Southern Oregon Radio Show Interview with Guy Giles Mortgage Lender

Full Video Transcript Below

 [00:00:00] Alice Lema: Well, good morning, Southern Oregon, and welcome to the real estate show. I'm AliceLema here with my co-host Pete Belcastro. We're both real estate brokers here with John L. Scott in Southern Oregon. And what a bizarre week we had Pete, we have smoke. We have water. We have people trying to move. Obviously it's just hard to get our head around.

[00:00:27] Pete Belcastro: And, and, and add to that it's tourist season and a lot of people are here. And a lot of people are just, you know, I don't know how many years Alice, we've been talking about this and been smoke like this. But you know, it gets it's, it grows on people if you're a certain age and things like that, you know, and, and, and people move because of this and they can't, you know, and anyway If it continues, it lingers the rest of the rest of the month and the labor day, the school starting, man, all bets are off then.

[00:00:53] But right now we're going to check and see, you know, this weekend there was a pretty good real estate week, there was a lot of sales went on continues. We see a little bit growth more in, in in listings that have come on in all three counties. But still we're, we're nowhere where we were a year ago, even when the pandemic was just a few months old and.

[00:01:11] There's a lot to talk about today, by the way, Guy Giles is going to join us in a little bit, and we're going to have an interesting, I think, update on kind of what interest rates are doing. We talk, we find that the interest rates were going to go, what if something were going to go up? With the economic things away, everything pointed to that, but they haven't, they've actually dropped.

[00:01:27] So we're going to talk to Guy about that, and this may be a good time to get pre-approved because they can't do this. I keep saying this year, can't keep doing this forever. But who knows anymore? Alice? I don't know it. We'll see what Guy says.

[00:01:43] Alice Lema: People have so much equity. Now I think there's two things. People don't realize how much equity they gained in the last 14 to 16 months, which is a huge down payment if you want to put that toward your next purchase and then you combine that with lower interest rates. It's a very unique opportunity, you know, and as older folks who have watched real estate for decades, Pete, you and I don't see this combination of elements very often in an economy that it really is just an amazing time to not only buy and sell and we talk about this. How often does it happen, where it's good for both sides?

[00:02:18] Pete Belcastro: Well yes, very, we have never, it's still, this is, this is given to us and yes it is. And I think people are very aware of that. I think when I talked with the buyers and sellers that I deal with, they're all aware of the market.

[00:02:31] They know what's going on. It's not like this is a surprise to anybody. They're very aware. I think sometimes people get over excited about what they may or may not get or pay or the pay may or may not pay for something. But we have to be realistic all the way through it, but if you do there's no reason you can't be successful even in this type of a market.

[00:02:49] Alice Lema: So stay tuned folks. We have a quick break coming up. We've got Guy Giles Mutual of Omaha mortgage with our monthly update. Do not touch that dial Pete Belcastro, Alice Lema, we'll be right back.

[00:03:00] Well, top of the morning, everybody. Welcome back to the real estate show. I'm Alice Lema here with my cohost Pete Belcastro. We're both brokers at John L. Scott here in Southern Oregon, and we're welcoming back one of our sponsors Guy Giles Mutual Omaha Mortgage to start talking about what's new and different since last month.

[00:03:22] Guy Giles: Man. Well, it's a little bit, a little bit more of the same. We still have rates that have been really good. I know everybody, inflation's been on everybody's mind, every time you go to the gas pump every time you grocery shop. But I think it's about peaked right now. And I say that mainly because of the economy. We got ADP numbers earlier this, this week and they were about half of what they thought that they should've been.

[00:03:49] So I, I really do believe, the short-term and who knows exactly how long that's going to be though that our rates are going to be good. On Thursday our bond yields were around around 1.17. So if you adjust for inflation at all, you're basically looking at negative on those. So at some point rates get to the point where they're, you know, they can't really go any lower and then they'll have to go up.

[00:04:12] And at that point, all the people will call them for rates to go up. They'll go up, but they still have kind of a long way to go back to where they're even at a normal pace. So I think it's still, at least on my side rates are, are good. And so now you guys just got to find some cheaper houses for everybody, and then we'll be great.

