Real Estate Show Lender Updates April 2023

Real Estate Show Lender Updates April 2023

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Real Estate Show April Lender Updates 2023

Alice Lema: [00:00:00] Well, good morning, Southern Oregon. Welcome back to the Real Estate Show. So glad to have you. I'm Alice Lema. I am a local broker with John L. Scott Real Estate here in Southern Oregon, and today we're welcoming back our in-house lender Guy Giles of Mutual Mortgage. He's gonna come on the show as he does every month and talk to us about what's happened in the financial world and how it pertains to us here in southern Oregon.

In the meantime, get some of our statistics from the Rogue Valley Association of Realtor website. You can get these for yourself, but we just finished the first quarter, 2023 and I've got some news for you, so check it out. Jackson County Days on market, 61. That's up from 36 this time last year. Yes, that's double.

But I'm here to tell you 61 days average market. That's still a bonafide sellers market in Jackson County right now. Now, if you dive down into these numbers, you'll see different neighborhoods and different kinds of property have different days on market. But that's the [00:01:00] county average, the number of listings in Jackson County are up 17.7%, but I'm also here to tell you that's not enough folks. We need more listings and we need them desperately. The rural property prices in Jackson County are down 4.6%, but perspective that's averaging $615,000 per rural property in Jackson County right now instead of 645,000. That's not that bad. Folks, our existing residential sales excluding new construction, those prices are down only 2%, averaging $390,000 instead of 399,000 from this time last year.

As promised, we're reporting our short sale and foreclosure activity. Jackson County last quarter only had eight foreclosures and zero short sales. Josephine County. Similar, similar experience. Josephine County averaging 77 days on market. That's up from 36 [00:02:00] days on market from this time last year.

So still sellers market, again, different numbers. If you dive down into certain neighborhoods and. Property types. The number of listings in Josephine County is down 4.4%. The rural property prices in Josephine County are down 9.7%, but again, perspective, that's looking like $480,000 now instead of 523,000 from this time last year. So still holding their own.

The existing residential prices excluding new construction, Josephine County are down 5.6%, but again, perspective, that's looking like $365,000 in Josephine County instead of $375,000 in Josephine County. Short sale zero. Josephine County last quarter. Foreclosure activity, five sales in Josephine County last quarter. So again, still holding our own folks. Bring in the listings .And let's talk to [00:03:00] Guy Giles.. Don't go away.

Well, hey, Southern Oregon, welcome back to the Real Estate Show. So glad you could join us today. We have Guy Giles from Mutual Mortgage Back. He's one of our beloved sponsors. We appreciate him very much, and he comes on every month to bring us up to speed, what happened in the last 30 days, which was monumental again. Guy tell us last four weeks.

Guy Giles: Man. Well, I think the biggest story right now is, you know, we, we talked a little while back about some of the crazy numbers that came out with the jobs reports, where they were showing over 800,000 jobs that came in. And by the time they, you really took out all the weirdness, like the population control adjustment and all the weird things, it was maybe 80,000, 80,000 jobs that got created during that time. So I'm thinking that, you know, in the next couple weeks, definitely by May 10th, a lot of these numbers will be reconciled and [00:04:00] we'll start to see rates coming down.

And, you know, I mean, I'm hearing everywhere from, you know, well I've, I've been saying at this, you know, some point this year, you know, rates will come down. I was hoping end of first quarter, you know, beginning of second. You know, so right now I'm hearing everything from, you know, 5.2 to 5.5% is what they're, what they're saying. I know. I'm getting that look from you. If you're on the radio, you can't your face right now.

Alice Lema: So that's like half a point, half a point to a point maybe.

Guy Giles: Yeah. Yeah. And if you actually, if you look at that a, a point, if we go down a point in rate and we're talking 1% when we say point, so that kind of goes for if you're charging fees, if you're looking at your rate and all of that. That would actually add about, and I wrote some, actually notes earlier, about 5 million people into the buyer's pool that really can't afford a house right now. So, you know, there's people that, you know, I think I have [00:05:00] no free time.

