there's a lot going on that that reporters, frankly, are too lazy to look at.

They just get they just get fed something and they just regurgitated all over the country and everybody everybody just buys into it. One of the things is the median house price, you know supposedly that went down and technically the median house price did go down, but if you, if you have, you know, not as many houses selling in a higher area, that doesn't mean that the middle ones are selling for less, is all it meant was some people are not buying higher end houses in that particular month.

So it, the middle or median price did go down just because it, it did, but it's not, you didn't have a [00:19:00] price reduction in those markets necessarily. You just had, you just had one extreme side, just kind of fall off for that month. So, meaning instead of having maybe 1, 2, 3, 4, 5, those 5 buckets, number 5 bucket is gone.

So it's obviously going to shift the median down a little bit. But if you look just, I mean, as far as the National Association of realtors, 1 in 3 houses sold for more than the listing prices, Redfin is saying as much as 50% of the houses are selling for more. So really what we have is we have people not buying the really high-end stuff right at the moment, which doesn't mean next month that couldn't change, but, but that really didn't, didn't mean that the other people are dropping their, their prices.

I mean, it's the, it's, still strong as far as the houses that, that, that are going out. I mean, they're, they're still selling in 30 days if you have a decent [00:20:00] house. That, you know, and everybody kind of waiting around for this big correction for housing prices to tumble. I don't see that happening.

We've been doing good loans for over 10 years now. And people that are in their houses have have qualified for those loans. This isn't something that that I'm afraid it's going to happen at all. But I do think that we just need to get some more houses, which I know I'm preaching to the choir with a real estate agent here. Buyers, we just don't have as many houses out there as we really need.

Alice Lema: Well, and this week in the three counties listing year over year are down in Jackson County and Josephine County, but they're up in Klamath County. And I find that interesting because Klamath County has a completely different economic situation up there.

And they're starting to see that they're listing inventory is up over 10%. But that's year over year for the week we're tracking, like the [00:21:00] micro, the micro movements waiting to see, are we bottoming out, what are the trends, is this going to get some legs and turn into. A macro movement, right? Cause they all start small, but it all has to do with the inventory. And if we can get more inventory, our sales would go up. That's the sales are all down the number of sales, but it has to do choices are just not enough on the market.

Guy Giles: No, there's, there's, there's not. I'm just kind of looking at some numbers that I kind of put together before, you know, the inventory, it looks like it remained the same, you know, at about a million units. It's down year over year though, 13. Like 13. 6%. It's funny. You said that I happen to have this piece of paper here because I never know.

Alice Lema: But are those national numbers?

Guy Giles: Yes.

Alice Lema: Okay. But see, that's very interesting because 13% nationally, I think that's kind of a big deal. Don't you?

Guy Giles: I do too. [00:22:00] I you know, we, we have like 3.1 month supply right now, in a normal market is like 4. 6. Days on their market remained 18 down from 22 in April. I'm just kind of reading that one.

Alice Lema: But see, that's still technically a seller's market.

Guy Giles: Yeah, absolutely. I mean, 76 sold in less than 76% sold in less than 30 days.

Alice Lema: So, well, what does that tell you? If you price it right, it's clean moving ready. Look at that 76% in 30 days. Wow.

And then the funniest part is still our strong, strongest thing. And I can kind of personally attest to this because I have four or five right now that are in contract that are first time home buyers. You know, people are, people are getting into houses and I mean, it looks like nationally 27% of the, of the buyers right now, both from last [00:23:00] month were first time home buyers.

That's awesome.

Guy Giles: Cash buyers like 26% and investors, 18%. So we don't want to overlook the, you know, we talked about landlords and different things. We definitely don't want to overlook the investors as far as that goes.

Alice Lema: Yeah. It's just in Oregon. We're not the it girl for investors, unless you're selling. It seems like a lot of people are selling and taking their investments other places, but it's good to know that those national numbers.

Guy Giles: Honestly I'm I'm looking in Idaho right now for my next 2 investment properties.

Alice Lema: Really? And how did you pick Idaho? Just out of curiosity.

