Podcast Archives - Jay Garvens

As much as I know about our local real estate market, I don’t know everything. So once a month, I bring into the studio a man who does know everything: Empire Title’s Bill McAfee. As the owner of one of Colorado Springs’ most successful title companies, Bill sees trends and patterns in the real estate and lending markets first-hand, and once a month he stops by to share his insights with me and my radio audience.

His biggest insight this time around was that the inventory glut of the last several years seems to be leveling out. The number of homes listed on the local MLS is at a 10 year low. And while sales for 2014 are so far 3% down versus 2013, the third quarter of 2014 saw the most activity since 2006. Year-over-year, home prices are up 4%. We aren’t seeing the double-digit gains of last year, but 4% growth is a solid and healthy development.

These numbers vary across price brackets, however. Homes over $750,000, and especially over $1 million, have extremely high inventory levels, show no growth in value, and are staying on the market far longer than lower- to moderately-priced homes. For whatever reason, the high-end market is sputtering while the rest of the market appears very healthy. Inventory has normalized, interest rates are still very low, and prices are no longer accelerating wildly.

The developments in our local housing market, and the disparities between the lower and higher ends of the market, are the result of the choices we as a community have made. It is, in a sense, “the house we built.” This is evidenced throughout the country. Right now, the hottest sectors of the economy are oil and technology. Silicon Valley and Seattle have extremely hot real estate markets. But the fastest growing markets are in oil-producing areas, with Texas and North Dakota well represented in surveys of the fastest-growing areas. In fact, 8 of the top 10 fastest growing areas are directly linked to oil exploration.

We see this locally in Colorado. Our state’s fracking and drilling ventures are generating a lot of money for a lot of people. As many oil companies have their regional headquarters in Denver, that city is seeing the benefits of expansive drilling. El Paso County, unfortunately, does not have oil to drill. And Fort Collins is scrambling to preserve their local ban on hydraulic fracturing. Which is fine. It’s their house to build, and they can build it any way they want. But they shouldn’t expect Denver-levels of growth, especially after the higher education bubble bursts.

Our communities are the houses we built together. Looking around the country, from Seattle to Houston to Fargo, you can find a multitude of successful ways to build a house, and many unsuccessful ways to do so. Locally, we have gathered military contractors, non-profits, and military installations to create a relatively stable house showing all the qualities that Bill illustrated on the show. Any changes in the market can be attributed to decisions our community made for itself in the past; and if we want to see any particular changes in the future, we need to make the required decisions today.

9-20-2014 The House We Built

  It’s not difficult to predict the future if you know where to look. Soothsayers used to make predictions by reading tealeaves, which isn’t a terribly effective method for real estate or investing (believe me, I’ve tried!). But I’ve had better luck since I started looking for leaves outside the teacup. There are tealeaves all around us, from economic data to consumer habits to local construction projects. The trick is knowing what to look for and how to make sense of what you find.

They call economics the “Dismal Science,” and for good reason: it’s the only discipline that makes weathermen look competent. Economists spend all day reading tealeaves in the form of economic data. Employment, consumption, household debt, demographics, and manufacturing data—virtually any kind of data you can imagine. The trends in the data give economists an idea of what to expect in the short, medium, and long terms, even if most economists are almost always wrong. But occasionally they get things right. They knew a housing collapse was imminent in 2007; they knew the banking sector’s reliance on mortgage-backed securities would be disastrous; and they knew the banking system would suffer a catastrophic meltdown without TARP.

Today, they data are telling them different things. They know we’re in a demand-side slump because the Boomers are retiring and spending less, and the Millennials haven’t yet arrived to replace them. They know credit card, mortgage, and auto debt are shrinking while student loan debt is expanding rapidly, meaning consumers will have less short-term, easy-to-pay debt and more long-term, non-dischargeable debt. This will have—and in fact may already be having—profound consequences for the economy. Student loan debt is becoming the sole difference between being able to afford a new home and not. Every piece of economic data is a tealeaf, even if they are unreliable tealeaves. The data takes months to be released and is often subject to future revisions. But reliable or not individually, they generally point to the same conclusion when taken together.