I don't know what kind of free time these guys have to do these numbers, but, but, that is a statistic right now. If they go down, you know, 1%, which conversely, you know, what we've been experiencing over the last the last 12, 14 months is going the other direction. So, you know, a lot of buyers out of the buyer's pool, you know, I mean, it's not all good news, if, if it goes down a point. I mean, that means the, this blooming recession, you know, is, is happening. But as far as from our standpoint, rates will go down and, and it'll look a whole lot better in the housing market.

So we're, that's kind of what we're looking forward to is just a little bit of reconciliation of some of the numbers that have been coming out and, and overall I think shelter cost is about 40% of what kind of goes into the inflation numbers. And we're on this, I've mentioned it before, this 12 month moving average on these. And the last really high number will be dropping off by on May 10th.

[00:06:00] So we, we've already seen some relief. It, it is starting to happen, but I think some of the, some of the bigger shifts will start happening in the, in the coming months. So I'm looking forward to that. You know still not a bad time to buy. You know, I, you know, just like, like I was talking about, recently is, you know, if you try to catch this thing at the bottom or where it was a year ago when we were in the good old days, you know, but remember the good old days we're bidding $30,000 over on a house praying we got it.

Alice Lema: It was a lot of unhappy a lot of unhappy people on both sides back then. Yeah, the seller's market just got too extreme, in my opinion. So I'm thinking buying now is probably better than waiting till the rates go down because the buyers won't have as much competition with each other.

Guy Giles: I, I a hundred percent agree. And, and I've done, I've done the math, you know, all the way, [00:07:00] just all the way out. Just even a couple of years, you know. You're, you might pay a little bit more. We probably would from what you're renting to buy a house if you don't have a big down payment, but, but by the time you realize the tax benefits, the appreciation on the house because they're still talking over three, 3.4% appreciation, you know, for the year in total.

And then you're, you're paying down your mortgage also, there's, there's a lot of of benefits yet, you know, you gotta, you know, maybe replace a window or, you know, something on the house. So, I mean, it's, it's not all perfect, but overall, just mathematically it makes a whole lot more sense to have a $400,000 asset appreciating than your 10% down, which is four, $4,000 or $40,000 sitting in a bank account someplace just losing to the inflation.

Mm-hmm. And if you don't have that big of a down payment there's a lot of ideas that Guy

Alice Lema: and I have about generating that so that your payment's more comfortable. [00:08:00] But you know, I guess I'm sorry, but I am, I'm worried that if we're gonna get how many more buyers did you say. Because we, we still have a housing shortage.

Guy Giles: They're not all in this valley, by the way.

Alice Lema: But some percentage of them are.

Guy Giles: Yeah, it would, it would be at, at one percentage point lower 5 million buyers that, that are kind of priced out of the market right now that would not be priced out at that time, though.

Alice Lema: There's less competition right now, and if we were able to get more sellers listed this spring, we might even out the playing field a little.

Guy Giles: I, I think so. You know, we've had, for a long, long time the sellers were in control and then the buyers were a little bit more in control and, you know, just, just a nice balance would be good. So everybody kind of gets close to the house they want and the other people get to get into the house. You know, and there, there are a whole lot more, you know, the demographically 30 to 34 year olds, which are [00:09:00] typically your first time, you know, that's when they're buying their first house.

There's a lot of them kind of coming up on that age right now. So I think I don't know it, I say a perfect storm. You know, we're, we're, we're getting to the point. I'm still, I'm still slow, don't get me wrong. But I, I'm seeing things that are just coming down the road that could make us really busy quick.