[00:04:31] Pete Belcastro: Well, when you figure that one out, let us know. Last week, Guy and Alice, there were 89 sales and Jackson county closed sales. You know what the average price was? It's $502,000. But within that frame, I admit, there were eight, are you ready for this one? Eight luxury homes closed last week.

[00:04:58] Alice Lema: Wow.

[00:04:59] Pete Belcastro: Here are those numbers. So just FYI there, but still that's quite high. And I think the affordability issue which everyone kind of puts under the rug here is really rearing its head though, because our market really consists of more higher end homes. And now we're in the middle of smoke again, you guys, and I don't know what's going to happen, but I agree with you Guy, I think that has also has peaked.

[00:05:23] Guy Giles: Nice. I, you know, it's funny, I feel kind of responsible. I closed two luxury homes last week and I got another one this week and I just put another one in escrow. So actually this is kind of my fault. So sorry about that.

[00:05:35] Alice Lema: Well, and it's interesting because as the mask mandates are circling again, maybe they're maybe they're not. It's bringing more attention back to that idea of a property right, a little more remote has its own water. You can have your school at home, your work at home, that whole thing again, like we had last year. And so I think our rural properties in spite of the smoke are still going to do well.

[00:06:01] Guy Giles: Yeah. Between my garden and my horses, if you were to stick me at home for six months, I'd be completely happy right now.

[00:06:06] Alice Lema: I think a lot of people across the country, want a piece of that, and they're willing to pay a lot for it.

[00:06:15] Guy Giles: Yeah. And I also think with that Senate bill 3000, with being able to crack down on some of the hemp/weed grows around here right now, maybe some more rural properties will be more attractive for the regular person.

[00:06:31] So might not be a bad thing at all. I don't know if you guys have been following this stuff.

[00:06:37] Alice Lema: Yeah, they're doing definitely making a big effort to try to bring down the illegal cannabis and hemp grows.

[00:06:46] Guy Giles: I don't even think that well, actually I know because I'm on committees with everybody that the legal weed growers aren’t in love with the fact that everybody's grown a bunch of illegal marijuana.

[00:06:56] Anyway. I mean, it's just there's nobody that's happy except for a couple of hemp/weed growers. And I say a couple, there's probably a thousand of them right now, but anyway though LCC is at least get out there and get some people on the ground. And then hopefully Nate gets the resources.

[00:07:13] He needs to do what he has to do because we all just have to live together. And I mean, we can bury our heads in the sand, but honestly, that's been a little bit of an issue lately, but I don't know. I feel like it's getting under control for the, for the first time, which is really nice. And that's all it needed to do is just kind of, even out, it's still the best place to live in my opinion, or I wouldn't be here.

[00:07:35] Pete Belcastro: And Guy you're also just to, just to clarify there, you, you're part of a, task force with the sheriff and that you're involved with. That's why, you know, so much about this. What are the isn't that true?

[00:07:47] Yes. Yeah. We got with the commissioners, it's a Jackson county marijuana advisory board. So I've been on it for a few years, just as a, as a rural property owner that does not engage in any marijuana activity.

[00:07:59] Guy Giles: So there's a little bit of everybody. We have growers on there. The sheriff, we have commissioners, we have code enforcement a little bit, a little bit of everybody, water master.

[00:08:09] Pete Belcastro: One of the issues that has faced all of you is that some of the hemp growers who are, is hemp is not illegal to grow that right.

[00:08:17] Growers are actually, they're testing now more because they're not supposed to have a certain level of THC in them. And many of those hemp growers are actually exceeding those limits. Is that kind of what's going on?

[00:08:29] Guy Giles: That'd be a super nice way to put it. I mean, that would be like a guy in a Masserati, and you're like, oh, he, you know, he exceeded the speed limit a tiny bit.

[00:08:37] It is very blatantly marijuana grows a lot of the time that they're finding right now. So the, the LLCC historically has been able to monitor what goes on with legal marijuana grows. Once that once the hemp got federally, you know, to, to where it was legal federally that was not under the jurisdiction of the LLCC.

[00:08:57] They could actually go into a grower and say you know, could you show us that you guys are doing whatever legally and, and they're like, well, we don't have a permit. This is not part of your thing. And they would literally have to turn around and leave with, with no recourse at all.

