122224- Home Solutions with Andy Kiel.

Episode Transcript

Speaker 1 (00:03):
Good morning, and welcome to the Home Solutions Show. I'm
your host Andy Keel with the Win three team powered
by Epic Realty, and I'm joined with my co host
Jerry Sunt with Cross Country Mortgage. Yeah, good morning, Jerry.
We have a lot of news to talk about this week,

(00:24):
and a fair amount of month end and coming up
on your end statistics that want to talk about, as
well as a number of announcements, So a lot of
things to bring up in today's show. I wanted to
start this one off with something that I was pretty
excited to see. It's certainly far more impact impactful to

(00:48):
our friends up in the north in Phoenix. But I
just caught this from the Arizona Department of Revenue announcement
that just came out this week. Arizona Department of Revenue
announced the elimination of the Transaction Privileged Tax or the TPT,
applicable for the rental of real estate for residential purposes

(01:09):
as of January first, twenty twenty five. So no more
TPT tax, and that that affects our friends in Phoenix
and some of the other Arizona communities far more were
we don't we have the exemption here in Tucson, but
other communities weren't so fortunate. So I thought that was

(01:31):
certainly worthy of announcing for anyone that does have to
pay that particular tax, So that one's going away statewide
as of the first of the year.

Speaker 2 (01:41):
Great news. Anytime taxes go away, good news.

Speaker 1 (01:45):
Yeah, really that that was really just a tax that
it impacts the renters more than anything, because you know
who actually pays a tax. It is it the landlord
or is it the renter, or is it you know,
is it the business or is it the consumer? And
arguably you could probably say it's a bit of both

(02:06):
because it's just a fee that has to be paid
in and absorbed. So's that's a win across the board.
So anyway, another thing I wanted to actually talk about
a little bit and make note of is I had
a couple of announcements from the National Association of Realtors

(02:27):
or NAR. I'm not necessarily that they're biggest fan of
some of the things that they've done in recent history,
but this one I'm going to give them a really
special shout out for and they're probably tooting their own
horn a little bit, but this is a really important
topic for many of us out here with some of

(02:51):
the things that NARS is pushing for. So as we
announcement from now heading into twenty twenty five, NAR defense
Section ten thirty one or like kind exchanges Section one
ninety nine A, and other net investment initiatives. So basically,

(03:13):
the Tax Cut and Jobs Actor twenty seventeen is expiring
at the end of twenty twenty five, which is some
of the tax reforms that were given, especially to real
estate investors, that were very key. So NAR, along with
the ten thirty one coalition, successfully persuaded lawmakers that the

(03:34):
real estate portion of ten thirty one was essential. Basically,
in ten thirty one, that's where we get to effectively
do a tax deferred exchange. So if we have a
lot of depreciation that we've taken on a property, owned
it for a while, we can defer that by rolling
the proceeds into a new property. So that's what they're
referring to. The final bill repealed all but the ten

(04:00):
ten thirty one for personal property, so big win on
that front. Lawmakers initially thought ten thirty one was not
needed because they were proposing full expensing for all real
estate immediately instead of depreciating it in a world full
of expensing. They naively argued ten thirty one was redundant,

(04:22):
although we convinced them otherwise. The dynamics have changed. In
twenty seventeen, the ten thirty one debate was about how
it fits into the bigger picture of tax reform. Since then,
it's primarily about revenue. So Nara's claiming that they successfully
defended ten thirty one for more than a decade on
several fronts, and President Joe Biden's annual budget proposals and

(04:44):
Build Back Better Plan all proposed to cap or eliminate it.
So some lawmakers continue to see ten thirty one as
a pot of gold that can be used to offset
spending or tax cuts elsewhere. That's how they go on
to to talk about this. And I was taken back

(05:04):
by one little part of this article where it says
perhaps the biggest myth with ten thirty one is that
people use indefinite exchanges to avoid paying taxes. A twenty
fifteen study revealed that eighty eight percent of exchanged properties
were later disposed of through a taxable sale, and mostly
with more tax collected than if the exchange had never happened.

(05:28):
Taxes paid are nineteen percent higher when a property is
exchanged and sold versus never having been exchanged at all.
I was really kind of fascinated.

Speaker 2 (05:37):
Yeah.

Speaker 1 (05:38):
Yeah, So allowing investors a free flow of capital allows
them to buy into higher price and more productive properties,
which is entirely true. We tend to buy bigger and
it creates more tax revenue, more housing opportunities, job opportunities,
and growth. So I thought this was just kind of
a fun article to bring up. And one other little

(06:01):
line in here that I wanted to point out is
real estate makes up nearly one fifth of the entire
US economy. Keeping those sectors healthy means keeping American the
American economy healthy. So I don't know if you have
any thoughts on that.

Speaker 2 (06:19):
No, yeah, got it, Yes, of course.

