Checklist of 10 Things You Gotta Do Before Winter Sets In
Such as look for roof leaks before the first winter snow. Preventative maintenance is key.
When the last of summer’s heat is a faint memory, and you’re pulling out your hoodies (and puffy coats!!) more than your shorts, it’s time to tackle a few simple chores that’ll make winter more pleasant and prevent some nasty surprises next spring.
This fall checklist helps:
#1 Clean and Stow Your Mower
If you’re not familiar with fuel stabilizer, get to know it. If your mower sits for months with gas in its tank, the gas will slowly deteriorate, which can damage internal engine parts. Fuel stabilizer ($10 for a 10-ounce bottle) prevents gas from degrading.Add stabilizer to your gasoline can to keep spare gas in good condition over the winter, and top off your mower tank with stabilized gas before you put it away for the winter. Run the mower for five minutes to make sure the stabilizer reaches the carburetor.
Another lawn mower care method is to run your mower dry before stowing it.
1. When the mower is cool, remove the spark plug and pour a capful of engine oil into the spark plug hole.
2. Pull the starter cord a couple of times to distribute the oil, which keeps pistons lubricated and ensures an easy start come spring.
3. Turn the mower on its side and clean out accumulated grass and gunk from the mower deck.
#2 Remove Garden Hoses From Faucets
Remove garden hoses from outdoor faucets. Leaving hoses attached can cause water to back up in the faucets and in the plumbing pipes just inside your exterior walls. If freezing temps hit, that water could freeze, expand, and crack the faucet or pipes. Make this an early fall priority so a sudden cold snap doesn’t sneak up and cause damage.
Turn off any shutoff valves on water supply lines that lead to exterior faucets. That way, you’ll guard against minor leaks that may let water enter the faucet.
While you’re at it, drain garden hoses and store them in a shed or garage.
#3 Drain Your Sprinkler System
Time to drain your irrigation system. Even buried irrigation lines can freeze, leading to busted pipes and broken sprinkler heads.
- Turn off the water to the system at the main valve.
- Shut off the automatic controller.
- Open drain valves to remove water from the system.
- Remove any above-ground sprinkler heads and shake the water out of them, then replace.
If you don’t have drain valves, then hire an irrigation pro to blow out the systems pipes with compressed air. A pro is worth the $75 to $150 charge to make sure the job is done right, and to ensure you don’t have busted pipes and sprinkler head repairs to make in the spring.
#4 Seal Air Leaks
Grab a couple of tubes of color-matched exterior caulk ($5 for a 12-ounce tube) and make a journey around your home’s exterior, sealing up cracks between trim and siding, around window and door frames, and where pipes and wires enter your house. Preventing moisture from getting inside your walls is one of the least expensive — and most important — of your fall maintenance jobs. You’ll also seal air leaks that waste energy.
Pick a nice day when temps are above 50 degrees so caulk flows easily.
#5 De-Gunk Your Gutters
Clogged rain gutters can cause ice dams, which can lead to expensive repairs. After the leaves have fallen, clean your gutters to remove leaves, twigs, and gunk. Make sure gutters aren’t sagging and trapping water; tighten gutter hangers and downspout brackets. Replace any worn or damaged gutters and downspouts.
If you find colored grit from asphalt roof shingles in your gutters, beware. That sand-like grit helps protect shingles from the damaging ultraviolet rays of the sun. Look closely for other signs of roof damage (#5, below); it may be time for a roofing replacement.
Your downspouts should extend at least 5 feet away from your house to prevent foundation problems. If they don’t, add downspout extensions; $10 to $20 each.
#6 Eyeball Your Roof
If you have a steep roof or a multistory house, stay safe and use binoculars to inspect your roof from the ground.
Look for warning signs: Shingles that are buckled, cracked, or missing; rust spots on flashing. Any loose, damaged, or missing shingles should be replaced immediately.
Black algae stains are just cosmetic, but masses of moss and lichen could signal roofing that’s decayed underneath. Call in a pro roofer for a $50 to $100 eval.