There are other more reliable tealeaves around. The largest I’ve ever seen is five stories tall; it’s right off the freeway near Nevada and I-25. There are other multi-story tealeaves off Powers and up north. There’s a dozen-acre tealeaf off Marksheffel. I’m talking about new apartment complexes, new condo projects, and new neighborhood developments that sprung up overnight in 2006 then stayed dormant until this year. Eventually, these projects will become data for the economists to parse. But right now, it’s data for you to use immediately!

Construction projects tell us a lot based on their size, scope, and type. The boom in apartments and condos suggests housing demand is concentrated among young, single individuals. Many will be renters for years. If they marry, they typically put off having families—and thus needing larger homes with yards. Neighborhood developments have once again ground to a halt, after modestly recovering over the last couple years. Single-family residences are simply not in high demand at present.

You may have noticed recently that TV commercials are focused on older demographics. This is because older people have more disposable income than younger people. It’s also because younger people aren’t watching TV anymore. Something as benign as a TV commercial contains a substantial amount of information about the broader economy. Tealeaves can be found virtually anywhere you look. They are data and trends that offer insight into the future. Once you learn to identify them, you can start using them to plan for your future.

 

9-13-2014 Reading The Tea Leaves

Contrary to what you may have heard, investing should not be sexy. Fast-paced, high-risk, get-rich-quick trading is not investing—it’s gambling. Good investors should be prudent, patient, and bored to death, and the investing instrument most conducive to this approach is real estate. Unfortunately, real estate has a reputation for being complicated, risky, and reserved only for elite and extremely savvy investors. In fact, real estate is an ideal investment for everyone, regardless of income level. On August 19th, I’ll be holding a home-buying class specifically for investment properties. This week’s show laid the groundwork for that class.

After proposing a home-buying class specifically for investment properties, my office manager at Garvens Mortgage Group, Kay, mentioned that I should cover the basics on the radio before hosting the class. Many individuals interested in real estate investing may not even know what they don’t know, after all. So let’s get the basics covered.

When investing in real estate, you’ll realize returns in two ways. First, you will realize returns as appreciation, or the increase in value of the asset itself. Real estate generally appreciates consistently, if not at spectacularly high rates. There are exceptions, such as the housing bubble and subsequent implosion in 2008, or local markets that are either over-heated or in decline. But in most cases, real estate appreciates. Second, you’ll realize returns as cash flow, or net rents, from the property (assuming it’s being rented). Even with a mortgage on the property, competent investors can typically manage a 9-15% annual return just on net rents—that is, the difference between the cost of the mortgage and the revenue from rent.

Once the mortgage is paid off, all net rent goes right into the investor’s pocket. This typically won’t be for 15-30 years, depending on the terms of the mortgage and how quickly the investor pays down the mortgage. This is what I meant by a good investor being patient. An investor who accumulates rental properties early can have them paid off by retirement and secure a steady income from those properties.

Obviously, a home is an expensive asset, so most investors will need financing. Those looking to buy a property specifically for renting out will need to put 25% down to secure financing on the property. This makes sense since an individual facing tough financial circumstances is almost guaranteed to foreclose on his investment properties before his primary residence.

For those who don’t have 25% to put down, one option is to use upgrades or downgrades as opportunities to turn their old property into a rental. A family upgrading from a starter home to a larger home can keep their starter home and simply rent it out. Similarly, a retired family looking to downgrade can keep their larger home as a rental. In these instances, they will only need between 3.5% to 5% for the down payment to buy their primary residence which, in a few years, will be turned into a rental. (And, no, you can’t just say you’re moving into a property as a primary residence and then rent it out from the start. This is called occupancy fraud and is a major crime.)

I have only scratched the surface of real estate investing here. For more information on the basics, I encourage you to check out both hours of the show in the radio archive. And for even more information, and to have any questions you might have answered, sign up for the investment property homebuyer’s seminar scheduled for August 19th. We’ll cover the real estate side, the mortgage side, and you’ll hear about the experiences several of my team members at Garvens Mortgage Group had when getting into real estate investing on their own.