Speaker 3 (06:21):
I mean, the ten thirty one exchange has been around
for such a long time, and it's a valuable and
it is just it's deferring taxes. It's not eliminating, it's deferring.
And for so many people that is the reason, one
of the main reasons why they own investment properties.

Speaker 1 (06:44):
Yeah, and that's that's really a key and that's a
very big service that that folks offer is we we
need rentals out there, and if not for the tax benefits,
that would really I don't think it eliminate the rentals,
but it's a big benefit to for folks who want

(07:05):
to provide housing where sometimes they wouldn't.

Speaker 2 (07:08):
So absolutely.

Speaker 1 (07:12):
One other article that the National Association of Realtors put
out that I wanted to talk about a little bit.
They're going into some predictions for twenty twenty five.

Speaker 3 (07:21):
Which is my favorite time of the year is because
we get to talk about predictions, and so much of
the predictions we're going to talk about on this show
and on the next arties get being ripped up for
being wrong. So the playbook again is going to be
a wait and see game, but.

Speaker 2 (07:40):
It's here. Let's hear it.

Speaker 1 (07:41):
Andy, Yeah, and we're going to talk a little bit
about some of the predictions. They're already revising with mortgage
rates coming up too, so some of the highlights. Again,
this is an article put out by our National Association
Association of Realtors. The South region holds with four to
ten four of the top ten housing spots, so they're

(08:03):
looking at where the best the top ten housing spots
are going to be in twenty twenty five. They're also
predicting that mortgage rates will stabilize near six percent in
twenty twenty five. I'm wondering if this article was written. Actually,
I do know it was written a few days before

(08:24):
we had our big announcement and market shake up this
week in interest rates. But we'll get to that in
a moment. And then nar Project's four point five million
existing home sales and a four hundred and ten thousand,
seven hundred dollars median existing home price in twenty twenty five,

(08:44):
so comparing that to Tucson, that's a little bit above
where we are currently. I'll get to that in a
moment too. Yeah, this article was December twelfth. It came
out National Association of Realtors today announced the ten hot
spots for twenty two twenty five, and they didn't rank
them other than just in alphabetical order. But I'll read

(09:06):
these off pretty quickly, and I think the highlight is,
of course, our neighbors to the north Phoenix. They tend
to eliminate some of the smaller metros like a Tucson
from these calculations. I don't know the full criteria they used.
If we were just too small to compare or not,
but Phoenix was certainly on the list. San Antonio, Texas, Knoxville, Tennessee,

(09:33):
Kansas City, Missouri, Indianapolis, Indiana, Hartford, Connecticut, Greenville, Anderson, South Carolina,
which I'm not particularly familiar with that that metro area
Grand Rapids, Michigan. I think that was one of the
number one spots for twenty twenty four, and then Charlotte,

(09:55):
North Carolina, and finally Boston, Massachusetts, and also a section
of New Hampshire they're including into that mix. So that's
where the National Association of Realtors is predicting the the
hotspots and the growth areas to be in twenty twenty five.

(10:16):
So they're also predicting that our growth rate is going
to be a little bit slower, about two percent, reaching
that four hundred and ten seven hundred meeting existing home
price for twenty twenty five. So they were looking at
a number of things, how many homeowners, mortgage current mortgage

(10:41):
rage rates, which I'm certainly not aware of one area
of the country having any advantage over another there, but
pricing of course is key. And then yeah, but they
also used the share of millennial renters who can afford
to buy a home, net migration of households, reaching home

(11:01):
buying age. So there are several factors that they included
in there. But I'm always fascinated with these predictions because
having been in the world of data in the past,
I've learned that oftentimes, when you have access to a
lot of data, you can you can slice it and
dice it in so many different ways to almost tell
the story you want to tell.

Speaker 2 (11:20):
M Agree.

Speaker 3 (11:23):
Well, you know, they say the number one thing the
methodology for housing hotspots, one of the key elements is
the locked in effect. So many people are locked into
their homes. You know, we've talked about this before, that
the the there have been number of studies all showing
that to unfreeze the housing market is going to take

(11:43):
rates getting to five percent between five and five and
a half, and which we'll talk about more in the
second half. But that's looking less likely all the time.
You know, just a couple months ago, we kind of
thought we'd be there by the first or second quarter
of twenty twenty five, and now we're starting to hear
a lot of predictions that the average is going to

(12:05):
be somewhere around six and a half for next year.

Speaker 1 (12:08):
Yeah, we might not be getting quite the relief we
were hoping for, but we'll get to that in the
next segment. So with that, we are coming up on
a break. This is Andy Keel with the Home Solutions
Show on K and ST and we will be right back. Hi,
and welcome back to the show. This is Andy Keel
with the Home Solutions Show on K and ST and

(12:29):
I am with the Win three team powered by Epic Realty.
You can reach me at five two zero five three
nine nine five nine one, and of course I am
joined again by Jerry Sunt with Cross Country Mortgage and Jerry,
if you'd like to share your number and then we
can talk a little bit about what rates are doing

(12:50):
this week.