And if you buy right now, you know, instead of asking for you know, 10,000 in closing costs, maybe you just ask 'em to reduce the price, pay the higher rate. In a few months, you refinance the thing. We're not gonna be charging any bank fees to refinance it, but you might even get a bigger bang for your buck because rates are gonna be coming down sooner than paying, you know, a bunch of money. Or you know, just, I think it's good to be strategic about where you where you can put that money. And you know, it's not guaranteed you're gonna have the sellers paying for a lot of anything. But if they do, it's a good conversation to have instead of just the immediate knee-jerk [00:10:00] reaction on, we should maybe apply it towards this. Maybe just kind of talk about long-term goals a little bit.

Alice Lema: Mm-hmm. And again I'm watching a lot of buyers in the under 700,000 price range. We're looking at the three to 400 and they're getting their closing cost credits from the sellers right now. The sellers are much more willing to play ball like I haven't seen since the shutdown? So we've got kind of a nice buttery situation brewing as long as we don't get some huge surge of buyers competing for the cheap few homes.

Guy Giles: Yeah. And, and I think a lot of 'em will come out of the woodwork. You know, people even if rates went up to you know, 8% and stayed there. As long as they were just somewhere so people can just, you know, kind of get that in their brain. And I'm not wishing for that rate. I don't, you know, I don't wanna try to sell that, but, but have 'em come down and just, just be, be something that's [00:11:00] constant for a little while. Right now it's just everything's going up and down.

Alice Lema: And it's that volatility that makes it hard to plan and, and you can't have your personal monthly finances disrupted by $400 a month every time the Fed decides to do something, then you, then you can't plan.

Guy Giles: No, it's, it, it is, really difficult. Actually I I, you know, I like to look a little deeper into things, and I never want to be salesy. I mean, if, if it's the right thing to buy a house, you know, I want to help you get into a house and if it truly isn't, you know, so, so don't ever take anything that, I'm saying is trying to be salesy. But, but the numbers do, you know, I mean, the math is just the math. And if, if you look at this, you know, even at 3.75% rate, you know, monthly payment of eight, $1,850 on a $400,000 house. I mean, I shouldn't go too deep into the weeds. But go that going up with inflation, with the houses going up to [00:12:00] $420,000 and say the rate is six and a quarter now that payment went from 18 to $2,500, which is substantial. You know, that's $736 more.

But if you look at what people's earnings are, because inflation also cost a lot or caused a lot of the wages to go up, so the average increase on the household was over $10,000 during that time. So when you, when you net the whole thing out, even though your payment went up 700 bucks a month, you're, when it's all said and done, even with counting in taxes going up everything, you're still probably close to $400 ahead if, if it's just averages.

Because like, obviously you can't speak to every, every personal thing, but people are making more money than they were when the rates were really low. So not only is it a good time to maybe negotiate for that house and not have to pay over what it's worth, you're probably making more money. So it's, it's really easy to just look on the surface and say, [00:13:00] gosh, you know, my my

Alice Lema: and you're more likely to get the house. See, that's the other thing that people are forgetting about what happened the last couple of years is there was all this arm wrestling and gnashing of teeth, and then only one person got the house.

Guy Giles: Oh man, I saw, I saw everything. But, you know, willing to go mow the lawn at their new house for the first, I mean, it was,

Alice Lema: what a great idea. We should throw that in next day.

Guy Giles: Oh man. Yeah, that's why they don't let me sell real estate. I'd be wheeling and dealing all day long. At least I can kind of just stick to the math on this.

Alice Lema: Yeah. Although I think cleaning up the gutters, that would be a better one than mow the lawn. Oh man. But mowing the lawn would be, but anyway, we're we're digressing. So but seriously, if, if the listeners could run the numbers for their own situation and also add in that three to 5% appreciation, because what you're talking about, the difference in people's payment does not even include the bump up [00:14:00] for the property being more valuable?

Guy Giles: No, a absolutely and you know, kind of speaking of that, if you go back the last 81 years, you know, cause there's a lot of people thinking, oh, you know, housing is gonna go down, it's gonna go down. I mean, this is nothing like the, the four years after 2006. I mean, I could, we've gone into that a bunch of times so I won't get too deep into it.