 

8-9-2014 Ready, Set, Invest! Part I

8-9-2014 Ready, Set, Invest!  Part II

  I come across a lot of statistics in my day-to-day readings, and the statistic most pertinent to today’s show is this: The percentage of 18-34 year olds living with their parents is 30%. This is up significantly from a decade ago. Besides spending more time living at home, this age group  also spends far longer in school and delays important life decisions, such as getting married and buying a home, until later in life. This is the shape of the Millennial Wave, and it’s set to make landfall in just a few years.

 

On last week’s show, we discussed the early formation of this wave: how historic events and trends that were set into motion decades, and even centuries, ago determined the shape and intensity of the Millennial wave. This week’s show is the second installment in the series on Demographics in America and covered the current state of the Millennial Wave. It is still six years until the first Millennials begin to enter their most economically productive years (roughly age 40-60), but the current state and composition of this demographic is having immediate effects on the housing market and broader economy.

 

As mentioned, Millennials are delaying many life decisions far longer than previous generations. They’re graduating college later, leaving home later, finding a spouse later, and having children later. This is having an immediate effect on the housing industry. A substantial portion of Millennials still lives with their parents, while those who have moved out are largely electing to rent rather than buy a home. This has caused a booming rental market and significant increase in construction projects for apartment complexes.

 

Another factor affecting Millennials is a weak job market. Many Millennials graduate from college with severely diminished employment prospects. Some neglect to even look for a job, while others can only find employment in fields far below their education level. This, more than anything, contributes to the Millennial habit of delaying maturity. Few find themselves in the kind of thriving financial situation necessary to start a family.

 

The bleak future outlook for Millennials is having an effect on the Baby Boomer generation right now. As Millennials delay buying homes and starting families, Boomers are finding demand for their current residences severely weakened. Many Boomers that had planned to downsize their home are finding it difficult to sell their current large homes quickly and at the price they had anticipated. Worse, uncertainty in the economy is making it difficult to make near-term financial plans. The economy has been oscillating between no growth and anemic growth for several quarters. Second quarter GDP grew at a relatively brisk 4%, but nobody is sure what to make of this. Interest rates have been tracking this uncertainty. Depending where the economy is a year from now, rates could be at their present levels or much higher. Nobody is quite certain where they’ll be!

 

What this means to current homeowners is that wherever interest rates are when they go to sell their home will determine how high demand is for their home. If rates are higher, buyers will have to devote more money to the interest rate and less to principal, meaning they may decide to buy a smaller and cheaper home to offset the rate increase. This could alienate many buyers from higher-priced homes. This, in turn, makes it difficult for individuals to plan for the near future with any certainty.

 

These are just a few ways the current shape of the Millennial Wave is affecting the housing market. I spent the second hour illustrating this point with further examples. Inquiring minds will want to check that out in the archive. And don’t forget to tune in next week for the concluding installment of my series on Demographics in Ame...

             It is an under-appreciated truism that all of history has been leading up to the present. While we can shape our futures, we do so with clay inherited from past generations. Like an earthquake beneath the sea and its resulting tsunami, we know what to expect based on what has already happened, though we may not know its exact features, severity, or duration. We know only that a tsunami is coming. And today, we’re discussing the generational tsunami of the Millennials.

To understand what effect distinct generations can have on America’s broader economy and culture, consider the economy’s performance over the last few decades. Our economy’s two-decade boom from the mid-1980s through 2006 was the direct result of the Baby Boomers entering their productive peaks. Generally, people are at their most productive between the ages of 40 and 60. The first Boomers, born immediately after World War II, entered this stage in the mid-1980s. As the largest generation in American history, the Boomers brought unprecedented levels of productivity and consumption to the US economy, until they began retiring in 2006.

The housing crisis and financial meltdown of 2007-2008 were short-term trends that culminated in a mania and a crash. The aftermath, however, has been the result of long-term macro trends in our economy. The sluggish growth and anemic economic performance of the last six years can be traced directly to one fact: The Baby Boomers are retiring, and Generation X is not large enough to pick up the slack.