Guy Giles: Well, they're not on crack. The simple answer that will get edited.

Alice Lema: But I know we don't really edit things.

Guy Giles: Yeah. So anyway, that's, that's, that's how it feels. I mean, you, you talk about if you want your investment to be you know, semi safe, you [00:24:00] might as well invest in something you believe in. And I believe in this place for a place to live, or I wouldn't live here.

I think it's still a great place to come. Great place to be. Thankfully, we're a little bit buff buffered down here and people are, I don't know. It feels like everybody gets along down here a lot better than a lot of other parts of the country. I do something to be said.

Alice Lema: Yeah, I think there's less strife. Yeah, for sure.

Guy Giles: I don't want everybody to agree with me on everything, but I want to be able to at least, you know, get along and I do feel like that in this valley, which is kind of the unique thing. It's easy to get polarized with the politics and everything going on around the world and saying, let's move to a more liberal place.

Let's move to a more conservative place. Why don't we just get along right here? Yeah. It doesn't mean that I may not move an investment someplace else because you're right. It's not as attractive right now.

Alice Lema: Well, and it has to, it has to pencil. So I'm just curious, like don't want to pry. You don't have to be too open with your personal life. But are we talking about a multifamily, single [00:25:00] family? What are the rents like?

Guy Giles: Well, I mean, I still feel like I can get I can get kind of whatever rent I want. It's just at the end of the day, this just happened to be a particular property that I have too much, you know, it's been depreciated out. So, you know, that ship kind of sailed. I have a lot of money into it. So I think I'd rather just sell it and buy 2 or 3 places in Idaho. Not that Idaho is that cheap or something. It's just this is a more expensive property on the river. And if I can buy 2 or 3 places in Idaho with that money, then I think just long term, not having something in the big fire danger also, because there's a lot of big timber on this on this property. And, you know, I don't want to get hit with 7000 dollars a month for fire insurance either.

Alice Lema: So, yeah, the jury is still out on how that's going to all go down. Well, and you know, some of the nicer properties don't always make the best rentals. I think you worry more [00:26:00] about them. They're more expensive to maintain unless you're doing the short term rental model. I, I don't know that Riverfront would make a great rental.

Guy Giles: So you can't see this on the radio, but if you look, there's a steel chainsaw on my desk with some malls because I was out at that house chopping down trees literally yesterday. Just, yeah. I mean, you just, you're doing your defense space. Into properties like that and that's the other thing I'm looking to buy a couple of houses right in town, maybe Post Falls or something where they're newer that I don't have to do a whole lot of maintenance on.

So, I mean, there's a lot that goes into it. And if you're thinking about buying investments, I have some really good investment calculators and things that I can send off that that you can look and see how the thing pencils out.

Alice Lema: So that's great. That helps people decide on the, the rent to purchase ratio and all that.

Guy Giles: Just kind of your return and, and, and anyway, does it make sense?

Alice Lema: So this is very interesting [00:27:00] because it, it seems that it's common, at least in the last few years for professional investors to divest in Oregon, not just Southern Oregon, but just kind of in Oregon in general, and they're, you know, moving their portfolio other places.

And that's just how economies work if, if you have a, an environment that's not helping your business grow, you know, landlords or business people, then those business people make adjustments and sometimes that means they take the, take the properties to other states.

And and if some, you know, I mean, I'm obviously a business guy, but if if it worked out to where there weren't any rentals here and everybody that grew up here could have their own house, you know, that'd be an all right shift for me to, to have my investments in Idaho as far as that goes. So who knows?

Well, I just wanted you to hear that at least in my [00:28:00] world, it's super common. But yeah, and we sure do need more landlords especially in Southern Oregon. It's a great business, but you just have to, you know, you just have to know the rules. And abide by them. And there's a lot of them.

Guy Giles: And, and with inflation where it is right now, I think you can still raise your raise, raise your rents up to where, you know, I mean, as much as you need to, as far as that goes. I think a lot of it just kind of speaks to getting, getting somebody out if you ever needed to do that. But we can, we can go into a whole investment day, you know, some other time.

