Outlook 2020

welcome to prescott outlook 2020 my name is randall bro that’s me in the bottom right hand corner i’m with the lovely prescott pickle lady diane hello diane hello that is me in the left hand corner yeah you got the whole left-hand side i do have the whole left-hand side i just get a corner that’s right but we’re here today to talk to you about the outlook for prescott for 2020. yeah people wondering what the year’s gonna bring and some apprehension and as we say there is fear in paradise paradise being prescott of course it is which it is yeah absolutely this is our courthouse uh still have some uh some lights up for the holidays uh this town has experienced a once per generation setback and uh people compare the the setback of 2008 to the great depression of the 30s uh really it was go it could have been a lot worse than it was but even still it was the worst financial setback uh economic sec setback that uh we have experienced purge and in a generation yeah uh and so people are fearful you know the times right hopefully so people are getting older and they want to retire yeah once you once you’ve experienced that you don’t want to experience it again absolutely not and people believe in cycles i guess there are cycles and it’s just times have been good and good for a while so they’re waiting for the shoe to drop that’s right yeah nobody knows the future but some things to share with you about why today’s hot market is different than the market of 2008. looking back on 2008 the rise in property values in that era was driven largely by loose credit 100 yeah no rules no regulations um hey you got a job making 30 000 guess what you still qualify for 700 000 house with no money down yeah i mean if you look back at the history of it it was a little out of control it was out of control everybody could get a home that truly didn’t really qualify and once they lost their job there goes the 700 000 right even before they lost their job no ability to pay but they would still uh still lend the money uh that is no longer the case after the fiasco of 2008 a lot of new rules and regulations and i could tell you i mean we deal with clients all the time though interest rates may be low but that does not mean you are going to get a loan no it doesn’t it’s very very strict even if you’ve got a huge chunk of money to put down still doesn’t matter if you don’t have proof of income yeah and a way if you’re retired and you don’t have proof of income or a way to show that i can pay this note might not happen for you yeah it’s they’ve gotten much tighter much stricter yeah um so the people who are buying all these homes they have every ability to pay right so if you qualify yeah then you are really uh a good risk so to speak absolutely it’s not like 2008 no the other bad thing about 2008 were what they bundled these mortgages into these obscure securities and i don’t remember all the terminology but basically people were investing in these mortgages by really even knowing what they were and that’s all gone they don’t have any of that tom fooler anymore the tom fooler yeah good word mortgages are straight they are straight mortgages they’re single mortgages there’s nothing complicated about them if a company or an investor or whoever is investing in a mortgage you know who it is it’s not all bundled together you can get jumbo and you can do balloon but it’s going to be a whole lot stricter for you to qualify for that and easier to understand easier to understand it’s a lot more straightforward yeah and um none of these weirdo products that can get you in something that you maybe truly can’t afford now people have got here real estate speculation people are doing some flipping there’s a little bit of that going on in prescott not very much uh people are not buying homes here to speculate uh or or doing a whole lot of investment most of the people that we see most of the people around in prescott they’re buying primary homes they’re not buying vacation homes as much as they’re just retiring and they’re buying their homes here to retire that’s what’s driving the market yeah they’re done with you know they they’ve kind of gone through that phase of life where maybe they had their their beachfront condo and then a couple of different houses throughout the united states um the curve now is people are in there you know approaching their 70s they’re like you know what it’s time to just settle down in one nice final home and they’re kind of looking for their last their last big purchase that what’s nice about that is if the economy slows down people will sell investment properties they will sell vacation homes those become extravagances they can no longer afford you know what they won’t sell their primary residence that they’re retired in they’re going to hold on to that hold on to that they will divest of everything else yeah that would be the last thing necessary but your primary home and especially once you move here you’re not going to want to you know leave your house believe me yeah i love it here yeah so uh so very solid and uh back in the 2000s a lot of overbuilding inventories were very high we’re not seeing that at all in fact inventories are quite low yeah inventory is very low yeah and we’ve got some lots of people coming in yes and we’re really trying to find some some good places for them yes um because prescott is taking off holding its value yeah and uh booming yeah so we have here three reasons to be optimistic about prescott arizona long into the future and the first one is the baby boom so uh back in 2008 10 12 years ago this is what the baby boomers look like the youngest of us were 43 not even thinking about retiring still changing diapers uh the oldest of us were 63 and just hitting the point where they were retiring so you had this big lump of people that were uh that were coming up and so that’s what it looked like and the ones at 63 were like well hell