When individuals retire, they stop working and they cut back heavily on their consumption, both of which have a detrimental impact on the economy. In the past, each generation was larger than the one preceding it, so the effects of one generation retiring were not felt so acutely. Generation X, however, is almost half as small as the Baby Boomers. The homes, cars, appliances, electronics, etc., that were being sold to Boomers just a few years ago suddenly have a far smaller market. Fewer goods and services are being consumed because the generation currently at its productive peak—Generation X—is not large enough to offset the reduced consumption of the Boomers.

This will change, however, once the Millennials begin to enter their most productive years around the year 2020. At 87 million, the Millennials are the largest generation in US history. They will produce far more than Generation X could, and ideally consume far more as well. Many demographers and economists project this massive influx of productivity and consumption will finally return the economy to a period of robust growth.

There are, unfortunately, some trends that might dampen the Millennials’ contributions to the economy. They are delaying many life decisions until later in life, such as home buying, marriage, and having children. This means all the items and consumables necessary for raising a family—a larger home, more food, children’s clothes, and so on—aren’t being purchased until later. Also, Millennials are deeply in debt—particularly student loan debt. Because of how student debt repayments are structured, many will shoulder a significant debt burden for decades. Rather than contributing to the economy through consumption, their earnings will instead go to banks or the government to service their debt.

Millennials will enter the national stage in due time, but it’s unlikely they will arrive with quite the same vigor and health as previous generations. While their numbers are substantial, there are many factors that may diminish their ultimate impact on the economy. As mentioned earlier, we know what’s coming but not exactly what form it will take. We can, however, make predictions on what form it will take, and that will be the subject of future installments of this series on the Millennial tsunami.

 

The subject of this week’s show is the most riveting subject on earth: Budgeting! I say this only half-jokingly because once you know the power and importance of budgeting—and most people don’t—it becomes an fascinating topic. Sure, a lot of fun stories involve mismanaging money and blowing your mortgage payment at the roulette table. But when you’ve found financial peace after years or decades of debt, you’ll never want to go back to being a profligate spendthrift—and when someone starts talking about budgeting, you’ll listen closely!

For most of us, our financial habits are inherited from our parents. We typically spend 18 years being exposed to one small economy (our family’s), and we practice the lessons we learn there for the rest of our lives. Unfortunately, most families practice very poor budgeting skills. Household debt is high, too few have emergency reserves, and the virtues of prudence and frugality have been all but forgotten. Every individual should consider the household they were raised in and whether it’s a model that should be followed. At the very least, it can be used as a guide on what not to do.

For example, my parents were extremely frugal people. My father was the personification of the ‘Millionaire Next Door.’ They paid for virtually everything in cash, and the only debt they ever carried was a 30-year note on their mortgage. They never spent exorbitantly on items, saved eating out for very special occasions, and squirreled away money their entire lives. The notion of buying a new phone because a marginally improved model was just released would be sacrilege to them.

My parents never worried about money because they managed it well. As John Maxwell says: “Having a budget simply means telling your money to do, instead of your money telling you what to do.” That is, in fact, what you see with people who are bad with money: their money runs their lives. They’re constantly shuffling money between accounts, divvying up expenses between this credit card and that, and figuring out what to sell so they can make ends meet.

The vast majority of people aren’t in debt because they’re poor. It takes money to get into debt. Most people in debt got there because their income doesn’t agree with their living situation. But rather than adjust their living situation—buying fewer luxury items, clipping coupons, canceling their cable bill—they decide to sustain it until they have no choice but to change. That is an extremely dangerous practice, and it’s unfortunately all too common.