Speaker 3 (12:51):
Absolutely, my phone number is five two oh three seven
zero nine five seven six. And you know, I love
this time of year because all the predictions for not
just you know, housing prices, volume, mortgage rates, stock market,
all the predictions. Everyone loves to give a prediction and

(13:12):
you know what we'll see. It's a lot of times
it's very difficult because there's so many different variables that
go into the complications of the economy, which to turn
around and guess where mortgage rates are going to be
next year is very is again, it's nearly impossible. And

(13:34):
I go back to this time last year, you know,
December of twenty twenty three, we were the most of
the analysts, economists on Wall Street were all predicting, the
big banks thought that rates would be at six percent
for most of twenty twenty four.

Speaker 2 (13:55):
Most, I would say most, if not all, were wrong.

Speaker 3 (13:58):
And we spent most of the year at seven percent.

Speaker 2 (14:01):
And why is that?

Speaker 3 (14:03):
And it's all due to one word, inflation, And inflation
just turned out to be a lot more difficult to
rein in than what was expected.

Speaker 2 (14:13):
Well, so there's an.

Speaker 3 (14:14):
Article that just came out yesterday that by Housing Wire,
and I love the title. All those twenty twenty five
mortgage rate forecasts are now wrong, that's the title, And
it's due to what happened this week. So the Federal
Reserve met this week and they cut the Fed funds
rate a quarter of a percent, as predicted. Now a

(14:35):
lot of times and I get a lot of phone
calls whenever the Fed raises or cuts rates, is how
does that affect mortgage rates? And it doesn't really directly
affect mortgage rates. So if you're a bank and you
want to borrow money from the federal government.

Speaker 2 (14:47):
That's the rate you're going to pay.

Speaker 3 (14:50):
So that's the Fed funds rate, and prime rate is
three points above that. So if you're a borrower looking
to do a consumer loan or whether your business and
business loan, and you go to your banker and they say, well,
prime rate is going to be x, well, now that
prime rate is basically seven and a half percent because

(15:10):
Fed fed rate is going to be about four and
a half, So that's seven and a half percent is
and then everything is keyed off of that. Equity lines
of credit, business loans, credit cards, car loans, that all
comes off of the Fed funds rate. Mortgage rates are
a totally different animal as they are traded off of

(15:31):
what's called mortgage backed securities, which is a commodity that's
bought and sold. Not unlike you know, apple stock is
bought and sold every day. The price of oil is
bought and sold every year, every day.

Speaker 2 (15:44):
That's what the.

Speaker 3 (15:46):
Mortgage backed securities. They're similar to US treasuries and especially
the tenure bond or the tenure yield. So why did
the market, why did the Dow drop a thousand points
on Wednesday, And why I did mortgage rates shoot up
back above seven percent, Well, it's because of what the

(16:07):
Chairman Power, what the Federal Reserve came out and made
their announcement. They came out much more hawkish than what
was expected a week ago. It was predicted that the
FED would cut rates four times in twenty twenty five.
Now they changed their announcement and said they predict that
they're only going to cut rates twice in twenty twenty five,
by fifty basis points. Well, the stock market and did

(16:31):
not like that. Wall Street did not like that, and
that's why you saw the big drop in all asset classes.
Basically was due to this announcement that the Fed's going
to drop rates by fifty basis points next year. Well,
so with that comes now that's why this article says
all the rate forecasts are now wrong because just about

(16:52):
every lender or economists we're predicting lower mortgage rates, me
included for that matter, I've been on the camp the
rates we're going to get down to five and a
half percent in twenty twenty five. Well, now everyone's changing
their forecasts. The basic predictions is that the high for

(17:12):
twenty twenty five is going to be right around seven percent,
probably right where we are right now, but that the
low is going to be six percent, so dipping into
the fives. Although there are some agencies or some economists
or companies that are predicting rates will get into high fives,
most are now predicting that it's going.

Speaker 2 (17:32):
To be in the mid to low sixes.

Speaker 3 (17:34):
That is, again, a very different outlook from what we
just saw a month ago. Now, again, opinions, that's all
forecasts are just opinions. Rates could go to five percent,
they may not move at all. Who knows, you know,
it all depends on inflation. And until inflation really starts
getting down to the the two percent level, we are

(17:57):
not going to see mortgage rates drac dramatically.