now i can’t retire yeah they were thinking about retiring when the bus they couldn’t retire which was kind of sad yeah it was very sad very hard because they’re all looking forward to the future yeah so they got delayed now here are the ages now the youngest of us are 55 that would be randall i’m actually 56 56 but i’m not in the baby boom i mean i miss that he’s he’s on the very edge you’re like a gen x or or something i don’t know what i am but you are i’m not i’m i’m not a part of the baby boom but mr brew is i’m a boomer that’s me yeah the oldest of us uh are 75 and uh as diane mentioned a lot of the 75ers they couldn’t retire when they hit 65 because of the bust so they are in the process now of retirement we get people in their 70s all the time that are coming to press get to finally to retire they’re like right i kind of regrouped i remade some of my money i lost yeah and now i can finally do this yes yes and given that prescott is always a top-ranked retirement destination and given that there’s going to be a lot of retiring going on in the next 10 years uh this is huge for us huge huge demand for prescott and it will not change nope nothing other than a nuclear disaster that just kills everybody i mean you know this is not going to change very dramatically very grim i know but here’s the thing is that you’ve still got the people 55 on that tail end who are steadily aging yeah um they’re not going to go away you’ve still got baby boomers coming up that are still actively working and getting ready to uh you know looking forward to retiring yeah absolutely and and the thing is the economics or you know the the politics nothing is going to change that you’re going to have millions of people over the next 10 years who are going to retire correct and we will be a top-ranked retirement destination well that’s good we already are and we will continue to be correct next big thing is california the big california exodus let me tell you something the california dream is now a nightmare and people are leaving in droves particularly retirement hp especially yeah they just can’t afford it anymore it’s um it’s become a problem because a lot of born and bred californians are realizing hell i had a really good nest egg yeah and i’m projecting out because you know obviously our um uh nest is starting to look like well i mean what is our standard of you people are living to be 80 now or 78 or 79 yeah and they’re looking for and they’re like i don’t think my nest egg is going to last me yeah especially if i have to go have nursing care or you know go into a nursing facility or something like that so there’s a little bit of panic because you think wow i’ve worked so hard right i built this huge nest egg i should be set for life and then they’re realizing left and right and right and left they’re getting hit with new taxes this that and the other this keeps increasing you know gas is going up and it’s kind of sad because it’s getting worse not better so it’s getting worse it’s not better correct so california has already been named the worst possible place to retire in terms of finances right uh extremely expensive and what they’re reporting more and more is a declining quality of life and i’m not going to get into all that but there’s a lot too pollution yeah there’s pollution and traffic just just to name a couple of things it’s like you don’t want to spend your time two hours just to try to go to costco yeah you know if you lived here in prescott you’d be at pasco in 15 minutes so people look at the what they call the california arbitrage which is sell my home in california come to prescott and spend half that uh on a home that’s comparable or better and pocket the rest of it you know and add that every chain goes into your retirement right build up your nest egg even more but a little something to be a little careful with that is that california is softening just a tad yeah a little bit a little bit so yeah so i was going to go to the next slide this is this is a huge we’re talking again millions and millions of people who are going to be affected by this this will not change in the for the foreseeable future this is not going to change with the possible exception of the california arbitrage we are starting to see property values in california slowing down they haven’t really in some areas that have gone down those aren’t the areas where people are really coming to prescott anyway right uh so this this trend is going to be is huge for prescott will continue to be huge and as best we can tell uh it’s not going to change i mean it’s slowing down um in that people would put their house in the market and it would sell in a week yeah and now our buyers coming in are saying it took us a little longer than a month and a half yeah you know you know maybe yeah it’s taking us a little longer so keep that in mind because things are changing yeah and if you want to get out of there quick you might want to start you know thinking about it now yeah think about it now because it’s taking a little bit longer to uh to sell in california the other thing about this is we are tiny we being prescott we are small uh so the baby boomers huge demand california huge demand we are tiny so there is little supply if you compare us to the places that uh people think about retiring to we compare extremely well uh you know phoenix and las vegas you’ve got horrible weather idaho horrible weather traffic traffic idaho is harsh winters harsh winds vegas is just 120 degrees big city four or five months of the year right and you’re right back to all that traffic uh the northwest has been a destination in the northwest is getting as expensive as california uh we’re starting to see people leave that area um for the same reason uh so people are starting to look at texas now we came from texas we love texas it was great to raise kids yeah i i don’t think the views compare oh no certainly the weather doesn’t