If you’re just starting out in life, or if you’re established in life but find it difficult to make ends meet, I cannot recommend Dave Ramsey’s Financial Peace University enough. His 9 steps for financial peace are all you need to eliminate debt, budget well, and plan for the future. They include such things as:

* Establish a $1,000 emergency fund as quickly as possible

* Work toward building a 3-6 month emergency reserve

* Save at least 15% of your income for retirement

These are basic, easy rules that have a profound effect on your immediate and long-term budgeting. But, of course, they don’t cover all topics. Certain life choices, like buying a home or investing in real estate and rental properties, require additional planning and unique budgeting techniques. For these, I encourage everyone to give me a call, ask me questions, and continue listening to the Jay Garvens Show.

7-19-2014 Law of Gravity: Money and Budgets

71-19-2014 Law of Gravity: In the Trenches with Your Budget

“Buy low, sell high” is about the only investing advice you’ll ever need. For many investors, this means buying an asset when its value is low then waiting for the market to raise its value. If you’re like me, you’re not patient enough to wait for the market to do its thing: You’d rather have a little influence in how quickly, and by how much, that asset appreciates. This week’s show was all about using houses as investment vehicles—both as a primary residence and as investment properties.

I have spent dozens of shows discussing the economic and financial aspects of homeownership. For the vast majority of responsible individuals, there are no good reasons to rent instead of own. It just makes financial sense—especially with today’s low rates. For roughly what it costs to rent, you could be living in an appreciating asset that you’ll one day own and which can be turned into a cash-flowing property. But as with all investments, nobody should rush into homeownership without exercising caution and prudence.

The first thing to consider before purchasing a home is how much you can afford. Forget your dream home; you should only concern yourself with what your budget will allow. You need to consider not only the cost of the mortgage, but also taxes, insurance, utilities, and potential maintenance. Rather than visualizing your dream home, consider your current residence and think of things that would offer an improvement. Maybe an extra bedroom? A laundry room? A bigger kitchen or more spacious living room? These will be the qualities you look for when buying a home—not the wrap-around porch and Olympic swimming pool and ten acres of land that you see in your dreams.

Once you’ve found a home, you need to do your homework on it. You should consult with the assessor’s website for its ownership history. If there have been several owners over a short time, that raises questions. You should also pay for a home inspection and not be afraid to request fixes from the current owners. Going under contract and not getting an inspection is the most egregious error a person can make. You also need to consider the area the home is in and consider whether it’s a neighborhood that’s likely to appreciate, or whether it’s in decline. This could have severe implications ten or twenty years down the road.

That was advice for people looking to purchase a home to live in. If you’re more daring and are considering purchasing a home—or homes—for investments, there are further things to consider. The first is whether the home you’re looking at has qualities that make it a prime candidate for appreciation. It’s common today, and was especially common during the housing bubble, for investors to buy any old piece of junk and turn it into not-as-much-of-a-piece-of-junk. But it’s still a piece of junk. A coat of paint, hardwood floors, and new appliances don’t add $50,000 in value, but it’s common to see these as the only improvements a house flipper makes. They figure since the buyer won’t see the old pipes, cracked foundation, and old wiring, they don’t need to address them.

On the other hand, my mortgage company recently did a loan for woman who bought a flipped home, and the investor who sold it to her did an exemplary job flipping that house. He selected a home with obvious potential, completely renovated, made repairs, and finished the job with close attention to detail. He picked a house with a lot of potential value, rather than finding a severely distressed property and making it cosmetically appealing. This is the right way to do it. He legitimately added a substantial amount of value to the home.

This has only scratched the surface of this important topic. As always, I encourage you to check out the show in the archives for more details and a more thorough discussion. And stay tuned over the coming weeks as I come back to this and...

Everyone has a story worth telling. I’ve learned this from my time in the mortgage industry and on the radio, having helped thousands of individuals with their mortgages and having talked with thousands more who have called into the show. This is inevitable, I suppose; when you help finance someone’s home—the place they live or want to live—you’re bound to hear their story: where they’ve been and what brought them to this place in their life. Being in Colorado, most of these stories involve the military in one way or another. That’s why this week’s show was dedicated to the stories and biographies of military members.