Speaker 1 (18:00):
Yeah, that was a bit of a surprise this week
and it really shook the market. So, yeah, the opinions
don't matter unless you're on the Board of Governors of
the Federal Reserve. Their opinions, their opinions do. But I'm
just fascinated that we started going into the fall months
with a Fed funds rate of five point twenty five,

(18:21):
and I believe we were looking at mortgage rates back
then averaging probably about six and a quarter yep. And
then fast forward, we've we had a half a percent
Fed funds cut followed by a quarter followed by another
quarter just last week. So I believe we're sitting now
at four point twenty five, which, as you mentioned, Jerry,
that's great because prime is calculated from that. So if

(18:44):
you have a he lock, it's helpful. If you have
certain other loan products that are tied to prime, that
that's a bit of a win. But ironically, even though
the Fed funds rate is lowered to full percent, as
you mentioned, our mortgage rates are actually up roughly three
quarters to one percent. So the Fed actually lowered rates,
but mortgage rates have actually gone up nearly the same

(19:07):
amount that it was lowered by.

Speaker 3 (19:09):
So and I think you know this, it's such always
there's so much miss misinformation, and part of it is timing.
I you know, I get calls every day from people
who get mailers or they get an email that said, oh,
mortgage rates have dropped. They're like, oh, should Then they
call me and say should I refinances mortgage rates are dropped, Like, well, no,

(19:29):
mortgage rates actually have gone up? Well no, this document
I just got in the mail said, mortgage rates dropped.
I'm like, well, when was it dated?

Speaker 2 (19:36):
Well, it was dated in September first. Okay. They things
move around.

Speaker 3 (19:41):
And it's it's hard to, uh to give you know,
accurate information because again, I mortgage rates are doc is
a commodity that's bought and sold every day, so rates
can move around.

Speaker 2 (19:54):
Now, in normal years.

Speaker 3 (19:56):
There's not a lot of volatility. Mortgage rates are pretty boring.
They just kind of they don't move much.

Speaker 2 (20:02):
These past couple of years, they have moved a lot.

Speaker 3 (20:06):
The good news is, I think we're going to see
more stability in twenty twenty five, probably after the first
quarter of next year. That and rates should be again
expected they'll be in the mid sixes, which is a
great rate. Possibly there'll be times we get into six percent,
so there is going to be some refinance opportunities. But
the fact that the thought they're going down to the fives,

(20:29):
I think is probably going to have to wait another
year because I don't know if it'll happen in twenty
twenty five.

Speaker 1 (20:34):
Yeah, that's certainly what it's looking like. But you know,
we certainly could have some surprises if inflation somehow comes
a little bit more under control, which I tend to
probably not think is going to happen. But the other
end of the dual mandate that the FED has that
may actually help us, as if we get a surprise
and the unemployment numbers that might get.

Speaker 2 (20:55):
Us, it goes up relief.

Speaker 1 (20:56):
Yeah, and which is really weird because we're almost rooting
for bad news to get better rates.

Speaker 2 (21:02):
No, no, no, I tell people that all the time.

Speaker 3 (21:04):
Andy, you know, bad news for the economy is good
news for mortgage rates.

Speaker 1 (21:09):
Yeah, So the better the news, the worst things are
for the mortgage rates. So I wanted to move on
with yet another national association of realtors. This is more
a data report that I was able to find that
they just released recently, and they're looking at some predictions
again for twenty twenty five, but they're going into a

(21:33):
lot of recent data that they put out for a
year end twenty twenty four. I'm just going to throw
out a few key highlights here that I thought were interesting. So,
the household equity in US real estate right now just
topped twenty or thirty five thirty five trillion with a
t trillion dollars. I was really blown away by this

(21:54):
next one that I'm looking at here is the media
net worth between owners and renters, and they're saying the
estimated net worth of a renter in twenty twenty four,
and again this is coming from NAR was ten thousand
dollars versus a homeowner which had a median net worth
of four hundred and fifteen thousand dollars. I was just

(22:15):
completely blown away by that, just massive difference between a
net worth number between a homeowner a renter. And I'm wondering,
I know how much of that is the real estate
equity that that's built into the equation, but.

Speaker 3 (22:31):
Well, and you know that that goes into for lower
mortgage rates. In this new administration, I know that they're
going to have an eye on that, like, how do
how do people tap into the equity that they have,
because you know, people have more more wealth in their
homes than they've ever had in history. People could tap

(22:54):
into that, man, oh man, what could that do for
the economy? How do you do it with where you know,
you've got an equity line of credit, which I think
the average rate on an equity line now is about
eight and a half percent, maybe eight, but it's still
a high number.

Speaker 2 (23:09):
And if you're sitting at a.

Speaker 3 (23:10):
Two and a half or three percent mortgage rate, Why
in the world would you want to refinance to seven?
Hopefully they get down to six. If we can get
rates down, man, there's a lot of untapped upquity that
could just make the economy explode.

Speaker 1 (23:25):
Yeah, no doubt about that. One last item in here
that I wanted to note before the break is seriously
delinquent mortgages, which means over ninety days late in foreclosure.
Is actually almost at a historic low. We're a fair
bit I can't quite read the number on this chart
that I'm actually looking at, but we're still below two percent.