A plumbing vent stack usually is flashed with a rubber collar — called a boot — that may crack or loosen over time. They’ll wear out before your roof does, so make sure they’re in good shape. A pro roofer will charge $75 to $150 to replace a boot, depending on how steep your roof is.
#7 Direct Your Drainage
Take a close look at the soil around your foundation and make sure it slopes away from your house at least 6 vertical inches over 10 feet. That way, you’ll keep water from soaking the soils around your foundation, which could lead to cracks and leaks.
Be sure soil doesn’t touch your siding.
#8 Check Your Furnace
Schedule an appointment with a heating and cooling pro to get your heating system checked and tuned up for the coming heating season. You’ll pay $50 to $100 for a checkup.
An annual maintenance contract ensures you’re at the top of the list for checks and shaves 20% off the cost of a single visit.
Change your furnace filters, too. This is a job you should do every two months anyway, but if you haven’t, now’s the time. If your HVAC includes a built-in humidifier, make sure the contractor replaces that filter.
#9 Prune Plants
Late fall is the best time to prune plants and trees — when the summer growth cycle is over. Your goal is to keep limbs and branches at least 3 feet from your house so moisture won’t drip onto roofing and siding, and to prevent damage to your house exterior during high winds.
For advice on pruning specific plants in your region, check with your state extension service.
#10 Give Your Fireplace a Once-Over
To make sure your fireplace is safe, grab a flashlight and look up inside your fireplace flue to make sure the damper opens and closes properly. Open the damper and look up into the flue to make sure it’s free of birds’ nests, branches and leaves, or other obstructions. You should see daylight at the top of the chimney.
Check the firebox for cracked or missing bricks and mortar. If you spot any damage, order a professional fireplace and chimney inspection. An inspection costs $79 to $500.
You fireplace flue should be cleaned of creosote buildup every other year. A professional chimney sweep will charge $150 to $250 for the service.
The Eastside does family fun with flair! There are so many fun family events around town that it’s easy to feel overwhelmed! The good news is that most of these events are free, or at least low cost, so you can try them all out and see which ones are the best fit for your family. Here’s a rundown of the events that make creating family traditions fun!
15670 NE 85th St. Redmond, WA 98052
Act fast! This is a weekend event special, happening on December 1-2. It’s a free event held in downtown Redmond. The progressive event starts at City Hall with a tree lighting ceremony and fireworks show. From there, stroll down a lighted pathway dotted with carolers and performers. Your trail ends in Redmond Town Center where you’ll find more entertainers, shops, treats, and family fun.
This event is the priciest on my list. But it does offer a fun experience that the kids will love. You board an Argosy ship at one of many docks around Lake Washington or in Seattle and set sail! Along the way, you’ll be serenaded by choirs and subject to beautiful views. Many local yacht and boat owners follow the parade of boats and have their vessels decorated as well. If you have kids, try to snag a ticket on the lead boat, since Santa is on board and there is a dedicated kid space for coloring and crafts. There are adult beverages available for purchase as well. The event will almost always sell out, so book tickets well in advance! If the ship isn’t for you, plan to take the family to designated beaches to view the parade of boats from land!
Another annual family tradition for many Eastside families, there just aren’t enough words to describe how magical this event is. Marching drummers, dancing snow fairies, and even ice queens. You’ll also experience “snow” falling every night. (It’s really a foam machine, but the kids won’t care. It’s still magical!) The event features a parade, music, dancing, and free candy handed out by the character cast. It’s a popular event, though, so be sure to get there early. The event is free and kicks off nightly at 7 pm.
11730 118TH Ave. NE Kirkland, WA 98034
This annual play features local child actors. It’s a tradition for many families and offers a glimpse into theatre life for children. Recommended for ages 4 and up, the show is only offered on weekends. Tickets are $20 per person for all ages.
3429 240th St. SE Bothell, WA 98021
An outdoor lights display, this one is just north of the Eastside. Put on by Bothell’s Evergreen Church, this is a free event. Take advantage of free cookies and cider while you’re there, too.