[00:09:09] But, but now the the Senate Senate bill 3000, didn't give everything that we wanted.

[00:09:15] You know, we don't want to step on property rights, you know, too much either. We just want to make sure that we have a livable place for everybody. And now the LLCC is able to go in and, yeah and monitor these. Yes. They're, they're going to test a little bit more, but when we say a little hot and it's generally not a mistake that a hemp grower made, and all of a sudden he went from 0.3 to 28, THC.

[00:09:38] I mean, that's, that's a big jump. So, you know, We got to have a little grace, if you make a mistake and that's actually something I've fought for, you know, with the legal weed growers, because it's all we've done is we've made it, you know, tried to everything we've done has, has been to try to make it tougher on them.

[00:09:56] And, and, and it's like, I think they're regulated plenty, to be honest, we just have to get a handle on the ones that you know, they just think it's the wild west out here. And, and it hasn't been for a little while.

[00:10:07] Pete Belcastro: Oh, it's in many places, also the LLCC, which is we've known, we've known it all our lives as the Oregon liquor control commission is no longer called that anymore.

[00:10:18] It's now the Oregon liquor and cannabis commission. So you know, I, it is appropriate because that's the two things that they have jurisdiction over.

[00:10:28] Guy Giles: Oh, so I need to pay more attention to my meetings. I didn't realize that it changed.

[00:10:36] Alice Lema: Not fair to the legal rule, following people that are doing commercial farming of any kind to have kind of this black market undercutting. It undercuts our local economy and it also creates havoc with our water because we have illegal amounts of water being used on some of these crops, the cannabis and hemp that they're not supposed to.

[00:10:59] Yeah.

[00:11:00] Guy Giles: That's definitely something that our, that our water masters been trying to crack down on. I mean, there, there are people that are on EFU land that don't have water rights anymore, that haven't used them in a long time. And, just just kind of going for it. You know, we had people pumping from streams, driving water trucks all over that with people that don't even have driver's licenses.

[00:11:22] So, I mean, there's, there's a lot of activity thats happened and, you know, just, just bring it in, you know, some of these, some of these outfits, and again, I really am feeling good for the first time, you know, in, in, over a year and a half, as far as the direction that everything's going right now. So, I guess we'll, we we'll see what happens next year.

[00:11:46] It's like right now, you can't even ask for forgiveness. If you have hemp plants in the ground that you have not done legally, those plants will have to come out no matter what the THC level is. And so, so this whole, like I said, just wild west, I mean, yeah. I dunno, there's just a lot going on with the whole thing.

[00:12:07] You know, we've always been told that this is perfect climate to grow all of this in, and then everybody moves it indoors into greenhouses. Why do you have to do it right here if that's the case? So we all, we all know that something's going on. And anyway, thankfully we're, we're getting the resources to deal with it. I think they're double and I don't really want.

[00:12:30] Pete Belcastro: That you've been up, we've talked to you for years. Like you've been on this committee for quite some time and know what you know, and you've done a good job with that. So keep up the good work there and thank you for serving on that because that's a, it's something you care about you're passionate about and something you care about our community about.

[00:12:45] So thank you for doing that.

[00:12:47] Guy Giles: I'm blessed to be on it.

[00:12:49] Pete Belcastro: I want to know, I read you, I read the mutual of Omaha newsletter yesterday that I got in my email, by the way, from you. And I was, I was really surprised by when one of the things that was in there was saying, it said 67% of the mortgage activity. I think it was in the United States is refinancing going on right now?

[00:13:08] Yeah. Are you, are you having that same kind of thing or is our market a little bit different to where those rates are changing? That they're not doing it that way? That, that process two thirds of the market in your work?

[00:13:20] Guy Giles: Well in my personal world, I made a conscious effort years ago to get away doing a whole lot of doing a whole lot of refi's I mean, I do them with past clients and things, but, but definitely I have a lot more purchase going on. Probably two thirds of my stuff is purchased, but yeah, I mean the refi's just keep happening and now, you know, everybody's been getting a lower rate for the last year and a half and then rates bumped up a little bit and that kind of shut down, but property values keep going up.