(23:46):
There's still a lot of I think misinformation out there
too about oh, the foreclosures are coming and we're so delinquent,
and historically speaking, we're still pretty darn close to a
historic all time low. The only time we've been this
low before below two percent was for a brief spell

(24:06):
before COVID, and then again if we look back historically
around two thousand and before the crisis hit in two
thousand started occurring in two thousand and five two thousand
and six, we were below that two percent delinquency right
and then at the height I might add we were
almost at ten percent delinquency when we were at the
height of the problem in twenty ten or so. We

(24:29):
will talk more about this in just a moment. We'll
be taking a quick break. This is Andy Keel with
the Home Solutions Show, and we'll be right back. Hi,
and welcome back. This is Andy Keel with the Home
Solutions Show, and I am joined by Jerry sent with
Cross Country Mortgage. I have a couple of announcements that

(24:49):
I wanted to just make mention before we talk a
little bit more about some of the local and regional
market statistics and predictions for next year. I wanted to
just make note of a couple of guests that we
are going to have on upcoming shows coming up over
the next few weeks. I'm actually incredibly proud to announce

(25:11):
that we will be doing an interview with Sharon Lecter.
And for those of you that do not know who
Sharon Lecter is, you may know her from the franchise
Rich Dad, Poor Dad, cash Flow Quadrant. She was the
co author of the entire series of books with Robert Kiyosaki,

(25:32):
and then she's also very closely affiliated with the Napoleon
Hill Foundation. And a number of other key books that
were put out Three Feet from Gold. She helped bring
the sequel to Think and Grow Rich, which is Outwitting
the Devil. That was many years after Napoleon Hill's passing,

(25:53):
So we'll talk about that in an upcoming show. And
I'm very, very proud to have Sharon be part of
the show coming up over the next couple of weeks
as well, I have a couple of other special guests,
including a Disney princess, so that'll be kind of fun.
But actually I'll be interviewing a lady by the name
of Danny Burley. She actually is a Disney princess works

(26:17):
at Disneyland in California, and the reason we're going to
have her on the show is she is the daughter
of another mentor of mine. I have two folks that
I just give an incredible amount of I don't even
know the right word. I'm just incredibly grateful to have known,
Bob Zachmeyer being one of them. And the other one
is a gentleman by the name of John Burley, and

(26:39):
this is John's daughter, Danny. And what I'm really interested
in talking about is generational wealth, what it's like growing
up in a wealthy family and some of the difficulties
that actually come from that and how it's handled. So
I think that'll be kind of an interesting interview. And
then following week we'll have her dad, John Burley on

(27:02):
the show and that'll be a fun interview as well.
So looking forward to some fun guests coming up. I
wanted to share my personal email with the audience if
anyone has any feedback or ideas for future show topics.
I'm very open to hearing what you have to say,
and my personal email is Andy A N. D y
keel k I E L at the Win three team

(27:26):
dot com. That's the win w I N the Number
three Team t e a M dot com. So feel
free to reach out with any questions or ideas or
whatever you have for the show coming up. With that,
I would like to talk start talking a little bit
about some of our local market statistics as we close

(27:48):
out November and get towards year end here, so not
too terribly surprising for November. I just pulled some some
data again and as of as of December, we now
have a total of four thousand, ninety one active listings
throughout the Greater two Sound area. That's actually down a

(28:10):
little bit from last month. So as of November first,
we had four thousand, one hundred and forty four active listings.
We're down to four thousand, ninety one as of this
data was current as of December twentieth, and single family
homes were at three thousand, two hundred and forty three listings,
which is down a little bit from last month. And

(28:32):
then we get into the different price ranges. Up to
two hundred and fifty thousand, we have sixty seven active listings.
I'm a little surprised by this. Up to three hundred thousand,
it jumps to three hundred and twenty four, So we
have a pretty robust market up to that three hundred
thousand number, and then we go up to four hundred,

(28:53):
it really jumps to one thousand, five hundred and fourteen available,
and then up to a million, we have twenty nine
hundred and fifty six available homes. And then there's actually
two hundred and ninety two homes available that are over
a million dollars in the current market, So pretty much
across the board we have more inventory available, which is

(29:13):
great if you're a buyer. What did we do as
far as sales go. I pulled this data as of
the first of December for the sales so we could
get a month over month comparison here. So we had
nine hundred and eighty nine sales in November of twenty
twenty four. Of those eight hundred and four were single

(29:34):
family homes, So we had eight hundred and four single
families that have sold in the month of November up
to two hundred and fifty thousand, forty four sales, up
to three hundred thousand, one hundred and thirty nine sales
up to four hundred thousand. Again we get a bit
of a jump here, four hundred and thirty two sales
all under four hundred thousand, and then up to a

(29:56):
million dollars is seven hundred and seventy two sales and
over a million there were thirty four sales. The over
a million market is is actually slowing down a little bit,
and for many many months there. We talked about this
before on the show too. It's I find it very
fascinating that over a million dollars was almost its own market.

