The Housing Bubble and the Military
It occurred to me that military people will be hit especially hard during this housing downturn.
Thanks to housing privatization, the supply of base housing is being greatly reduced, so more military people have been buying houses the last few years. Military people are conservative (poor) by nature, and we tend to use fixed rate VA loans, with very little down. Unfortunately, we are also subjected to mandatory military moves, so when we need to sell, we need to sell. Add to this that many bases are located in huge bubble areas (3 AF bases in Fl, Nellis AFB in Las Vegas, 2 AF bases in AZ, etc...).
I already know of a few people who are hurting because they can't sell their house. There is added stress because a foreclosure looks bad on the military member, and the hit can affect their security clearance.
I am predicting that this will become a major issue in the military in the next few years. For the record, the military will not buy your house, unless it is a result of a down market caused by a base closure. On military moves, we are on our own.
9 comments:
A friend who's a realtor -- and who knows we're not in the market to buy another house -- told me when I asked that housing prices and sales are both up here. Then, this is an area with reasonable housing prices (median home is around 160K) and an equally reasonable cost of living.
160K sounds like a reasonable price for a home, but here in LI you can barely touch anything below 400K. Cross the Queens border and it's closer to 600K. And I'm not talking about anything more than a 3 bedroom basic.
I'm sure this is a problem for military families, but they're not alone. I wonder, in fact, how not only military families but any working family buys a house these days.
Perhaps it's not so bad where you are, but it's awful here.
Come to Pennsylvania!
I was born in PA, Pittsburgh be exact. sorry, off subject.
Another problem is the plummeting dollar, which makes it attractive for foreigners to buy and keep prices up. Not a good thing for Americans, if you ask me.
Exactly right nyc...
We depend so much on imports.
Expect inflation.
I am investing in dollars.
As a military spouse in the very situatuion that you all are refering to here I really want to comment. When we bought our house in Colorado Springs the housing market was still in the boom. We were very concerned about buying a house knowing that we could receive orders anytime no matter what the AF said. It turns out we have been here 5 years. We bought a house based on alot of research and advice from people with experience.
Now we have orders to move. We put our house on the market as quickly as we could after receiving the orders. The waiting game began. My husband's report date came and he went. He is living in a pop-up camper in the family camp on base so we are able to save a little money there but it is very draining-financially and emotionally.
We did not buy our house to flip. We bought a conservatively priced house in a nice enough neighborhood.
I am offended by the idea that we are poor dumb kids who didn't do our research and have over-extended ourselves financially.
Yes we do get a housing allowance but if you consider that in the civilian sector my husband would make almost twice as much as he does in the military it really is just another form of pay for us.
anon,
Do not be offended... I just recently bought and sold a house (at my last assignment).
The point of my post is that us military are going to be some of the biggest victims of the downturn. We buy out of need and sell out of neccessity.
Hopefully you have a good realtor. You should have a little bit of equity after 5 years. If your house is presented well and price right, it will sell. Just be careful not to chase the market down.
I just tried to warn my boss not to buy a house here in Anchorage... he insisted that "Anchorage was different" and he got a good deal.
Myself... I am happy to live in base housing, saving a little money, until I retire, which should be right about the time the market bottoms out.
How long has your house been on the market?
We're in the same situation in Anne Arundel County Maryland. We bought 4-1/2 after lots of research and consultation with good financial advisors. We will move in Spring '09 and see every likelihood that we could face a serious loss. Government civilian employees have the option to sell their homes, at prevailing rates, to the government if they can't sell within a couple of months of a government move. Military members deserve a similar benefit. I'm going to write congress regarding the issue and request that readers of this blog do so as well. Thanks!
Post a Comment