[00:13:51] So now what we're seeing is a shift from people just trying to get a better rate, to they're able to maintain that same rate and maybe pull a little bit of cash out to do whatever they want to do around their house. Cause like you said, We're coming to the realization that we're going to probably be working from home a lot of us.

[00:14:10] And, you know, you might as well make it as nice as you can, or I still think it's a great time to move up in house and just kind of, you know, look around for that. Maybe that the house that you're in right now is that perfect one for the starter home for somebody else. And then you can just progress like we all did. I started out in my manufactured house, my single-wide years and years ago on new falls highway and you know, just little by little.

[00:14:36] Alice Lema: Well, and that's a part of what gives people the optimism to go ahead and list their home finally. Don't you think Pete, is because there's more properties coming on the market to choose from they're not worried about being stuck.

[00:14:50] Pete Belcastro: Well, I mean, we've, we've had such a low inventory. You know, for well over a year. And I mean, a year ago there was still about, about 600 on the market in Jackson county. And we're not, we're around 400 right now, Alice. So we're still below that and there's still, where do I go?

[00:15:06] And, you know, I think for people moving up, I agree with Guy it's absolutely right now, is that perfect time to do that. But being able to sell your house again and you're up against competition that are not contingent on the sale of your house and things like that really complicated for for a lot of buyers.

[00:15:23] And so I don't think we're at, we're not going to be out of the woods yet until we get maybe, you know, double, our inventory kind of thing going, because we still don't have a lot. It just depends again, you know, where you're looking. Closed three luxury properties last week. That's that's amazing.

[00:15:39] It still makes up Guy, this last week there were 368 homes in Jackson county on the market. 368 of those 87 of them were luxury homes. Yeah. Oh that's still, you know, at quarter of the market .

[00:15:57] Alice Lema: Hold that thought we've got a quick break coming up from a word from our sponsors Guy, Giles mutual of Omaha mortgage. We'll continue the conversation about Southern Oregon real estate.

[00:16:07] And well, welcome back to the real estate show folks. I'm Alice Lema here with my co-host Pete Belcastro. We're both brokers here at John L. Scott and Southern Oregon, and we're having a very lively and interesting discussion with one of our sponsors Guy Giles and Mutual of Omaha mortgage.

[00:16:24] And right before the break Pete and Guy were discussing our local luxury market. And Pete, can you repeat how many properties there are for sale in Southern Oregon in that luxury price point?

[00:16:35] Pete Belcastro: Well, I'm just in Jackson county. I can tell you that there of the 368 residences stick-built homes that were on the market last week, 87 of those were a luxury market, a luxury home defined by John L. Scott is $900,000 or higher. Over a quarter of the market has been split that way. You know, our market has been divided as you know, Alice for a long time here around that 500,000 level. And we've seen it, the, the interest with low interest rates, how people were able to move up into, buy instead of 350, they were able to buy 450 and 550.

[00:17:11] They moved up and the market moved up with it, but it really is left a void down below us. Because, and this is another great stat you guys I just love stats. Of that 368 homes that we talked about 145 of them only 145 that were less than half the market are priced at $500,000 or less. That's what I'm talking portability part of this thing. And anyway but it's, it hasn't slowed down. I think it's peaked. It's not going up or in my opinion, I thinkGuy's right there, but a lot of luxury home guys. And where did they come from? Guy? Tell me that. Where are they coming?

[00:17:49] Guy Giles: Well, then this last guy is I don't know how much I should talk, but he's he's an attorney from, from out of the, out of the state, but apparently I lied cause it's not a luxury home, only $875,000.

[00:18:00] So I, I guess that one from yesterday was not actually a luxury home. But you know, just to put it into context,  I'm going down this week to Mexico to build houses. And when we turn over a set of keys to these guys, a luxury home in this neighborhood where we build houses for these guys is literally running water. Because we set these houses up for it, but they don't even have that. So just to show kind of how blessed we are, even though, you know, we may not have the 900, it might only be $875,000 house running water, even is a luxury that, that ever all of us just kind of take for granted. So, I mean, we just live in a, in a super, super cool place and it just, this country in general,

[00:18:46] Alice Lema: We are very, very lucky.