(30:17):
It was they were selling better than anything between half
a million and a million dollars now.

Speaker 3 (30:24):
And I think part of that was just because the
stock market had been on such a run. You know,
it's been an amazing years and people take money out
of the stock market and diversify it.

Speaker 1 (30:34):
Yeah, so across the board, we year over year were
actually up quite a bit. We're up. We have twenty
percent more sales year over year in December of twenty
i'm sorry, November of twenty four than we did November
of twenty three. So for the gloom and doom naysayers
out there, we still have a pretty darn robust market.

(30:57):
I don't really see any kind of big indicator that
we're going to have any kind of massive problems out there.

Speaker 3 (31:04):
So now it's great and seasonally we're just you know,
this is going to be the slowest time of the year,
and I think you always have to keep.

Speaker 2 (31:11):
That in mind.

Speaker 1 (31:12):
Yeah, especially going into the Christmas New Year's holiday, things
really just fall off a cliff these last couple of
weeks of the year, with the exception of a little
bit of year end tax buying, and then of course
the spring season, as we like to say that tends
to kick off at around Super Bowl Sunday. So a

(31:32):
little more data to bring up here. So this is
actually for data now I'm getting from the multiple listing
service of southern Arizona or the Greater Tucson area. I
find this interesting. They're still saying it's a seller's market.
I don't know that I necessarily agree with that. According
to the market trends, they're saying, we have three point

(31:55):
one one months of inventory, which is down thirteen point
eight for eight five percent month over month, which I
would tend to agree. Three months of inventory, it tends
to be a little bit on the side of a
seller's market. Balance market tends to be about four to
five months of inventory, and a buyer's market tends to
be if we get over about about six months of inventory.

(32:18):
It doesn't feel like a seller's market to me.

Speaker 2 (32:21):
Right now.

Speaker 1 (32:24):
The list of sold prices shockingly a little higher than
I would expect too. They're saying it's ninety seven point
seven percent, So that means if you list your house
for a million dollars, maybe that's a bad example, but
to use easy numbers, that means the average sale would
be nine hundred and seventy seven thousand dollars on that
million dollar listing. And then they're saying the median days

(32:48):
on the market is fifty one, So that's.

Speaker 3 (32:50):
I mean that has increased andy that that used to
be thirty you know, twenty eight thirty not too long ago.
So fifty one days is things are sitting on the
market a little longer than they used to be.

Speaker 1 (33:03):
Yeah, and that's starting to approach normal. But again, if
we go back to pre COVID days, it was I
think normal was around ninety. So I see where they're
saying it's a seller's market, because the data suggests that
we still are. But it just it doesn't really feel
that way to me. It still feels to me like
it's maybe we're just so used to the craziness before

(33:25):
that when we have some inventory comparatively speaking to the
lack of inventory in say twenty twenty one and twenty two,
that we finally have some choices. But the median sold
price for Tucson is up four point four six percent
month over month, or three hundred and fifty eight thousand dollars.

(33:45):
Then that doesn't necessarily mean that the home prices are
going up four point four six percent. It just means
that the buyers are tending to buy in a little
bit higher price range. But I think that's kind of
an interesting number earlier in our I think made mention
of about four hundred and ten thousand is their prediction
for the national average next year.

Speaker 3 (34:06):
Ye, and let's go back to scroll down and let's
look at the units, how many units? Because they're the
map that they use is a much larger map than
what you know, you and Bob have always analyzed, and
their map is a much wider it's a wider net.
And so it's saying, I think a little over one

(34:27):
thousand units sold last month.

Speaker 1 (34:30):
Yeah, they use they use the entire MLS for their
data set, and I try to keep it a little
bit more tight around the Tucson market because with our
MLS we we go pretty far and wide, and I'm
trying to get something a little bit more attuned to
specifically for Pima County and Tucson. So new listings a

(34:55):
little bit more, a little bit more data than I pulled,
but pretty similar, saying it's one thousand and thirty new properties.
The median price per square foot, I think this is
a pretty important number is two hundred and two hundred
and thirty dollars per square foot. So that's a pretty

(35:17):
good rule of thumb.

Speaker 2 (35:18):
Is you know.

