Friday, January 25, 2008

Guess so...

Last week I had sent an email to the Air Force Times asking if they were going to do a story on the housing meltdown and the military.

I am wondering if there is a story in the Military and the Housing Market, especially in regards to Luke and Nellis AFB. Las Vegas and Phoenix have posted some of the largest drops in home prices in the last year. Military members are particularly susceptible to foreclosure, because they are often forced to sell due to a PCS. With a nationwide drop in the housing market predicted, this is going to spread to more and more bases. Here are two references from my blog.

Legislation to Help Military Veterans Survive the Subprime Mortgage Crisis Mortgage Foreclosure & Refinance Resource

House Committee on Veterans’ Affairs Chairman Bob Filner (D-CA) on December 19, 2007 introduced a pair of bills to address the needs of veterans during the ongoing subprime mortgage market crisis.
Well in the latest issue of the Air Force Times their are four stories on the subject. They are behind subscription walls, but here are some quotes from them.

Rep. Bob Filner, D-Calif., the House Veterans’ Affairs Committee chairman, believes the VA loan program needs changes.

He wants the maximum VA loan increased to $630,000 and applied to new and refinanced loans. And he wants loan fees, which now range from 1.25 percent to 3.3 percent of the loan value, to be capped at 1 percent.

“The current VA home loan program is irrelevant because fees for the loans are too high and equity requirements are overly restrictive,” Filner said.

He also wants to expand the Servicemembers’ Civil Relief Act so that National Guard and reserve members called to active duty are protected from foreclosure for up to a year after their mobilization ends — on all mortgages, not just those from the VA.

His proposals are included in bills HR 4883 and HR 4884, introduced Dec. 19.

and this...

But some of the states hit hardest by home foreclosures and mortgage delinquencies, such as Georgia, California, Florida and Ohio, have large military populations. And it’s not just subprime loans that are getting people in trouble.

Ripple effects

A sailor in San Diego who bought a home for $417,000 two years ago using a loan backed by the Veterans Affairs Department now finds that his home is worth $317,000, said Keith Kaufman, personal financial management program manager for the Fleet and Family Support Center for the Navy’s Southwest Region.

That means the sailor is upside down on his loan — he owes more than the house is worth.

and of course they covered this:

Foreclosures negatively affect a person’s credit rating — which can affect service members’ security clearance and harm their careers, he noted.
All points I have mentioned before. Now when is CNN going to pick up on it.

parentalcation: And it starts:

parentalcation: The Military and the Housing Market Prediction

parentalcation: The Housing Bubble and the Military

Monday, January 21, 2008

If pissing off Rush Limbaugh isn't enough of a reason to support John McCain, how about the fact that his daughter and her fellow "bloggettes" are hot.

BLOOD ON THE STREET: Manhattan meets reality


A trader at the New York Stock Exchange could not name a Wall Street firm that did not cut staff this week. Many swung the ax all right - handing out pink slips even as bonus season failed to lighten the dark mood.

I wonder what this will do to the Manhattan housing market? Oh thats rights, there are boat loads of foreigners just dying to buy the vacant properties.

Saturday, January 19, 2008

And it starts:

Legislation to Help Military Veterans Survive the Subprime Mortgage Crisis Mortgage Foreclosure & Refinance Resource

House Committee on Veterans’ Affairs Chairman Bob Filner (D-CA) on December 19, 2007 introduced a pair of bills to address the needs of veterans during the ongoing subprime mortgage market crisis.
H.R. 4883 will prohibit foreclosure of property owned by a servicemember for one year following a period of military service.
“For many of our returning servicemembers and veterans, the stress of what they have gone through in war is still prevalent when they return home,” continued Chairman Filner. “Unfortunately, for many of these heroes, subprime loans are the only option when they do not have the best credit score, and more often than not, their low credit score is a direct result of their service to our country."
Winston-Salem Journal Military families among those hit with home foreclosures
FAYETTEVILLE, N.C. - The number of defaulted home mortgages in the state has risen sharply in recent years, and about a third of foreclosure auctions in the Fayetteville area have involved active-duty military families or veterans.
Military members are going to be particularly susceptible to the housing crash because in many cases they will be unable to wait it out, and be forced into a position of having to sell, due to mandatory military moves.

Anchorage Real Estate: 2007 Annual Homes Sales Data Published

Anchorage Real Estate: 2007 Annual Homes Sales Data Published:

The headline numbers are that the average price of a home in Anchorage rose 3.75% last year, notwithstanding a 10.3% decline in total residential sales. Only high-end homes, above $750,000, are experiencing excessive market times. Those sellers are in the process of adjusting their expectations.

The gap between final listing prices and ultimate selling prices has widened to 1.75%. That figure does not, however, reveal what I believe is a pattern of larger below-the-top-line concessions like seller-paid closing costs and builder upgrades. Nor does it break out market performance by quarter for last year, which probably would have shown a weaker market in the fall and early winter than the first half of the year.

Niel Thomas here is referring to this story, Home sales to remain slow, in the Anchorage Daily News.

I am slowly learning to read between the lines. Niel Thomas is a Realtor who has no incentive to downplay the market, so we must take his slightly bearish remarks as evidence that the market isn't all peachy keen.

I wonder if he would say if "now is a good time to buy"?

As I have mentioned, I know three people who have purchased homes in the last two months. All of them will be force to sell in at least the next four years when their tour is up. At least they aren't stationed in Las Vegas or Phoenix.

Wednesday, January 09, 2008

Young people and voting

I was listening to NPR on the way to pick up my daughter from daycare this evening, and there was a story on young people and what motivates them to vote.

The women who was being interviewed argued that young people are only motivated to vote if their is an issue that they care passionately about.

This might be true to a degree, but I also think there is a "pied piper" effect. In other words young people are more likely to be motivated by charisma. Not John Edwards or Mitt Romney pretty boy charisma, but real charisma. I don't know how to define it, but I know it when I see it. McCain has it, so does Obama.

Friday, January 04, 2008

The Military and the Housing Market Prediction

The housing crash is going to hurt everyone, but the military is going to be especially hit hard.

1. Because of frequent moves, military members are much more likely to have purchased their house in the last few years during the height of the housing bubble.

2. Because of the availability of 100% financing through VA loans, military members have less built in equity.

3. Because of the nature of the job and assignment changes, military members are under a lot more pressure to sell quickly than civilians.

Perhaps the only thing that military members have going for them is the fact that we tended to stick to traditional fixed rate loans.

Prediction: We will see several national media stories focused on military victims of the housing market in Las Vegas and Phoneix.
p.s. I think I am upsetting people at work. Several people I work with have recently bought homes, and it is amazing how uniformed they are about the market and the risks of a decline in prices. The only advice most of them got was from their relators... not exactly unbiased advice.

Alaska Real Estate, Anchorage

Alaska Real Estate, Anchorage, Juneau, Fairbanks, Sitka:

"Anchorage is easily the state’s largest urban center with nearly half of the state’s population. Housing sales have slowed like the over-whelming majority of the country, and Anchorage is projected by Housing Predictor to see deflation of 4.1% in 2008. The market boomed for a while, but not at double digit levels like in other areas of the nation."
It's hard to find independent analysis of the Anchorage housing market, but I did come across this. Thank god I am renting.