[00:18:47] So one of the things I'm noticing Pete, maybe you can weigh in on this also, is part of the problem we're having is in our opinion, like in the real estate, People, the realtors world, the lenders world, we think the peak is just behind us. And right now, we still have all these sellers that are pricing like it was last year.

[00:19:06] And the buyers are the ones putting the brakes on those prices. They're just not writing their offers that high or they're negotiating with the other property or two that may be come in at what they consider to be a fair price. What do you guys think? That's probably why there's so many 80, 80 something luxury properties on the market.

[00:19:24] There. Some number of them are just overpriced. Don't you think?

[00:19:27] Pete Belcastro: Well, I think you're right. What we saw last week was that the average days kind of the listings that have coming on are taking longer to sell a little bit longer than they were a month ago where they were just flying kind of going quickly.

[00:19:41] I think it was last week that the things that closed the properties that close last week in Jackson county had an average of 11 days on the market, but there was a lot fewer of them last week than there were this week. And the price went back up because of the luxury homes. So I think they're stayed on the market longer.

[00:19:57] Your right, sellers have to be realistic here. Buyers are not going to overpay here. And, you know, for the most part, not all, but buyers are pretty aware of what's going on in the market. I think the smoke is going to have an effect as well. And we're at the top of that the real estate sales curve, you know, Alice that we always talk about.

[00:20:16] We're at the top of it right now in August. And what we've got smoke all around us. That's that's hamper hampering, visitors, hampering, I think a lot of things when we're going to now start after we get to labor day, we start slowing down. So, you know, there's a lot going on and a lot changing.

[00:20:32] Every week this thing changes.

[00:20:35] Alice Lema: Well, you know, I'm not sure about our cycle anymore. I'm really on the fence and waiting to see if the COVID, the late reopening and people still a little nervous about selling their house, if the slowdown happens either at all. Or if it happens later in the year, because we might artificially be 90 days behind because we've got such a late start this year. I just don't know.

[00:20:59] And I also don't know what's going to happen with their school reopening. And if that's going to affect our housing marketing.

[00:21:06] Pete Belcastro: What about the Delta variant? That's out there. They're mandating mass be going here and there again, if shut down, I don't think they're going to shut this thing down. They can't do it again. And people are not going to are not buying this. And so what am asked again, we could be in any way that affects our market here. Some extent, right.

[00:21:25] Alice Lema: But our normal cycle definitely would be, we'd start to taper off into the fall for sure.

[00:21:32] Pete Belcastro: And Guy got you had a great point about people gaining equity and cashing out in some refinancing.

[00:21:38] I think that's very true. We saw a 20, almost a 25% increase in the medium price in Jackson county from a year ago. Pretty much period. So I see people doing that.

[00:21:51] Guy Giles: I just had a guy just last week also that I did a loan for. He had mortgage insurance. He wasn't close to his 20% down when he bought it.

[00:22:00] And it was probably a year, year and a half ago. I'd have to look it up. And he just called me and asked you know what I thought his house was worth. I think he kind of had me a little mixed up with his, with his agent. But I got him back with his old agent that he that, you know, that he bought the house from, and she did a CMA and we decided to refinance him just to get him out of the mortgage insurance.

[00:22:20] And I had an automated value. So it didn't even need an appraisal. Got him completely out of his mortgage. Yeah, dropped him by a half a percent on the rate. And now we're actually working, doing spreads and credit scenarios where I could probably get him three quarters better. And yeah, you can definitely, you know, I mean, I think it's a good time to, you know, call your agent and find out what your house is worth.

[00:22:44] If nothing else, you know, if you're having a glass of wine on Friday, it'll be a fun thing to talk about, I guess, with your spouse. But it's amazing how much things have gone up.

[00:22:54] Alice Lema: So I'd like to talk about mortgage insurance for a quick minute. If somebody is getting their refi done to remove their mortgage insurance, because now they have 20% equity or more how much of a difference in their payment are we talking about in some cases?

[00:23:10] Guy Giles: And I mean, in some cases it could be $350 a month. I rarely see that any more. Mortgage insurance has become a lot more affordable over the last couple of years. And if you have a decent credit score, I'm speaking to what we call the conventional loans that the government loans, their mortgage insurance is set. It's forever. And it's, if you have an 800 FICO score, you're going to get the same price as a 625 score.