I’m an avid reader, and recently I’ve become absolutely hooked on military biographies. This started after reading No Easy Day by Mark Owen and Kevin Mauer, which is the story of the mission to kill Osama bin Laden. Other notable entries in this genre are Outlaw Platoon by Sean Parnell, Fearless by Eric Blehm, and Robert’s Ridge by Malcolm MacPherson, which features the story of one of my past mortgage clients. Each book tells an extraordinary story and features extraordinary military veterans.

Just because these stories are extraordinary, though, does not mean they are the only stories worth telling. I’ve spoken with thousands of veterans during my time in the military, on the radio, and in the mortgage industry. From them, I’ve heard hundreds of similarly incredible stories that, sadly, may never be written down. I’ve also heard hundreds of phenomenal stories from non-veterans detailing significant events in their lives and incredible things they have done and experienced.

Many of these people, both veterans and non-veterans, never seem to think their stories are extraordinary. People seem to have an innate bias against their own experiences. Perhaps things don’t seem as exciting when you’re in the moment and remember them in retrospect.

This is the impression I get even when reading the biographies and journals of our Founding Fathers. These were the men whose average age was 47 and were instrumental in one of the most radical revolutions in human history. But during and after the fact, they treated the events and their involvement in them as business as usual. It’s only through excellent biographers that the events receive the reverence and profundity they deserve. Jefferson and Franklin certainly didn’t seem to grasp the enormity of their actions.

But, of course, men can’t get all the credit for having incredible stories. That’s why the second hour of the show is dedicated to extraordinary stories featuring women. These are stories that were lived and are being told with all the intensity, passion, and gravity of any of the men’s stories. I encourage everyone to listen to both hours of the show.

As the radio show’s audience grows, and we reach more and more clients through Garvens Mortgage Group, I’ll doubtless hear even more incredible stories from new individuals. Hopefully I can retell more of these stories on future shows. As always, if you have a story to tell, my line is always open, so give me a call. And if your life story has brought you to a place where you’re buying a new home or just need general real estate of financial insight, you can always give me or anyone at my mortgage company a call.

Patriots Tale Band of Brothers

Patriots Tale All About the Women

Summer is allegedly vacation season, but it hasn’t felt that way to me in years. Summer is the busy season for mortgages; kids are out of school or back from college; neighborhoods are bustling with people moving in and out. I really should start taking vacation in the winter; summer seems to be when everyone is doing everything.

The honest truth is that there is no vacation season—especially not in today’s world. Society is too fast-paced, and keeping a competitive edge means never taking a break. Naturally, some people place a high value on leisure time. They’re often the same people working below their talent level so they can go home each night without having to worry about work. If those are your priorities, great! But if not—if you regularly leave your work at work, take regular vacations, and can’t figure out why you’re not reaching your career goals—you must accept that leisure and productivity are mutually exclusive.

This is a difficult compromise considering the high value we place on leisure and down-time, and the increasing number of people we see relaxing all the time. If you’re a Baby Boomer, you’ve probably noticed an entire generation of Millennials moving back home, working less-than-full-time (if they’re working at all), and generally avoiding all responsibilities. It may seem an envious position to be in, but it’s not. Millennials may work less, sleep later, and live at home, but the plight of Millennials is dire. They’re living like bums because they have no better prospects. They’re burdened with student loan debt; consumer credit is tight; job prospects are dim; and there seems to be no relief in sight.

The student loan bubble may end up being the most disastrous credit bubble in modern history. As with all credit bubbles, it disproportionally redirects resources from some sectors of the economy toward others. The massive building booms and campus expansions seen at colleges across the country come at the expense of homes, cars, and furniture that would have been bought if Millennials hadn’t already pledged a trillion dollars (and counting!) in tuition to these colleges. Those homebuilders, car dealers, and furniture companies, in turn, can’t hire new employees (that is, Millennials) because nobody is buying their products.

See how that works?

Millennials are largely on vacation because they have no choice. But the rule still applies: leisure and productivity are mutually exclusive concepts. Millennials are so far not as productive as past generations, and they’re putting off homeownership and marriage far later than past generations as well. The decisions they’ve essentially been forced to make are having effects throughout the broader economy. Worse, there is no second chance for them: student loan debt is one of the few types of debt that is not dischargeable in bankruptcy.