It's nothing like that with people with no equity in their house with, all the weird loans that were out there, all the arms that were coming due, the negative amortization loans. Out of the last 81 years, 73 of those years, housing went up. I mean, wow, that's pretty good odds if you were a boxer.

Seven years, yeah seven years they went down and four of 'em were after that big crash that again, was unprecedented due well, due to my industry in a big way, to be honest with you. And there was one one year, so you got one year that, that it just stayed equal. Seven years that it was down. Actually one of those years it was pretty much [00:15:00] equal, but they, since it was just any down, I, I counted that and 73 years that it was up.

Alice Lema: So that's shocking.

Guy Giles: Yeah. I mean, I, I just don't know anybody that you know, unless you're going in trying to make a quick buck and sell, sell the house next month you know you're gonna do fine in real estate. Most of the millionaires in the world attribute over 60% of their wealth to real estate. And I mean, people are just, they're more committed to their jobs. They're more committed to the area, more committed to everything when, when they own a house and, yep.

Alice Lema: We're talking to Guy Giles Mutual Mortgage, one of our sponsors. Thank you so much for helping us bring the show every week. We're gonna have to take a quick break here and say thank you to the other sponsors, John L. Scott. Ashland, Medford, our local Rogue Valley Association of Realtors, also known as AVAR and Guy [00:16:00] Giles. Thank you very much. The show is gonna be repeated tomorrow, on Sunday at 6:00 PM so we'd like you to listen in again and hear all of guys good tips and forecasting. We're gonna ask him a little bit about the banking crisis and what else is coming up for 2023. So don't go away, Guy Giles, and I'll be.

Well, welcome back to the Real Estate Show folks. I'm Alice Lema, broker here in beautiful Southern Oregon with John L. Scott Real Estate, and we're interviewing Guy Giles, at Mutual Mortgage, and he's our in-house lender and he comes on every month. So Guy right before the break. You were talking about the changing interest rates coming in the future and we're predicting perhaps more, even more buyers than sellers, but I wanted to loop back a little bit. Do you have anything to weigh in on the banking crisis, because that's awfully prominent in the news and I'm getting a lot of [00:17:00] questions from buyers. Well, like, what does it really mean? Does it mean anything?

Guy Giles: Potentially it, it, it could, you have just a whole bunch of, a bunch of banks, especially this one. I mean, I don't if you guys are familiar with the, the F D I C insurers up to $250,000 in deposits. And this, this big one down in Silicon Valley, I think like 90. And, and I apologize, I didn't know we were talking about this. So I'm, I'm trying to remember back and if you asked me what I ate for breakfast yesterday, we, but. It was well over 80% of the people in that bank had more than a quarter of a million dollars sitting in that bank. So I don't know if there was an interest to kind of bail out their friends. I, I don't, I honest, honestly, I don't know.

The Fed just kind of can pick and choose. They're a private company and you're gonna get me in a bad mood and I'm in a good mood. But, but really, I mean, Janet Yellen was actually asked about that. She said if there's, if this thing [00:18:00] goes deeper and we start having more issues with regional banks, which for the most part that's the ones we care about, you have these big ones that just get more, more consolidated and more power given, you know, to one.

And then, and, and she said, you know, we'll take that on a case by case basis. We'll will, we'll vote on it and if we vote on it and we deem it to be worthy of, of helping them, we will. And then, and then she corrected herself mid-sentence and said we have to have a super majority of us voting to, to, to do that in order, in order to, to help them.

So who knows. They're there are a bunch of people over their heads driving ahead, looking in the rear view mirror is the only way that you can really explain the feds. I would've loved it if more of 'em would've held an actual job in their life other than just , but, but they, you know to be truthful, what [00:19:00] what they've done, even though they were, they were really slow getting at it, they were in denial. They're, they've waited way too long. And at this point, they really need to start easing off because they've accomplished what the goal was and, and really inflation just kind of boils down to too few goods and too many dollars.