Finally, let’s talk outside of the Eastside. One of the benefits to living here is the close proximity to Seattle. If you feel like making the trip across the bridge to the big city, here are my favorite holiday events in the city.
1250 1st Ave. Seattle, WA 98134
New to the city this year, this is a traveling display of lights that features the world’s largest Christmas light maze. You’ll find an ice skating trail, as opposed to a rink, which winds you by live entertainment and right to your visit with Mr. and Mrs. Claus. You need to pre-book your time in the event. Here’s a Groupon for tickets to help save you some cash!
The Sheraton Seattle
1400 6th Ave. Seattle, WA 98101
Now in its 26th year, this is an impressive display of gingerbread houses. Many have moving parts and most are taller than your child! It’s simply magical. Every year they have a different theme — this year is Dr. Seuss. Always a must see!!
Fisher Pavilion & International Fountain
305 Harrison St. Seattle, WA 98109
There are so many activities here! From the Winter Train Village to an ice skating rink and carousel to live ice sculpting demonstrations and live performances all season long. Be sure to check the website before heading down as the schedule changes daily.
These are all amazing activities in our very own backyard. Many of which I have started as traditions in my family!! What are your favorite traditions during this magical time of year!?
Increased inventory, slower sales and more price reductions all point to a balancing market—welcome news for price-shocked buyers. Sales prices are up from last October and down from the all-time high reached this spring. Despite the slowdown, it’s important to point out that we’re only moving back toward what a normal market looks like. King and Snohomish counties each have over two months of available inventory. While that is double the inventory of a year ago, it’s far short of the four to six months supply that is considered a balanced market. Sellers looking to list their home now can be sure there remains plenty of interest among home buyers.
The median home on the Eastside sold for $890,000 in October, up 5 percent from a year ago and unchanged from the previous month. While year-over-year price increases were in the single digits for the Eastside overall, several areas, including Kirkland, Woodinville and Mercer Island, experienced double-digit price gains. Buyers are still having to pay a premium for desirable Eastside properties. However, with more choices and less buyer urgency, sellers need to price their home correctly to maximize their chances of getting the best possible return.
Inventory in King County for all homes, both single-family and condominium, soared 102 percent over last October. The increase was due to an influx of new listings and the fact that homes are now taking longer to sell than at the peak of the market this spring. While buyers now have more breathing room to make their decisions, the 2.4 months of inventory in King County is still far from a balanced market. The median price of a single-family home in October was $670,999, an increase of 7 percent from the same time last year, and virtually unchanged from August and September. South King County showed larger increases, with prices rising more than 10 percent from a year ago in Auburn, Kent and Renton.
In October, the median price of a single-family home in Seattle was $750,000, up 2 percent from last October and down slightly from last month. While inventory doubled over a year ago, Seattle falls behind most areas of King County in supply with just under two months of inventory available. Demand is predicted to stay high, with Seattle’s population projected to grow at twice the national rate next year. That said, buyers are in the position to be able to negotiate. A recent analysis named Seattle as one of the top markets in the country where it makes the most sense to buy this winter.
Inventory in Snohomish County soared 65 percent in October as compared to a year ago. The area now has 2.4 months of inventory, about the same relative supply as King County. As with most of the Puget Sound area, the increase in inventory was due to a higher number of sellers listing their homes and fewer sales. Year-over-year, the median price of a single-family home sold in October in Snohomish County grew 8 percent to $473,000. The median price in September was $485,000.
This post originally appeared on the Windermere Eastside Blog.
Return on Investment
If you’re considering having some work done on your house, it’s wise to consider making the right choices. We’ve all seen the HGTV shows that teach us a $20 lamp can yield a $250 improvement in sales price or something silly like that, but if you’re like many of my clients, you’re probably left more confused by these sorts of home improvement shows than you are left informed.
Bottom line? Investing in your home is (almost) always a smart choice. If you’re on the fence about doing it, just do it. But if your goal is getting the most “bang for your buck” with your improvements, there are some things that you should know before breaking out the Home Depot charge card.
