Why rising rates won’t stop the market

Rates just hit 5%.  They haven’t been that high in many years.

It sounds like the sky is falling but it is not.

Many first time buyers are freaked out over this since they got used to lower rates.

When I bought my first house, I bragged to my friends that I was getting a 6.5% rate.  I locked as soon as they fell from 6.625%.  Most of my friends who had owned their houses for a few years had rates over 7%.

Several years later, I refinanced my third house when rates dropped to 5%.  I could not believe at that time how low that rate seemed.  I currently have a 3.375% rate on that house.

I’ve watched rates go up and down.  The market change from a seller’s market to a buyer’s market to a seller’s market.  If there is one thing I have learned is that the market keeps going.  There are always first time buyers.  There are always people getting transferred, married, divorced, retiring, and running out of space.  Those things will always happen.  The market is really about life and all the stages and events of it.

Something else I have noticed is that the market tends to pause when there is a big change, whether that change is interest rates, rising prices, dropping prices, etc.  It’s like we say “Now isn’t a good time to do this because it is different that it was.”  Then life happens, we get used to the “New” normal and we buy and/or sell.

We are in one of those times now.  Mortgage applications are down slightly, sales are down slightly.  We are entering what is believed to become a balanced market, meaning the number of buyers will be about the same as the number of sellers.  This won’t last too long because like I said, people will get used to 5%.  It will become the new normal.  The market will go on just as life goes on.

My dream place to live when I was 12


I rarely go through campus any more, but I found myself stopped at a red light on the corner of Woodland and Euclid this week.  While I was there, I decided to look around rather than checking my phone since I had just done that at the last light.

I found myself staring at this apartment complex.  Back in the early 80s, I was sure I was going to go to UK and live in one of these super cool apartments.  It would be great.  All my friends would come over.  We would do all the things a 12 year old kid thinks college is all about.  It would be Porky’s or Fast Times at Ridgemont High 2.0.  (Google that if you’re younger than 35.)

As a grown up, it made me realize that living there now would be torture.  No way I would want to be on a busy corner with all those students around me.  As the light changed to green, I thought there has to be a blog post in there somewhere.

I kept thinking about the potential post.  As I was waiting to turn left onto Walton Avenue, it dawned on me.  The post should be about how you should always look a little into your future when making real estate decisions.

When I was 18, these 1 bedroom 1 bath apartments would have met every need I had at the time.

When I got married and needed more space than these one car garage sized apartments had, a 2 bedroom apartment met all my needs.

When kids came, I needed a house with a yard.

When we outgrew that, we needed more space and storage.

Now that I am close to being an empty nester, I realize I have too much house.  But I am not moving.  Why?  I am looking ahead.  I’ve had empty nester clients buy a much smaller house than they use to have, only to discover that once grandkids came along, their little ranch was too small.  Their grown children who lived out of town would come visit for a holiday and there was no room for everybody.

Always look ahead to the next phase of life to make sure whatever house you pick will work……unless you want to keep buying and selling for each stage of life.  Which is really okay with me since that is how I make a living.




Great Time to Downsize/Retire in Lexington

It is always a good time to be in the market for somebody.

A few years ago anybody moving up had it made.  The price of their old house had dropped, but the price on their move up house had dropped even more.

Today, the winner is the buyer who is downsizing.   Sure, the house they want to buy is worth a lot more than it was a few years ago, but so is the house they are selling.

I’ve worked with several buyers who have been empty nesters or retirees.  Some already lived in Lexington.  Some have moved from out of state after discovering Lexington is a great place to retire.

Almost all of them want a ranch house less than 2000 square feet.  Some want an older house for the character.  Some want a newer house for maintenance free living.  Some have considered a condo, but none have bought one (yet).  They all have wanted to be close to shopping/dining/entertainment as well as health care facilities.  Many of them have family spread out in different states and tell me they like how Lexington is two hours to their grandkids, or 3 hours in the opposite direction to other family.  Guess having two interstates with Lexington in their crosshairs helps.

It is a lot of fun to work with these buyer, and it sure is a good time to be one of them!