So we had stimulus check you know, what, what was there, three. I didn't, I didn't actually get any, but there was three of 'em that went out and you had, at that same time, the fed artificially holding rates down by buying our mortgage backed security. So for anybody that doesn't know when the fed raises rates, that does not directly, directly result in higher rates for housing.

They control just kind of the, the day-to-day stuff. Your, I mean your home equity lines of credit, your credit cards, cars, things like that. But one thing that they did was they created a whole much more buyers for the mortgage backed [00:20:00] securities, which was them buying them. So that helped keep rates artificially low for a little while.

And then once they saw that, that inflation was not transitory, the rest of us knew it. You know, but, but if they would've handled it different, it could have been maybe, But either, either way, they, they ended up taking trillions of dollars of those mortgage backed securities putting them back in. So there was less competition for those.

And so consequently, those kind of went up. That was partially why the rates went up. But what they've managed to do now, Is is take some money out of the, out of the system. You raise rates. Say you're going down to buy a motor home and you're gonna finance it and it's gonna cost you a thousand dollars a month for that motor home.

You know, and then a bunch of people are doing that cause that sounds reasonable. And then rates go up and now all of a sudden that same motor home is $1,800. It's all money that was never really there. You're just [00:21:00] creating this, this debt. So if these people decide not to buy that motor home, that's more money that's not in the system.

So that's one way of kind of pulling it out. And now that we have savings rates that are a little bit higher than what they were, which they were zero forever. You can get maybe 5% on a on a year if you commit to that. That's more money getting kind of pulled out of the system on the other side. So now we have some of the supply chain that is back in order.

You know, it's not fixed yet, but it's, it's better than it was before covid. So you have more goods out there, less money in the system. So that should translate to lower inflation in the long run.

Alice Lema: Well, and, and is in that scenario, the markets are normalizing a little bit on their own. Which, yeah is not a bad thing.

Guy Giles: No, no. It's, no, it's, not a bad thing, you know? So we, if we get the numbers that we should, like I said, some of the highest numbers on, on the housing, you know, just your shelter costs [00:22:00] should be, I mean it's just there on a chart. So, I mean, honest honestly, that that last high number will roll off after that, you know, cuz you have 13 months on there and then that last month will just kind of roll off.

That'll happen again around May 10th of next month. And that should hopefully be the start because we've already seen the other things kind of easing to it now. Recession, sure. But actually on, on our side of things that kind of, that kind of helps us a little.

Alice Lema: Because that's what's encouraging the Fed to drop their rates.

Guy Giles: It'll encourage them, it'll, it'll translate to lower mortgage rates. The mortgage rates are really tied right to the inflation. So, and then the Fed is the ones that kind of work on the inflation, so they all kind of go hand in hand. But, but really the, the just the overall picture of everything.

You know, we're, we're just, we're starting to lose some of the numbers from a whole bunch of stimulus checks and to be, you know, quite honest, everybody was, you know, they, [00:23:00] when they first got their stimulus checks, everybody, everybody paid down their credit card debt. They couldn't go spend it. They didn't know what to do with it.

So they paid down their credit card debt. And then as the next stimulus checks came in, they saved a little bit and then they spent it, and then the next ones came in and they saved and spent it. And now what you're actually seeing, people aren't saving money and their credit cards are going up because they wanted to kind of keep that lifestyle going.

And I'm, I'm off on a little bit of a rabbit trail, but, but all these things do affect you know, the mortgage rates. And I think right now's a really good time to call Alice to get preapproved and to be ready to buy a house. And when that right one comes along, do it. And even if we lock you in at a rate and then they drop down in the middle of it, you know, we totally have the ability to float you down to that lower rate.

Another thing that we're doing for people is, you know, if you buy with us and then the rates drop in the next couple years, [00:24:00] we're not gonna charge you any banking fees to to do a refinance.

Alice Lema: Oh, that's super cool.