Alice Lema: Well, but we have a few minutes left and I, I'm curious do you want to talk about your investor program? I mean, it's 20% down for non owner occupied.

Guy Giles: Your, well, well, yeah, you can do that all day long. But if you can somehow scrape together 25% down, the pricing is night and day.

Alice Lema: Really?

Guy Giles: Yes. Yeah, it's it really is. Another thing that's [00:29:00] really, really changed in the last year, year and a half is if you buy a 2nd home, it is exactly like, exactly the same pricing as an investment property at this point. So there's no advantage at all to buying a 2nd home. You know, it used to be that you could have 1 and yeah, exact same pricing as a primary residence, but that's that is completely, completely gone at this point.

And I don't know if that if that ever comes back or not. But you know, I honestly thought about buying a second home and, and vacation rentaling it a little bit because they allowed for that and, and now anyway, that's changed a little bit.

Alice Lema: So, yeah, hold that thought. We got to take a quick break. We're talking to Guy Giles of Mutual Mortgage. Do not touch that dial. We'll be right back after this quick word.

Welcome back to the real estate show folks. We're talking to Guy Giles today, Mutual Mortgage, and a boy, [00:30:00] what an interesting conversation right before the break, we were just finishing up some investment thoughts that you had about your own portfolio, but let's also talk about what it's like to try to make a purchase with the 25% down instead of the 20% down. That sounded very interesting.

Guy Giles: Well, it's just, it's, it's about risk, you know, kind of the same thing. Actually primary residences tend to go the other direction, believe it or not. I know this sounds really strange, but Dave Ramsey even got it wrong the other day on a program that I was listening to.

If you have 20% down you know, and I'm probably going a little remedial for most people on the radio here, but that's that's always been the mark as far as do you have to have mortgage insurance or do you not have to have? And believe it or not, a lot of times the rates are a little bit lower if you come in with less than 20% down.

And the reason is, and I'm talking on a primary residence, not on an investment property. [00:31:00] Okay. Primary residents, we have that extra set of, you know, that that extra assurance from the mortgage insurance company. A, they've underwritten it also. Just like we have so we have a 2nd set of eyes on that piece of it.

Plus, if somebody defaults, then that that piece of it's covered for us. So I've actually seen rates a little bit lower with a little bit of mortgage insurance. And if you don't have to have it, I mean, it's like, don't don't go have mortgage insurance just because you know, you're going to get a little bit of a lower rate on your house.

I don't know that that necessarily pencils out, but if you really look at it, what I've been running into lately is people are just kind of like, hey, I I've been in my house for six or seven years. I've got a ton of equity in my house. I'm going to sell it and buy something else. And then they look and they just freak out because rates are a little bit higher.

But one thing that, that I've been kind of working with people to look at is [00:32:00] if A truck payment, some credit cards, some different things. Maybe you pay that stuff off instead of coming in with the full 20% or instead of coming in with 25 or 30% on a primary residence. And now you just lost 7800 dollars in other debts.

So your payment on your house going up a little bit is not the end of the world. A lot of times you're 100 head from where you are sitting right now. And the only thing you're focused on is I've got a 3. 4% rate and I'm never ever going to want to get out of that thing. But if you have 3, 000 going out in your overall bills, that's another calculator that, that I kind of have that we can send out to people just, you know, on a case by case basis where it tells you exactly what you're going to what you're going to save.

So maybe take some of that equity that you have, you know, it was a good investment buying a house. You have 150, 000 equity in the [00:33:00] thing. Now, instead of putting that all towards your next house, take 25, 30, pay off all of your other stuff. And then a, you're not freaking out every time the fed raises rates and be, you know, a lot of the time, especially just because of this unique market, you know, people can look at it like it's a negative thing because rates are up. But. With housing going up like it was with everything like it was, there's probably a rare opportunity to be able to to just realize some of that equity that that you have, take it pay off some debt, have a lower payment than you started with. And you're in the house that you want to be in.