We all know that improving a kitchen or a bathroom is the best way to turn a $500 remodel into a $5,000 value, right? But did you know that you’ll actually realize a better return on investment if you do a mid-level upgrade versus a luxury model upgrade?
If you check out this graph, compiled by Redmodel.hw.net, you’ll see that a midline bathroom upgraded yielded an 87.7% cost recoup, while an upscale remodel yielded just a 60.8% recoup on costs. Pretty impressive right?
Turns out, you don’t have to break the bank on your home project to get the best bang for your buck.
The trend continues when you look at a major kitchen remodel. A midline upgrade, defined as one costing in the ballpark of about $70,000, yielded an average 62% cost recoup. Taking a look at an upscale major kitchen remodel, think more in the $125k range, only yielded a 56% recoup on costs.
The trend continues through almost every major area of home improvement, including additions of master suites and bathroom additions.
So, what areas of home improvement should be done at an upscale level?
There are some parts of the home that deserve the extra bang for your buck. The addition of a grand entryway, for example, can recoup 82% of your costs, making it one of the smartest improvements that you can make. Other areas where you should consider an upscale improvement include window replacement. No matter if you choose wood (81% recoup on costs) or vinyl (85% recoup on project costs), you’ll realize a great home improvement by going upscale with windows.
Midscale? Upscale? Just tell me what to do first.
Still confused? Don’t worry, I get it. There are a lot of numbers flying at you right now. Most people can only budget for one major home improvement project at a time, so if you’re staring down a long list of “maybes” and only have time or budget for one improvement, let’s cut to the chase. . .
Are there any home improvements where you can recoup all of your investment?
Are there any improvements that will actually yield a pure profit?
The good news here is that, yes, Virginia, there is a home-improvement Santa Claus. If you’re only going to tackle one project- make it an upscale garage door improvement. Those babies can realize a 120% return on your investment. That means it’s not only “free,” but it will make you money when it is time to sell your home. Since even the most upscale of garage door replacements can be done for under $5,000, this is a smart investment that you should be making right away.
Another sure-fire bet is a midrange stone veneer upgrade to your siding. These are very trendy right now, and reports are showing that this improvement will realize about 120% return on investment. Considering the average project cost for this is generally under ten grand, this is a smart investment.
Finally, consider upgrading your front door to a steel door. At around $1,500, this project has a 95% recoup of costs, making it almost free. Another trending improvement is the addition of a wood deck.
What to put on hold
While it would be nice to do all the upgrades at once, that’s not realistic. According to the reviews I’ve been monitoring, the following improvements have the lowest recoup of investment potential and can safely be saved for another time.
Upscale master suite addition, 51% ROI
Midrange backyard patio addition, 51% ROI
Major, upscale kitchen remodel, 56% ROI
Upscale bathroom addition, 60% ROI
Midrange kitchen remodel, 62% ROI
Upscale bathroom remodel, 62% ROI
Still feel like you could use some home improvement guidance?
The truth is that I find all of this really interesting, and would love to speak with you about it! If you’re confused on where to get started, how to budget, or who to hire to do the work – I’ve got you covered. Feel free to email me or call me and we can schedule a time to talk about your unique home and how best to improve it for your future resale value.
And if you’ve just completed a major home project, I want to see it! Be sure to share it with me on social media!
Home appreciation in the Eastside and Seattle Area has seen pretty large gains in the past several years. On the Eastside September 2017 median sale price was 740,000 vs. September 2018 median sale price of 800,000.
When was the last time you talked with your home insurance professional? It may be time to contact them to mare sure your home is insured at the value it is today! Your home may be your greatest asset — protect yourself and that asset!
Ask your insurance professional the following;
Do I have enough insurance to rebuild my home?
Do I have enough insurance to replace all living expenses?
Do I have enough insurance to replace all of my possessions?
Do I have enough insurance to protect my assets?
Click here to read the entire article written by the Insurance Information Institute.
If you’re interested in finding out your homes current value please contact me so I can come do a home evaluation. It’s good info to have. You can also sign up for Neighborhood News where you can receive monthly information specific to your zip code.