Guy Giles: That's, there will be some title, which is a little bit of a reduced, you know, it will be reduced. Because you had it done not that long ago. But as far as that goes we're not gonna be, we're not gonna be hitting you up for any money, so I, I think it is a good time to try to,

Alice Lema: And even though the prices have slumped a little bit, and I, I use that word kind of in air quotes because we're down off of our highs, the prices are still higher than they were by quite a bit.

You know, losing two to 5% of the gain, you know, still puts you at 90 something percent left. So I guess one of the fears I have is if the Feds lower the rates, will the prices go back up. Will the prices go up again? Are we just gonna have to wait and see what the [00:25:00] supply looks like? What are, what are your predictions for the rest of 2023?

Guy Giles: Well, yeah, we, we, we just, we just have to see what the, what the demand and the, yeah. The, the, the supply works out to be. But I, I would anticipate that they, that they took a little bit of a breather, but then they start going up again. I mean, as far as the prices on the houses, I mean, historically that's just, just what it does.

I mean, the, the, the only years right after 2009 was when we really had issues with, you know, for sustainable years. Other than that, I don't, I don't have that chart in front of me, but I don't think there was more than two years where it where it was, you know, down or negative. Other than that, it was just every now and then there was,

Alice Lema: And that was 70 something years of increase over 90.

Guy Giles: It was 73 over 81.

Alice Lema: Wow. That is really close to a hundred percent. Wow, that's incredible. So you can look at the data and, and say that your [00:26:00] chances of your property being worth more money are pretty, pretty much 90% or something. And even last year, through all the volatility all three counties in our area had appreciation.

Guy Giles: It's crazy. It's crazy. And then you just look, just, yeah, just don't get hung up on the national news. You know, they, you gotta figure their job is headlines. Their job is to get you to watch them. And if they said everything's okay, you'd be like, well, good. I'm gonna go garden for a little while. They can create some fear then, then you're gonna come back and watch.

Yeah. You know, so, so yeah, the, the math, when it's all said and done doesn't lie. And even though I really feel like there's just been some, been some crazy stuff coming out, just skewing some of the numbers, they can't keep that up forever. And investors are smart. And when it's all said and done, you know, that's what's gonna determine where people are putting their money.

And mortgage [00:27:00] backed securities and some of the longer term stuff because the, the economy, you know, I mean it's, it's not perfect right now. But when was it ever, you know, you're either going up a little bit, going down, you know, whatever. But I do think that it is a good time to buy and I tried to convince myself it wasn't, cuz it wasn't feeling like it, we just weren't doing a lot of business.

And then took like, God one evening for like five hours just working it all the way down to having the best investment gal, you know, investing your money and how much you would make on your down payment that you just have sitting around. You know, as opposed to having a house appreciating for you and the tax write offs and the rents going up on your house. And there's just, there is just a lot of reasons to be a homeowner.

Alice Lema: And you get a place to live.

Guy Giles: That's true.

Alice Lema: That nobody's going to sell out from under you or make you move so they can move in.

Guy Giles: Tell you what color or paint you can paint that bathroom. So yeah, do whatever you want in your own house.

Alice Lema: It's pretty, [00:28:00] being a homeowner is pretty cool. But I just like how you bring it down to the numbers because it still pencils. And Southern Oregon a high demand area. So where some of the other parts of the country are probably gonna have more of a slump than we are or we did. Yeah, our values are still holding, holding their own.

Guy Giles: This is, this is just a rare place. I mean, I was over in, in Bend yesterday and that's, that's a cool place too, you know, for different reasons. But this keeps everybody so close to where they came from. Unfortunately, or fortunately now from California. And, you know, it's just not far to get up here from the Bay Area or the Sacramento area or wherever. So, and the coast is a lot closer here than it is in Bend, so it's, there'll be demand.