Speaker 1 (35:19):
What, what do we look at for price per square foot? Well,
the median for Tucson is two hundred and thirty dollars
as of November, and then the median living area square footage.
I think this is kind of interesting too. The median
square footage of the house housing is seventeen hundred and fifteen,
so I think this is another good gauge. Looking at

(35:42):
pending listings, we have eight hundred and seven properties pending
and this is again all all of the Greater Tucson
MLS median days on the market forty four median dollars
per square foot to twenty five, and the total volume

(36:04):
of sales for pending listings. I actually am rather fascinated
by this number. It's they're saying it's up fifty seven
point five percent month over month, which I'm kind of
scratching my head and I'm looking at this and going,
how is that even possible? But they're saying our total
pending volume right now is three hundred and fifty five
million dollars of pending transactions, So I guess that would

(36:26):
be a good sign if it's if it holds true.
So we are coming up on a break I'm going
to go into a little bit more of this data
coming up on the next segment, and we'll be back
just after these messages. Hi, and welcome back to the show.
This is Andy Keel with the Win three team powered

(36:49):
by Epic Realty, and I'm joined again with Jerry Sunt
Cross Country Mortgage. And in the previous segment we were
talking a lot about markets to tistics in Tucson and
the greater Pima County area. We'll get into that again
a little continue with that again in just a moment,
I wanted to just another quick announcement. We have a

(37:11):
just a wonderful property that we just listed last week
that I wanted to tell the audience about. It's a
property on the east side of town at eighteen ten
North Heather Bray. It's kind of a special property because
it's listed, in my opinion, very appropriately considering it was
a rental for a number of years. It's in good condition,

(37:34):
certainly livable, but it needs some It's it's plain and simple,
so it would need some just some nice finishing touches
to make it really shine and be a nice home.
But again located at eighteen ten North Heather Bray, we
have that for three hundred and fifty thousand. It is
just shy of two thousand square feet a three bedroom,

(37:56):
two bath, and that's basically over by Tanka Verdet and
Sabino Canyon in the eight five seven one five. So
if anyone's interested in a home over there that I
think is a very appropriate price, feel free to reach
out to me Andy at five two zero five three
nine nine five nine one. Getting back into some of

(38:18):
the market data, going back to the MLS and the
sold information, we have some sold listings that for November
twenty twenty four, with the median sold price is three
hundred and fifty eight thousand dollars, which is up four
point five percent month over month, with six hundred and

(38:41):
eighteen properties that have closed, which is actually down sixteen
point nine percent month over month. So I thought that
was a little bit interesting as well.

Speaker 3 (38:53):
That is interesting, yes.

Speaker 1 (38:54):
Yeah, because it almost conflicts with the data I talked
about earlier when I drew that big square around and
to effectively Pema County for the most part, where it
looked a little bit more promising. So it sounds like
the rural properties that are out or anything out of
Pema County isn't quite selling as much as how I
take that data to be. And then the average list

(39:16):
sales price is ninety seven point six nine percent, so
that pretty much in line with what we were talking
about for and then go on to what I still
think is the true crystal ball of what is the
market going to do, and that's the that's what we
call the absorption rate or the month's supply of inventory.

(39:37):
So we have currently three point one one month's supply
of inventory, which I'm looking at a chart that's actually
down pretty substantially from from last month, so October it
actually dropped. I think there's a bit of seasonality to that.
But again we as we're under four months supply that

(39:58):
that is historically more of a seller's market, and it
still doesn't quite feel that way to me.

Speaker 3 (40:05):
So I think it's because that's changing, Andy, you know,
I mean, I think we're we've been is it a
buyer's market, sellers market, or a balance market? And I
think we've been in a balance market for quite some time.
You know, things are sitting on the market longer than
they used to be. Uh, it's not that there, It
is not typical to have you know, three offers on

(40:25):
one home and one day, of course fits priced well
and it's a great, great buy, then of course that
will happen. But you know, a lot of homes are
sitting a lot longer than they used to. So I
think we've just moved over to a balance market, and
a lot of buyers are asking for concessions and sellers
are giving them to them. And you know, and again,

(40:46):
as we've talked about many times, that is maybe a
window of that's kind of a window of time that
may change come the spring, because at that time we
will be back in a buyer's market.

Speaker 1 (41:00):
Yeah, I'm almost starting to feel like maybe three months
supply is kind of the new normal for a balance market,
because you know, what is normal almost have to go
back to pre twenty twenty to get the old baseline.
So I think that a lot of the statistics and
data will probably be changing. I don't know that we're

(41:23):
going to be seeing a big glut of inventory. We
still have a housing shortage in this country, and I
mean not just not just this state or city, it's
across the board. I think it'll be interesting to see,
you know, what comes of that over the next number
of years. Yeah, absolutely, a little bit more random. But

(41:45):
we've talked about this a number of times on the show,
some of the year end incentives that the builders are offering.
I just ran across one that was emailed over to
me from d R. Horton, which I was pretty taken
back by this. They're offering a incentive program. It's it's

(42:08):
a three two one by down program where they actually
start your interest right off at one point nine nine
percent and then it goes to two point nine nine,
three point nine nine and it tops out at four
point nine nine incredible. So there's some some pretty amazing
deals out there from builders, and we can certainly help
with with those types of programs. If you're interested in

(42:31):
looking at new construction, feel free to reach out. We're
more than happy to help the builders pay us direct.
There's no fee that we would charge to you if
you're looking for new construction, and we can help there
as well. But there's you know, if if we're looking
for some opportunities out there to get in with the
great payment, and what better way to do that with

(42:52):
a one point nine nine percent intro rate.