So, let’s be honest. The best parties are almost always going to be across the bridge in Seattle. While your favorite local bar may have an event closer to home, if you’re reading this blog, chances are that you’re looking for something a bit more substantial. The Eastside is great, but sometimes being so close to the big city is a big benefit. Here’s a look at 5 great adults only events for Halloween 2018.
- Get on a Boat! Set sail for an epic haunt this year. There are two themed cruises that I was able to track down, both leaving from downtown. Halloween Havoc, which comes with a $50-$150 per person price point, puts you on a yacht with a few of your closest friends, three DJs, and a two-floor dance floor. Learn more about it, here.
- Competing for your maritime money, Hip Hop Halloween also offers a yacht full of costumed adults looking for a good time. This one has a better price point, starting at just $30 a pop. Three DJs and two floors for dancing, but with a more hip-hop centered sound. Both cruises happen on the 27th. Learn more about this one, here.
- HAUNT. Revered as Seattle’s best Halloween experience for adults, this party will cost $69 to walk in the front door. Once inside, you can expect great music from local bands and DJs and nearly 2,000 costumed adults letting go of their inhibitions for the evening. While there is a costume contest, this year there is no theme- so anything goes! Learn about the categories and get your tickets before they sell out! Here’s the link.
- If you insist on staying on the Eastside, Maggianos at Bellevue Square is cooking up something special this year. It’s a murder mystery dinner, and it looks like a great time! The event is for adults 18 and up, and costumes are optional. (But really, wear a costume.) Your $69 ticket includes dinner and a drink (which makes the event almost free) and anyone could be the killer. Even you! Tickets are available at Eventbrite now.
- Finally, here’s a find over in Issaquah. It’s not specific to adults only, but chances are pretty low that parents will be taking their kids to a cemetery tour! This isn’t a party, it’s more of a historical based event. But I love it because not everyone wants to get dressed up and slam Jello-Shots on Halloween, right? Right? At just $20, this is a thrifty find. But buy those tickets quickly, as there are fewer than 30 available.
Looking for family-friendly Halloween fun around the Eastside? I’ve got you covered. Halloween costumes are pricey, and you should absolutely get the most bang for your buck by giving the kids as many opportunities to wear them as possible.
There are plenty of exciting events happening all over the greater Seattle area this year, but here are my picks for closest to the Eastside.
Boo For the Big Kids
This one isn’t for the faint of heart. The haunted experience at Beaver Lake in Sammamish has created a Family Scare event this year. Now, that doesn’t mean that I’d take a two or three-year-old to this event. But older kids? The ones who are too cool for trick-or-treating… but still too young for real haunted houses? This is the perfect event for them. Running weekends only throughout October, the Family Scare event runs from 7-7:45 pm, with the full scare kicking off at 8 pm. Family scare prices are $8 a person cheaper, too.
Also in Sammamish, kick off beggar’s night with a little pre-party at City Hall! Kids are allowed to trek through City Hall from 3 – 4:30 pm on October 31st. The event is free and offers safe trick-or-treating for all ages, but is generally best for small children.
Factor This In
Head to Factoria Marketplace in south Bellevue before beggar’s night for their 9th annual Halloween Bash. Held on October 31, the party is held indoors, which is great for little kids and offers trick-or-treating at merchants as well as other fun activities. The event runs from 4:30pm- 6:30pm.
Kick it Off in Kirkland
Finally, one more event to jump-start your October 31st beggar’s night festivities. The Downtown Kirkland Association always plans experiences that are good family fun and well thought out. I love their Summerfest, and it’s no surprise that their take on Halloween is equally exciting. I love this event so much, that I had to include it, even though the details weren’t out yet when I wrote this post. Check out their webpage for more details as they become available.
For more fun- click here (link) to check out my rundown of best pumpkin patches around the Eastside. These places almost always have something a little special going on for the kiddos around Halloween. And if I’ve missed your favorite family-friendly Halloween event, be sure to share it with me on my social media. I’m always up for a new adventure
It’s a tradition in the PNW unlike any other. Talk to moms from the Midwest about where they pumpkin patch and they’re likely to raise an eyebrow. But out here on the Eastside? Choosing your pumpkin patch for the year is almost as big of a deal as choosing where you’ll vacation in the summer. With different patches offering amazing amenities and activities, competing for your gourd dollars winds up meaning a full day of family fun.