Alice Lema: Yep. Yep. They're still coming. And, you know we, we have less than a minute left, but I just wanted to throw out that extra 4% [00:29:00] tax on the LA homeowners that have a property of 5 million or more. Up to, there's another tier. So that just went into effect April 1st, which was just, you know, a week ago. So we're sure getting a lot of those folks because they can sell, pay their tax, they can choke that down and come here and still have more than enough money to buy not only a home, but probably a rental.

Guy Giles: Yes. That's, I, I, I didn't, I didn't, I didn't realize they found a new level of stupid down there.

Alice Lema: And we're gonna talk more about that right after a quick word from our sponsors. Hold that hold that thought.

Well, welcome back to the Real Estate Show folks. We're talking to Guy Giles today of Mutual Mortgage, and right before the break we were talking about not only buyer demand, but some of the things [00:30:00] happening in our neighbor to the South California.

And the reason we're bringing that up is because that extra what they call mansion tax, That they're imposing in Los Angeles on those homeowners is actually gonna be driving more people our way. So again, I'm gonna, I'm gonna say it one more time. I'm worried about having way more demand than we do supply.

Guy Giles: Yeah. It is kind of a, a kind, a special time right now as far as. You know, I, I, I wouldn't think I'd be just encouraging people to get something, you know, when, when, when rates are up like they are, but, but it's just becoming abundantly clear that, that it is, it is really a good time to buy. Mm-hmm.

And yeah, you, we don't need all that extra competition. Once school lets out, then everybody will be taking their vacations up here and they'll be finding out what a cool place this is. I was actually, because I went to band yesterday, they have that gauge up on top and I don't remember seeing it at 10 and a half feet [00:31:00] before.

So this is just after you get off 62, like you're heading down that long road to by Diamond Lake.

Alice Lema: Are you talking about snow level?

Guy Giles: It, it said, it said 10 and a half feet. I stopped and took a picture.

Alice Lema: That's awesome of it. Oh, the lakes are gonna be full.

Guy Giles: I know. Finally, I think Shasta is within 20 feet right now. And yeah, we're gonna have, we're gonna have good lakes.

Alice Lema: And well, and again, every time people, like you just said, people come and visit for a weekend and then they buy a house.

Guy Giles: So, yeah. So I, I would, I would encourage you and your families or whatever, just get out there and start looking right now.

Alice Lema: So what kind of concessions are you seeing on the, the contracts that are coming through your office? Are, are people pretty consistently getting some closing credit from the sellers?

Guy Giles: They actually still are. You know, we, we haven't, I don't think hit that, hit that bottom yet. Like the rates, I think you're gonna come down [00:32:00] pretty good, pretty quick, and it, it, it'll be a very short time. Before there's the multiple offers, but we are seeing, we are seeing concessions and I don't know what the numbers are on that. Those are things that I don't really have access to. I can only see what's coming through my door. But I did hear a statistic not that long ago, and I, I make up enough statistics as it is.

I don't wanna do that again on something that's not my side. Cause usually I can get pretty close. But I think it was pretty, pretty crazy how much people were actually giving up to get you in their house. You know, they're, they're anxious to move on to their next venture also.

Alice Lema: And well, and it's critical for these sellers, like you just said, to get on with their next venture. That means they have to close the deal now. Yes, and that's something I think people forget that the whole reason they've gotta sign in their yard is so that they can get it done. And if you price it reasonably, then you will sell in 30 days. More than 50% of the properties should be [00:33:00] selling in 30 days or less regardless of the kind of market. That's by Alice, that's Alice's opinion.

However however we still have some properties that are priced high and they don't get the traffic, and then then they have to start doing a series of reductions. But it'll be interesting as these new buyers start to come back into the market. Maybe that will encourage more sellers to list their house this spring.

Guy Giles: Well, and, and, and another way to to look at this is, I mean, I don't, I don't think, well, I guess because of inflation and just over the years, the, the number's naturally gonna be maybe the highest. But we right now have more equity in our houses than we ever have before because of all of these years of, of them going up.