[00:23:38] Alice Lema: And that the FHA, the VA, those conventional programs that you can do this with.

[00:23:44] Guy Giles: Yeah. VA's, VA's, don't generally have them, but not generally, they don't have mortgage insurance, but they kind of hit you with your upfront fee if you don't have any service connected disability. But I know on this guy, I think we saved them $140 on his mortgage insurance and that's awesome. And then it ended up being about $220 a month because we lowered his rate also. So, I mean, over the life of the loan, it was definitely, it's going to be a good.

[00:24:12] Alice Lema: So Pete, I have a question for you. Do you think that some sellers are opting to, well, what would have been sellers opting to do something like what a guy Giles is talking about, where they're not only getting a lower interest rate, they're getting their mortgage insurance removed. And so now they don't want to sell their house. How much do you think that's playing in?

[00:24:33] Pete Belcastro: Well, you know if you were paying a big ton of mortgage insurance a few years ago, which when it was pretty high, Guy's right. It has come down because people were freaking about this. Consumers were complaining about it, I think. But anyway, it has come down. So why not do it again? It's where do you go? I'm go ahead.

[00:24:53] Guy Giles: No, I was just going to say, I think it's good for people to understand exactly how much equity they have in their houses right now, because yeah, you could refinance and you could you know, fix your house up a little bit, or, you know, you could realize that you have a ton more equity in there and you might be able to move up in house.

[00:25:11] I mean it's at least worth exploring up into that neighborhood you've always wanted to be in or that little bigger house. Cause you had a kid and sell yours. I mean and, and then you've achieved, you know, your goal. So I always have those conversations with people also. You know what their long-term goals are, or if it's somebody that's in that big, nice, dream house that they've been in, maybe you know, it's time to settle down. Both the kids are gone and he wants to clean the whole upstairs.

[00:25:39] Alice Lema: I think that's a really, good point. Because this is, I don't want to say once in a lifetime opportunity, but it is such an interesting confluence of economic elements that just doesn't happen usually simultaneously. So this idea of going ahead and putting your house on the market and getting whatever you were going to get anyway and lock it in for 30 years is super attractive.

[00:25:59] But it's hard for some of these people they're looking at, at cashing out and having like $80,000 in their pocket. But then they're wondering where they're going to go.

[00:26:10] Guy Giles: Yeah. That's, that's definitely part of it as far as, as far it goes.  I do hear that you know, that it's, it just doesn't, it doesn't make sense.

[00:26:19] It actually does in a lot of times, because you know, when that person got in their house, they only started out with 5% down and or three and a half percent down on an FHA. So they're already paying for this mortgage insurance. Now if they have $80,000, so that's 20% on a $400,000 house. So now they don't have mortgage insurance.

[00:26:39] So you just got rid of, you know, a hundred something dollars. I think we're on 40, what? $42 per 10. Anyway, I'll get too deep into the numbers if I think about it too much, but really, I mean, I think it's worth, at least calling you guys see what your house is worth and you know, I mean if it doesn't make sense, it doesn't make sense. But I'm finding that it does make sense in a lot of instances, people just got into their starter home and I'm always a proponent of not sitting forever, at least get into something.

[00:27:07] So you're building some equity. Those people are really looking back right now. Just thinking, you know, Hey, I've got a lot of equity in my house and if I hadn't done it, I wouldn't right now.

[00:27:16] Pete Belcastro: There are a lot of baby boomers like myself. You guys are not there yet in terms of age, but there's going to be a $36 trillion transfer of wealth from the baby boomers, my generation down, when we, as we retire and die. And think about that. All of the homes that these folks own, they own, we own that are going to be sold, transferred, et cetera, coming up. And this started, we've still got another 15 years Alice, of that to go before the last of the boomers are through.

[00:27:50] And so think of what enormous opportunities there are out there. I know we've got a minute, I want to ask one other quick question here before the segment ends, are you doing mostly still conventional loans Guy? Are people coming back into the FHA, USDA's world? Because for a while we couldn't even give them away. So what's that going on with that?