The one major bummer is that, with real estate being as costly as it is on the Eastside, you’re going to have to drive a bit to get to the best pumpkin patches. They’re all great, if I’m being honest, and you’ll enjoy any of them. That said, different patches appeal to different aged kids. Choosing the best one for your family makes the drive more worthwhile.
Here is the lowdown on the pumpkin patch experience!
This one is my pick for big kids. Once you arrive you’ll find acres upon acres of pumpkins as well as a ton of family-friendly attractions. Perhaps the best of all is the massive corn maze on site. The maze is a whopping 10 acres large and always Take a Hikecut into interesting, artistic designs that you can only see from above. I like this maze for the big kids because they specifically offer admission after dark, which is spooky and exciting all by itself! You can also reserve a fire pit to roast marshmallows after you make your epic escape. For the little kids, there are also two smaller corn mazes that are less intimidating. Other free activities include hayrides, a tike track for riding, and a playground area. In addition to your pumpkin, you can also pay to play on big slides, the corn crib (excellent for sensory kids) and fire apples out of the apple cannon. A rope maze, sandpit, and cow-train ride complete your full day experience.
My favorite pick for those with little kids, this is a wonderland for the imagination. On top of the you-pick-pumpkins, you’ll also find admission free fun things to do that enchant the smallest of adventurers. There is a large corn maze that is themed and unintimidating for younger guests, as well as a kid’s adventure maze, miniature golf, and a mouseville themed gift shop. Kids can also pet farm animals. On the weekends you’ll find hayrides, apple slingshots, and face painting, too. Older kids may get a little bored at this one, but for little kids, the value cannot be beaten.
If you’re noticing a nod to Snohomish, it’s not intentional! It just so happened that all of my favorite places are located just north of the Eastside. And, among all of them, The Farm at Swan’s Trail just may be my absolute favorite. It’s a literal adventure wonderland that is well suited for families with kids of all ages. A FIFTY-acre pumpkin patch pretty much guarantees selection wide enough to last the entire season, and you’ll also find a pretty nicely sized petting zoo. On top of that, expect to laugh your tail feather off at the duck races and Farmer Ben’s “Four Little Pig” shows. There are also wagon rides, picnic pavilions, a massive corn maze, and you pick apples. I’d be remiss if I didn’t mention the barn. It’s a tiny hay bale maze up to the hayloft where kiddos can zip down a slide into a pile of hay. It’s the stuff great photos are made of, friends.
Things really get fun when you get into the paid activities, though. A giant hay bale pyramid for climbing, a ball pit, large slides, an inflatable jumping pillow, rubber duck races, gemstone mining, pedal cart racing, and a cow train all await you. Plan to spend all day at this one, and make family memories that evolve into a tradition your kids will take with them for years to come.
Stocker Farms, Snohomish
Fox Hollow Farm, Issaquah
Remlinger Farms, Carnation
This list is just a short sample of all of the pumpkin farms out there. If nothing here tickles your fancy, here’s a longer list compiled by Red-Tri. If you’re not up for the drive to one of my favorite farms, maybe you can find one closer to your home neighborhood here and tell me all about why you loved it in the comments! Happy hunting!
It’s here we can’t deny it — fall has settled in. The beautiful, sunny, and warm days are coming have come to an end. But don’t you go downing fall on me just yet! It’s actually my favorite time of year! That nice little nip in the air in the morning, the lazy evenings, and the smell of fresh textbooks. It’s a wonderful time! Here are three great ways to enjoy September around the Eastside!
High School Football
Living in Seattle, for most of us, means a love of Seahawk football. Attending games is more than a way to pass a day, it’s an experience. And, like most major experiences, it costs a pretty penny. So why not enjoy a some Friday Night Lights and watch a more affordable game of gridiron? So many of our local High School teams are contenders on a statewide level that attending a high school game not only means you’re out enjoying the fall evening weather, it also means you’re seeing some legitimate talent. Plus there are affordable concessions, marching bands, and all kinds of school spirit!