So, there's just a lot of different talks. I mean, I had a guy on a refinance. He's been, he did his loan with me. He was from Klamath Falls and he was 1 of the things he was going to do was cash flow remodeling his house. So, he just called me last week. Like a long time after he did that, he said, I never got around to that. I couldn't afford it. I really want to refinance [00:34:00] and pull some cash out, but I don't want my payment to be any more than it was.

And I said, well, if that is truly the most important thing to you, I'm not a proponent of taking your truck and putting it into your house, but if you get rid of your 800 truck payment. You could pull a little bit of money out of your house and you're still paying less. Per month, and you have the 40, 000 now to remodel your house so people are looking at doing debt consolidations also.

Alice Lema: Oh, that's an interesting idea

Guy Giles: on a run a refinance. So, you know, ideally, don't get into all that debt to begin with, if you can avoid it, but but if you find yourself there, you know, there is a lot of untapped equity in, in people's houses right now. So I'm wondering how many people are doing the, I'm going to stay in my house and remodel thing because they have so much equity instead of selling their house and buying another one. I'm wondering how much that's playing into the shortage of housing inventory that we have for sale right now.[00:35:00]

This is probably just one of three or four or five different things that are that are keeping people in their house right now. You know, I, I do know at some point you have that second kid. You know, you're going to need another bedroom or that third kid, or, you know, I, I'm still seeing a lot of people just wanting to get closer to their family and figuring out how they can get into someplace with an ADU or someplace where, where the family can all be, all be together.

Not a, not a bad thing at all, but between first time home buyers and that sort of thing, that's, that's a lot of, of what I'm seeing. I've actually had real estate agents call me this week that are doing that buying two unit, you know, place where mom and dad could be eventually.

Alice Lema: It is, it's, it's kind of a grassroots movement.

Guy Giles: I think culturally we're not having as many of our elders go into assisted living. It's, it's almost going back to the way it was when I was really little. You know, most [00:36:00] of my family lived together, you know. We didn't because we lived in a city, but like all my country can folk, they all had grandma, great uncle, you know, they had like two or three generations and they, they had lived like that for years. It was super common. They thought we were the weird ones.

It can be a perfect scenario. I mean, instead of having, having a really high bill, just have somebody watch your kids. If your parents, which that's just a delight to them to be able, well, probably most of the time on cookies and running around the house. You know, I mean, it could be a huge blessing for everybody. The parents don't have to necessarily pay for a lot of daycare. They're not farming their kids out. The grandparents get to spend time with them. And then and then you're all together as the grandparents get older to kind of help them. And it's just, it's a really good way to do things.

And I would like to see us [00:37:00] get way closer to that kind of an environment. Then, you know, something's becoming a little bit a little bit hard on us. So let's just send them, send them off to the home as I get older, that's more and more on my mind. So, you know.

Alice Lema: Well, and a lot of, a lot of us can't afford it. You know, the assisted living or the retirement homes are super, super expensive. But going back to the multi generational lifestyles, the, just have a couple of minutes left. How does that work with the lender? So if you get a grandma, like a Gen X and a millennial, you've got three of them. How do they fill out the application? You know, how do you vet each person?

Guy Giles: We, we just do them all together. Like, I mean, honestly, it would almost look like, it looked like one person because you're going to have your credit scores. So we always take the middle credit score from everybody. So whoever had the lowest middle, lowest middle one, as far as that goes, incomes will combine those debts [00:38:00] will combine, those basically.

And we're just looking at the overall picture, but they can absolutely buy and do it like that. And if the grandparents aren't ready to do it, but they might have a little bit of money or income that the Millennials and everybody can't put together, we have non owner occupying co borrower programs that they can help bolster the, bolster the income as far as that goes, get that piece of property that they want now, and then eventually, you know, kind of move in there.

So there's, there's, and there's not any hits for, for doing that at all. So there's actually a lot of, a lot of different options out there right now for, for everybody. I mean, we're still looking at, you know, for the person that writes off everything you know, well, we're going to have creative stuff next time.

Alice Lema: We're going to have to have you back. Have a great weekend folks. Bye now.