[00:28:13] Guy Giles: Well, if I can get somebody into a conventional loan, I will all day long. I'm just, I'm not that guy that wants to get you into a loan just so I can refinance you in six months. So most of my stuff is conventional. If I can help you with your score kind of guide you, I'm not a credit repair guy, but if I can guide you a little bit and get you to where it makes more sense to do that, who knows what happens, you know, in the long run.

[00:28:36] So. You know, I want to get somebody into a loan program that could potentially be the best one for them, you know, so definitely more conventional than FHA. If somebody is a veteran and they don't have service connected disability, but they have a down payment, you know, we'll, we'll look at maybe running something other than a VA, but I do a lot of VA loans.

[00:28:59] Alice Lema: Well, thanks Guy Giles, Mutual of Omaha mortgage, one of our sponsors. We appreciate you so much. Great information. How can people reach you if they want to get ahold of you?

[00:29:10] Guy Giles: Call up (541) 944-6987.

[00:29:15] Alice Lema: Great, thanks Guy Giles Mutual Home Mortgage. We'll be right back after a quick word from our sponsors. Don't go.

[00:29:22] Well, welcome back to the real estate show folks, Alice Lema, and Pete Belcastro here. We're both your hosts on the show today. We're both brokers at John L. Scott, Southern Oregon, and we just had a really, really educational couple of minutes with Guy Giles Mutual, Omaha mortgage. And Pete it's quite fascinating that as many luxury properties closing, which is unusual for our area, there's still so many left that are just kind of hanging out there.

[00:29:51] Pete Belcastro: Yep. And we haven't really figured out why, or, or kind of what's going on a combination of things. But we, you know, we live in a pretty transient area. I think that after doing this for so many years now, I think I've come to appreciate that transientness of so many people moving. It was about 40% of the sales are from people moving here.

[00:30:12] I wonder if that's changed over the last few years since the pandemic. We still have a ton of people, new people moving in here every year Alice, people moving out. We're very transient, transient kind of place in our communities, Ashland in particular, Jacksonville. Even Medford to a large extent and you know, that's the way it is.

[00:30:31] So a lot of new people here all the time and right now we're in a funk because we've got smoke again. We've got all those issues that are not related to what we do, and it has, to have an effect on the market. We'll see what happens between now. I hope this goes away. I really do. I mean, it's awful to be out in it. Let alone trying to go out and, you know, try to show people off your community that we want to move here. I mean, you know.

[00:30:57] Alice Lema: Well, and such a high percentage of our local residents are 55 and older. In fact, before the pandemic, that was just a little bit more than half of our demographic. And now because of the pandemic we have some of these remote workers, some of the younger people bringing their remote jobs with them. But I think it's particularly hard on our elderly and some of them are being forced to make a choice about where they live. They don't want to leave, but I think they have to.

[00:31:26] Pete Belcastro: Talk to some of the senior living people trying to, you know, talk about this. Look, how many years has it been? I was trying to think, yeah. Today, how many years has it been now? Summer after summer after summer. I was going to say five, six years to me, because it did not use to be like that.

[00:31:44] Alice Lema: That's the part people don't realize.

[00:31:46] Pete Belcastro: No, we rarely, rarely would have had smoke like this. Or if it did it, it was, it was in and out quickly. But now it lingers and stays. So it's been a number of years and it's having an effect on us. I mean, look at Shakespeare again. It's to open up, you know, you open up that doors and then you get this look. All the events and rafting, all the things that we do. A lot of people don't like this, so we'll see what happens, but it hasn't affected much.

[00:32:09] I mean, to be honest with you, I think we reached that plateau. Guy is right. I agree with the things we thought we were going to see interest rates rising right now, you know, all the economic indicators showed that. Instead what have they done? They've lowered it back. A guy refinanced a thing for a client of mine 20, it was a 20 year refinance and it was a 2.6%, something like that.

[00:32:30] Alice Lema: Wow.

[00:32:32] Pete Belcastro: Way back down. So. Well your time. I think if people are serious about that is to get themselves pre-qualified or pre-approved as Guy can do and get yourself locked in, at least for the next 90 days, maybe on an interest rate because they cannot continue. I keep saying that they can't continue to do this.

[00:32:53] We all say that. They, they mystified me and that's that continues to drive so much of our market with low interest rates. It may be why luxury homes are selling too, because you can get a luxury home or on the market in those rates like that, that's pretty darn that becomes a pretty darn good buy then.