So say you are one of these people that, you know, everything was great. You got your check, you bought a boat, a side by side, you have some credit card debt. Maybe when you sell your house, you know, you're thinking, oh gosh, I don't wanna sell my 3 and a [00:34:00] half percent rate and traded in for a six in quarter percent rate.

What if you paid off some of those debts with the equity in your house when you sold? And now all of a sudden you, you have $1,200 less in payments for that. So even though this new house is, it might be up a little bit from where you were, where you were on your house, your overall expenditures per month could go, could go down.

And I've got some calculators that I've ran with some people that have come in and wanted to, to refinance so that they could consolidate some of that debt and we just kind of call it their blended rate with all their payments and everything together. And you know, I mean, gut reaction is no, you know, I mean higher rate, that doesn't make sense, but it, but it would be the same thing for them doing a cash out refinance and saving a thousand dollars a month if they sell instead of, I mean, if you have a decent credit score, which your credit score should go up if you pay those debts off, and we can do a rapid rescore and do that pretty instant within just a couple of [00:35:00] days.

Mortgage insurance isn't super expensive, so now you, you know, you might have a good credit score and now you only have 10% down or 15% down. Your mortgage insurance. I've seen it as low as 23, 20 $4 a month. I think that's a whole lot lower than a car payment, a credit card payment. And you know, I mean, obviously the best way to do it is just not get into that kind of debt to begin with.

But if you find yourself there, there's some, there's some options. You know, just getting creative a little bit and sitting down and that's, I think one thing we lost through Covid is I sat down with people all the time and, and I rarely do at this point. But those are deeper conversations. I like to go through the credit report with people and not try to get them to do something else so I can do a bigger loan from them.

It makes no difference to me if my loan's $20,000 more, but we might be able to put you in a way better position than you were in before by just having a prolonged conversation. That [00:36:00] by the way, you'll never have with Rocket Boy or whoever the heck these guys are on tv.

Alice Lema: We're, we're not naming the competition.

Guy Giles: We made up a name. No, we did it.

Alice Lema: No, we did. But that was funny. And you know, if you have a home and you're not in love with, then we still have more buyers than sellers and the rates are coming down. So this is almost like you said, Guy, the perfect storm and it's temporary.

Yes. It's like we don't know how many months we're gonna have this kind of blended environment. But if you don't love your house and you can get it on the market this spring, you're gonna do pretty well and the amount of equity that even people who have only had their home a a couple of years, I think that's where the big offset comes in the next payment for the new place is because you've got such a big down payment.

Guy Giles: That's true too. Even if you don't have debt to [00:37:00] pay off, now you've got something, something else going for you and mm-hmm. And again, if you, if you miss the lowest rate, you know, we can, we can have a talk about you, I'm doing a refinance at some point, and it looks, I can't say it enough.

It's always my heart to try to get you into the right loan the first time, so you don't have to go through that again. But we're trying to minimize the cost and all that. If. If that's the case.

Alice Lema: And well, and until they make you in charge of everything, you're not gonna be able to do much about it except react like we do.

Guy Giles: Yeah. Well, and, and the biggest thing is just to, like I said, get in there with Alice and have her do a CMA. I mean, she's not gonna yell at you if you don't list your house, but, but really find out what it's, what it's really worth right now. And you know, I mean, having the facts is what really helps you to make, make a decision.

And, and if you're just kind of guessing because the house down the street sold for this or that, or you know, maybe that person had to sell it cuz it was, [00:38:00] I hope for whatever reason and you, you really don't know what your house is worth unless you have a professional come in and do it.

Alice Lema: Well, and I really like how data driven you are guy, cuz there's no emotion. The numbers don't lie. And yep I just think people need to spend more time running the big picture, not just the interest rate. Guy, thank you so much for being on. We look forward to having you on again next month.

Guy Giles: Well, hey, sounds good.

Alice Lema: Thank you very, very much. Guy Giles Mutual Mortgage Insurance, thank you for also being a sponsor. This will repeat tomorrow at six 30. Have a beautiful weekend. Hug those you love.

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