compare uh that this is a healthier environment without mosquitoes people we’re going to do a whole wine down hardly any mosquitoes it’s amazing from us coming from the south yeah mosquitoes is that’s like the state bird of texas yeah yeah i think i’ve died and went to heaven you know people say about texas oh no state income tax that’s true but guess what huge property taxes huge yes i mean we were paying close to ten thousand we’re definitely saving money on taxes here oh yeah even though we’re paying income taxes and property taxes we’re still they’re still coming way ahead because the property taxes were astronauts yeah well that’s what i just said we were paying 10 000 and our our square footage was 2 700. yeah that’s crazy yeah that’s crazy so we compare very well and uh we are small so the supply is small and that’s not going to change you know we’ve got 50 05 000 people in prescott about that maybe a little more in prescott valley i mean if we double in size uh between the two we’re talking about 200 000 people it’s still a small town oh yeah uh so we are tiny we’re gonna in the scheme of things we will stay tiny there will be small supply in the face of all this demand so the outlook 2020 huge demand and limited supply will drive prescott real estate upward for i then foreseeable future for the next next 10 years uh it’s just these these huge demographics you just know that’s going to be the case there will be short-term fluctuations they always are but those will be swamped by the longer term upward trend it’s just a good investment here if you buy real estate here for your last home you’re going to do okay yeah you’re not going to lose your shirt um we’re holding steady yeah you’re really holding steady now press gets doing great look if this kind of thing interests you you want to keep up on real estate trends in prescott a couple of recommendations for you our home value report here are a couple of charts uh here you can see this was as of december 2019 uh year over year december to december is eight percent wow yeah eight percent and that’s prescott overall press get overwrought overall yeah there’s certain other areas other areas absolutely killing it yeah absolutely brisket lakes which is a great development here is even higher yeah you can see on our first kit is eight percent yeah wow uh the uh this is our pending ratio shows you uh how balanced the market is for the different price points as you can see it’s very little going on at 100s anymore in fact 200 is kind of drying up but you could see you know things are balanced uh you know it’s a very balanced market even into the 700s usually the higher the price point the more of a buyer’s market it is that’s still true for homes in the millions you know but even in the 800s it’s not an extreme market you know so this is a very strong market very balanced and yeah you can see these charts updated every month if you subscribe to our um our home market report and here’s our appraiser’s eye report uh which is kind of creeps me out a little bit yeah i think it’s kind of cool it looks like our daughter’s eye yeah maybe yeah it’s not her eye it’s somebody somebody else’s daughter’s eye i guess but uh but the point here is uh don’t trust zillow people did people watch it because it’s on the internet don’t get me started they think they uh the zillow knows all and they they really don’t uh you shouldn’t trust zillow in fact you don’t have to trust anybody you can use our appraiser i reports we generate this every month for every single subdivision in the city so you can download this look up your subdivision and see uh all the different comps that are available and how your house compares so this is a great way of keeping track of uh your own home if you’re a buyer this is gives you some idea of the spread of different prices and the different subdivisions so it’s a great report lots of good data this just happens to be cliff rose but uh it’s just one of the subdivisions that’s in this huge report um that’s the thing just always keep in mind zillow is just to give you a basic estimation it’s not fact yeah there isn’t uh appraisers going out to every listing across the united states and appraising and writing this up okay it’s an estimation and you’ve got stuff in there that’s just dead raw you got homes that show up that have been gone for years yeah you got pictures of homes that show up they show you a vacant lot i mean they screw up all the time yeah there’s a lot of a huge error uh of margin there so be careful margin of error margin of error margin of error there you go yeah zillow is uh just people zillow is really good at selling advertising to real estate agents and giving your information to them other than that not so good so uh other than i have no opinion i don’t either yeah so you might don’t trust zillow but don’t trust zillow trust the pickle lady and here’s where you can get our reports if you go to prescottpicklelady.com you’ll see that creepy eye on the home page if you click that it’ll take you to where you can get the appraiser’s eye report look for the appraisers i report and you can sign up for that and get market trends there’s also a link there if you want to get home valuation we’ll give you something automatic but we always follow up by hand to make sure that you get a good a good estimate so there you go pickle lady what do you think yeah and also on our website is the prescott relocation center yep so if you want to get a little bit of education about prescott and what life is like um that’s a very good resource yeah absolutely yeah it’s a wealth of information wealth wealth of for you to take advantage of the pickle lady all right we’re gonna wrap up uh if you guys have any questions uh you’ll find contact links and uh let us know and we’ll answer your questions yes happy to help you yeah thank you pickle lady you’re welcome talk to you guys nice chatting with you bye