[00:33:12] Alice Lema: Well, and the piece that I think people are not letting sink in deeply enough is when we say the rates are so good, what that means is you can have a mortgage for the home of your dreams, that's really comfortable. And the price you're paying might be higher than what you're used to. It might have more zeros.

[00:33:32] It might have bigger numbers, but as soon as you go get pre-qualified, I think you're, you're just your jaw drops because you find out you can qualify for a much bigger mortgage, but your payment is still really comfortable. So then it's just about taxes.

[00:33:49] Pete Belcastro: That's what you described as why what used to be the high kind of a range for a lot of people at $350,000 jumped up and why we've seen so many sales go up four to five to $600,000 range. And that's kind of been where a lot of sales are having a lot of places on the market in that, in that range, but still, you know, for most of us we're looking at $500,000 and below and that's where again, half the sales over half the sales take place in that category. And it's only like 10% of the market.

[00:34:25] And you think I'm crazy. That's true. In that 368 homes for sale in Jackson county, Alice 45 of them only 45 of them are for sale $350,000 or less. So you see how much that changes for people, what you're looking for and why being pre-approved and all that kind of thing we talk about, because that's where a lot of the activities still takes place.

[00:34:48] That's where we're seeing the multiple offers still is in those lower price categories. There's you know, but you go higher, that's where there's more listings.

[00:34:56] Alice Lema: And, you know, what's so interesting is one of the ways we know that the market is changing, stabilizing, softening, whatever you want to call it. And Pete, I'm sure you're seeing this too, is it starts in the higher price point. We have longer days on market, and we have more, a higher number of properties available. And then it starts seeping down into the lower price points. It goes from 1.2 million to a million down to 800 and eventually we'll bleed down into the lower price points. And that is one of the things that you and I watch every week so that we can help people predict whether they're buying, selling, investing, whatever.

[00:35:33] What's going to happen next with a little bit of education, just watching how many properties are available on each price point and how it is sinking in to the next price point below it.

[00:35:46] Pete Belcastro: And that's true. And I just want to bring a rental question. You had that interview last week with a lady from Lane county.

[00:35:57] Which didn't air because the station was off here. That's right. But the question there in the rental housing with the eviction moratoriums being extended and everything now, I believe to February. What is that going to do again to the rental market and to potential investors are buying, or even building rental properties again.

[00:36:17] That is, that's a, that's a real unknown question mark right now that I don't know where that's going to go, right?

[00:36:23] Alice Lema: Yeah. My investor pool, I don't know about yours, they many of them are moving their investments out of Oregon and into other more landlord, friendly states, more tax friendly states. We do have landlords stepping in here in Oregon.

[00:36:38] But there's not enough. So when these investment properties go on the market, unless they're the really big, big you know, multiunit apartment complexes. We just don't see a lot of moms and pops like we used to have stepping in as landlords. We just, don't.

[00:36:54] Pete Belcastro: Also put pressure on property managers to deal with this type of situation, because you know, the property manager acts as the go-between between you know, the landlord and the tenant there.

[00:37:07] And they're in a real tough position with this. And yeah, you're right. It's really up in the air. Here we are Alice, where we're Midsummer we're at the top of that market and things. We're going to see what goes on in the next, between now and labor day. But there's still a lot of activity going on.

[00:37:21] It's a robust market with interest rates the way are, the only uncertain days of the weather, the smoke kinds of things like that, the COVID is still not over. So we're not out of the woods yet.

[00:37:32] Alice Lema: But questions about school are starting.

[00:37:36] Pete Belcastro: There as well, but a lot, lot going on. We'll see what we'll, if we're going to play it out each week and see what happens. But right now for real estate side it was a good week.

[00:37:45] Alice Lema: It was, and we do have a few more properties on the market every week. So thanks. Thanks everybody for listing your house. So we like to say thank you to our sponsors Guy Giles, Mutual of Omaha Mortgage, John L. Scott here in Southern Oregon and the Rogue Valley Association of Realtors.

[00:38:03] We appreciate you immensely go out and have an absolutely, fabulous Southern Oregon weekend. And we'll see you again next week. Bye now.