Speaker 3 (42:56):
Well, and it's funny, Bob had a client last just
a few months ago. And that was the builder and
I'm not going to say the name, but was pushing
for financing and a buyer was putting down I don't know,
twenty thirty percent and then said, you know, I think
I'm just going to pay cash. And they got the property.
They when they announced that they were paying cash, they

(43:17):
got the property for like fifty thousand dollars less than
if they were to a finance. So clearly the financing
incentives that the builders give is it money found on
a tree.

Speaker 2 (43:32):
It goes to the sales price.

Speaker 3 (43:34):
So that is something to be aware of because there
is a premium paid for that.

Speaker 1 (43:40):
Yeah, that is definitely true. I mean, buying these interest
rates down doesn't just isn't done out of the grace
of the builder. It's referred to as buying them down
because that's exactly what you're doing. You're buying them down.
The money comes from somewhere.

Speaker 2 (43:54):
Yeah, So I'd just.

Speaker 1 (43:56):
Like to just kind of close up with a little
bit more data. I went onto the Federal Reserve Economic
Data side or FRED and just did a little bit
of searching for Tucson, just for just for some additional
fun numbers of you know what, what are some of
our other statistics out there. And I was a little

(44:20):
surprised by not really not too terribly surprised, but according
to Fred, what is the person per capita personal income
for Tucson, Arizona, And.

Speaker 2 (44:31):
As of.

Speaker 1 (44:33):
The end of twenty twenty three, they have this as
fifty eight and thirty two dollars. Well, you see a
lot of probably a lot of income statements that tend
to jive with what you.

Speaker 2 (44:49):
Would very much.

Speaker 3 (44:50):
Again, I would say that's the average income in Tucson.

Speaker 1 (44:54):
Yeah. And then again according to Fred, the resident population
in Tucson Eras Zona, as of the end of twenty
twenty three, a million, sixty three thousand people live in
the greater Tucson area. Again, according to Fred, total gross
domestic product for Tucson sixty two million. And here's something

(45:18):
a little bit more current.

Speaker 2 (45:20):
Housing.

Speaker 1 (45:21):
Look at the data one other way housing inventory active
listing count in Tucson, Arizona as of November twenty twenty four.
Again this is coming from FRED, so it's a little
different data source three five hundred and twenty six active
listings at the end of November. It seems about in
line with the other data we were looking at MM

(45:45):
and then the All Transaction House Price Index three hundred
and eighty point zero eight. I'm trying to get a
baseline for what does that exactly mean here? Yeah, not
quite sure what that what that is in reference to,
but it's the highest it's ever been. I can see
that just looking at this particular chick. So anyway, a

(46:09):
lot of day to hear this week, So any thoughts
in closing, Jerry, No.

Speaker 3 (46:15):
You know, it's been a I think twenty twenty four
in when we look back on it is you know,
it was a good year for real estate. It was
a really great year for valuations, the number of transactions,
and the market moved a lot more fluidly than it
did in twenty twenty three. And I think twenty twenty

(46:35):
three was just a shock value that the era of
free money was over right, you know. I think so
many people were waiting for in twenty twenty two where
rates went from two to seven, it's, oh, it'll come
back down, and I think people, we a lot of
us held out hope that that would be the case.
And I think now we're starting to realize that this

(46:57):
is the new normal and that rates aren't going to
be you know, three percent anytime soon, and we may
not see that again in our lifetimes. So I think
that adjustment, you know, the more and more the consensus
I hear, rates are going to settle down in twenty
twenty five close to six percent, which is almost one
percent lower than where we are now, which does add

(47:20):
a lot of buying power, and there will be an
opportunity to get in the fives. It just will be
a while, you know, it's probably going to be in
the twenty twenty six or possibly twenty twenty seven. But
I think if rates get down to six percent, that
is just going to make the market move more consistently

(47:41):
and evenly and back to the way it is. And
so I think twenty nine five is going to be
an amazing year for real estate. There was a big
surprise bump on the road here the end of the
year with rates spiking up again, but again this will
be short term and I think by February rates will
be right back down.

Speaker 1 (47:59):
I certainly hope you're right on that account. So uh,
with that, we are coming up on the end of
the show. Thanks so much for joining us on your
Sunday morning, and again this is Andy Keel and Jerry
sunt with uh Andy with Win three team, Jerry sent
with Cross Country Mortgage And this is the Home Solutions
Show on K and ST. Hope you tune in next Sunday.

(48:21):
Thanks for joining us.