Take a Hike
Head over to Bridle Trails State Park in Kirkland for a nice family hike. The park itself isn’t huge, which makes it perfect for exploring on a weekday evening after school. Walk through the dense trees seeking out unique shadows cast through the branches and onto the dirt pathways. The enchantment of this urban park is turned up to eleven when a horse comes striding by you. Bridle Trails was designed as a horse walking park, which means that the unexpected rider can pass you by. I love this quiet oasis right in the middle of the densely populated Eastside! I also have to give an honorable mention to Juanita Bay Nature Preserve, where you can spot bald eagles fairly regularly.
Have you ever tried to go stand-up-paddle boarding on Lake Washington? SUP for short, I actually prefer early fall for this activity to summer. The crowds are gone, the water is still warm, and the sunsets are something else entirely. Perfect Wave is my go-to spot. Located right at Houghton Beach in Kirkland, there is nothing more refreshing than an evening paddle, followed by happy hour at The Beach House, which is well worth a visit. Just remember, hours start to narrow as summer closes, so check ahead before showing up.
What are your favorite fall activities!!??
Interest rates are changing. Here is a great article written by Windermere’s Chief Economist Matthew Gardner about how this may affect the Real Estate Market.
Interest rates have been trending higher since the fall of 2017, and I fully expect they will continue in that direction – albeit relatively slowly – as we move through the balance of the year and into 2019. So what does this mean for the US housing market?
It might come as a surprise to learn that I really don’t think rising interest rates will have a major impact on the housing market. Here is my reasoning:
1. First Time Home Buyers
As interest rates rise, I expect more buyers to get off the fence and into the market; specifically, first time buyers who, according to Freddie Mac, made up nearly half of new mortgages in the first quarter of this year. First-time buyers are critical to the overall health of the housing market because of the subsequent chain reaction of sales that result so this is actually a positive outcome of rising rates.
2. Easing Credit Standards
Rising interest rates may actually push some lenders to modestly ease credit standards. I know this statement will cause some people to think that easing credit will immediately send us back to the days of sub-prime lending and housing bubbles, but I don’t see this happening. Even a very modest easing of credit will allow for more than one million new home buyers to qualify for a mortgage.
3. Low Unemployment
We stand today in a country with very low unemployment (currently 4.0% and likely to get close to 3.5% by year’s end). Low unemployment rates encourage employers to raise wages to keep existing talent, as well as to recruit new talent. Wage growth can, to a degree, offset increasing interest rates because, as wages rise, buyers can afford higher mortgage payments.
There is a clear relationship between housing supply, home prices, and interest rates. We’re already seeing a shift in inventory levels with more homes coming on the market, and I fully expect this trend to continue for the foreseeable future. This increase in supply is, in part, a result of homeowners looking to cash in on their home’s appreciation before interest rates rise too far. This, on its own, will help ease the growth of home prices and offset rising interest rates. Furthermore, if we start to see more new construction activity at the lower end of the market, this too will help.
5. National versus Local
Up until this point, I’ve looked at how rising interest rates might impact the housing market on a national level, but as we all know, real estate is local, and different markets react to shifts in different ways. For example, rising interest rates will be felt more in expensive housing markets, such as San Francisco, New York, Los Angeles, and Orange County, but I expect to see less impact in areas like Cleveland, Philadelphia, Pittsburg, and Detroit, where buyers spend a lower percentage of their incomes on housing. The exception to this would be if interest rates continue to rise for a prolonged period; in that case, we might see demand start to taper off, especially in the less expensive housing markets where buyers are more price sensitive.
For more than seven years, home buyers and real estate professionals alike have grown very accustomed to historically low interest rates. We always knew the time would come when they would begin to rise again, but that doesn’t mean the outlook for housing is doom and gloom. On the contrary, I believe rising interest rates will help bring us closer to a more balanced real estate market, something that is sorely needed in many markets across the country.