There is hope, however. Many young individuals who are burdened with student loan debt are working diligently to pay it off. Many have moved back home with their parents to save money and get themselves on stronger financial footing. These are positive things and should be encouraged as much as possible.

It feels like the whole country has been on vacation since 2008. People are working fewer hours in jobs that don’t fully utilize their skill sets. Young adults are spending 6, 7, or 8 years in college. Unfortunately, this is largely involuntary. It’s this way because there are no better options. Some demographers and economists predict we will snap out of this in 2020, when the Millennials reach the productive peaks of their careers. Let’s hope they’re right. If this vacation goes on any longer, the stress might kill us!

6-21-14 Summer Vacation? What Vacation?

 

As a radio host, it’s important that I remain assiduously topical. There are times when people aren’t talking about mortgages; it’s rare, but it does happen. In such instances, it’s my duty to contribute to the topic of the day by tenuously relating it back to housing or mortgages or finance. So with last week’s hailstorm and the resulting catastrophic damage, I have no choice but to join the rest of the Pikes Peak region in talking about it.

Some hailstorm, eh?

I didn’t know this before consulting Wikipedia, but Colorado Springs is the epicenter of Hail Alley—the most hail-prone region in North America, where Wyoming, Colorado, and Nebraska meet. Although Colorado Springs doesn’t experience the same frequency of hailstorms as Cheyenne, Wyoming—ten to twelve each year—or the severity of softball-sized hail seen during tornado season in Kansas, it’s still a nuisance to deal with. As though torrential flooding and epic wildfires aren’t bad enough, God added hailstorms to the mix. If it starts raining frogs, it’s time to hightail it out of here!

Now, why are hailstorms so common and severe here? It’s because of how hail forms: tiny water droplets are forced up into the upper-atmosphere, where they collect more moisture, freeze, and then descend. Air moving across the Rocky Mountains toward the Midwest is thrust upward as it climbs over the Front Range, and the resulting hail falls all across the eastern side.

Fascinating, eh?

In retrospect it’s quite fascinating. At the time of the hailstorm and immediately after, it was terrifying, frustrating, and maddening. But a few days and several thousand dollars in insurance payouts later, I can look back at the hailstorm with intrigue and admiration. It’s an awesome force of nature, to be sure. And I’m sure every auto body and dent repair shop in the region was positively elated when the hail started smashing into their windows—as was, I imagine, every window installer, roofer, landscaper, and practically anyone who will be contacted for cleanup.

Which brings us to that tenuous link I promised earlier. This is a housing and mortgage show, and so far precious few words have been spent on housing. So here it is: Hailstorms can cause extraordinary amounts of damage, and your home’s only defense is, in fact, no defense at all: its roof. As one of the most expensive components of your home, it’s a bit like stopping a baseball bat with a Faberge egg. The damage can be immediate and lasting, so should be dealt with by a competent professional.

Every roofer and contractor I know suggests having the damage assessed by a general contractor, or a trusted roofer. Immediately after a storm, you’ll probably be inundated with advertisements for roofers. Naturally, they make money when they find damage, so of course they’ll try to sell you on a roof. A general contractor, meanwhile, will assess your roof, siding, windows, vents, and so on. Their inspection will be more thorough and will identify issues most roofers will miss.

Crucially, it’s important to have your roof’s singles inspected for damage. Typically, the worst damage comes not from cracks in the shingles’ asphalt layer, but in cracks to the fiberglass layer beneath the shingles. These need to be inspected to ensure systemic damage is not missed just because cosmetic damage isn’t evident. And all this doesn’t even begin to cover the potential damage to tile, wood, or T-lock roofs.

Your home is your most significant investment, and odds are it was just hammered by hail. It’s imperative to have your home inspected as soon as possible to ensure any damage suffered does not cause more problems, and to ensure a timely insurance claim should repairs be necessary. Most insurance companies have limits on how long after a disaster you can file a claim. This is, in fact,