September 28, 2021

MP Now News

Mortgage News

Military families cope with hot housing market | Premier

Military personnel moving to the Colorado Springs area face the same problems as other buyers and renters – escalating house prices and rents, and competition for limited units.

However, you can also run into additional barriers that make it even more difficult for military families to find shelter.

Many sellers select buyers based on factors such as their ability to raise additional cash when competitive bids drive the price of a home above its estimated value.

While some buyers moving here from higher house price states may be able to pay the difference, “people are frequently making offers above list price of $ 20,000 – even $ 40,000 to $ 50,000 – above list price said Brian Wess, Broker / Owner at Infinite Horizons Realty. “Most of the military don’t have that in reserve.”

VA loans, which are usually a strong asset for the military, “are limited to the amount that the property is valued for,” Wess said. “And if you don’t have cash to pay the difference, then that option has essentially been taken from you.”

Wess cited an example of a property he recently closed that had 40 screenings in 24 hours.

“The property was listed at the top of what we believe to be the reasonable range of values,” he said. “And the property was still selling for $ 20,000 more than the market. It was closed in two weeks with no assessment and no inspection conditions. “

VA loans require no cash or private mortgage insurance and traditionally have better interest rates than a traditional loan, said Lauren Schneider, broker / owner at Military Home Search, brokered by eXp Realty.

“Low interest rates were a reason to save,” said Schneider. But with the average home price hitting a record $ 432,095 in May, “affordability is definitely a big issue. We are all very concerned about how the market is evolving, displacing first-time home buyers and military families on active duty. “

The Fort Carson Housing Office provides a range of services to soldiers and their families, and advises employees not to leave security deposits or sign a lease until they arrive at their new location. But military families often have to negotiate new housing while a spouse is overseas, Wess said.

While technology has made the process a little easier, “it adds to the stress of moving,” he said.

RENT VS. PURCHASE

Because of the housing market, many incoming military officials choose to rent, at least initially, Wess said.

Sometimes they are able to find rental housing through what Wess calls random landlords – “Military men who have moved and couldn’t sell their house for what they had to sell it for. They offer people a home at a reasonable price. “

While the market favors sellers, buyers who have been here for only a few years can find themselves in a position “where they will be upside down in a market correction – and we will. If they end up going to sell, they are in a bad stock position. “

During the recent 2007-12 housing market downturn, Wess said he was able to negotiate about 10 short sales a year, but he wants to avoid having to do that again.

“We’re starting to see some very risky things – people buy at the max price because the demand is there,” he said.

He quoted a family who wanted to sell their house after buying it only three months earlier.

“They were supposed to be stationed here for an extended period of time, but after 90 days they got assignments that changed all of that,” he said. “This is not a common situation, but it does happen and now they have a property that they cannot sell – they would have to go short or accidentally become a landlord and rent the property.”

“When you rent the property, your VA loan eligibility is bound to some extent, depending on the value of the home and restrictions elsewhere,” he said. “If they wanted to buy a property wherever they are used, they can’t really afford it unless they can qualify for both houses,” he said. “That creates a number of problems.”

For random landlords, there are also problems with the maintenance of the property.

Wess said he advises sellers to remove as much of their personal effects as possible while still being able to live comfortably, or to pack everything up and ship it.

“Once the property has been cleaned up and painted and prepared for sale, all that interior staging isn’t necessary,” he said.

“The other thing is to make sure they get proper advice on inspections,” said Wess. “A lot of people assume that whatever the current market situation, no matter what’s wrong with it, someone will buy it,” he said. “And that’s true to a certain extent, but I usually recommend that they do a pre-screening.”

An inspection will expose any issues that could torpedo funding if the home does not meet the VA minimum ownership requirements, which guarantee military families a safe, structurally healthy, and sanitary place to live.

The housing market is highly competitive in every price range, said Schneider. Regardless of whether they are military buyers on active duty, enlisted men, officers or retirees, everyone “feels the pressure”.

But for people on active duty trying to stay within their Basic Housing Pension, “it is very difficult to find a mortgage payment that really fits into their BAH,” she said. “We often see that maybe two veterans make a purchase together, or the first purchase is a townhouse or something more affordable, and then a few years later we see buyers moving up.”

Schneider said she and several of her agents are certified as military relocation professionals.

“Basically, we’re making sure we understand the jargon, what it means to use a VA loan, what its limitations are, and everything the military buyer has to do with,” she said.

In addition to maintaining a website, her company helps military families connect to community resources.

“It gets very personal when you get to know families and go home with them,” she said. “In the end, we often recommend kindergartens and day-care centers as well as paediatricians and dentists. We’re just trying to be the local experts for these families. “

Although military facilities like Fort Carson often go through troop adjustments, “it hasn’t really had a negative impact on our market,” Wess said. “Even during the last downturn, we were less affected than other areas of the country that had over-inflated markets.”

But Wess is concerned about the current overinflation in home prices.

“The lead we saw with the values ​​is neither sustainable nor healthy,” he said. “It’s fine for salespeople in the short term, but there will have to be a fix for long-term health.”

“Long-term real estate is a safe investment,” said Wess. “But our average sales here in Springs are every three to five years – much faster than the national average, which is every five to seven years.”

Schneider added, “Yes, prices have gone up dramatically, and yes, we’re all nervous about affordability. But interest rates are still at a record low and that has kept it all going. The second we see these prices rise, it will be a different story. “

POSTAL APARTMENT OFFICE

Often times, the first call a military member relocates is to the housing department at the new location to see if postal housing is available, said Wess, who volunteers at the postal housing department about once a month.

“Fort Carson usually has a waiting list,” he said. “We’re there to provide the off-base housing advice on what’s on offer in the area in terms of renting or buying.”

Fort Carson gave written answers to that Business journals Inquiries about the services it provides arriving soldiers through its housing department.

All arriving soldiers receive instructions, which they forward to the housing office for assistance with processing.

“Fort Carson and the 4th Infantry Division are holding a newcomer briefing for soldiers and families every week,” Fort Carson officials said in an email.

An online briefing will be provided on Fort Carson’s Facebook page for those who have not yet arrived.

At these briefings, “The Fort Carson Housing Office Managers provide information about local rental and home purchase conditions. After the meeting, the apartment managers are available for questions and assistance. “

In addition, Fort Carson soldiers will be assigned a sponsor prior to their arrival to facilitate the transition to Fort Carson and the local community.

The basic allowance for housing is intended to cover 95 percent of the median rent and average ancillary costs in a specific geographic area.

“BAH prices are based on local [rental] Data that is collected in the spring of each year, recalculated and allocated to the military every January 1, “officials said. While military personnel do not need to find an apartment or house for that amount, “rising house and rental prices are affecting military families as, in general, those who choose to rent a home on a 5 percent contribution basis have a cost” Expenses that are over 5 percent. “

Fort Carson Family Homes is working with Fort Carson to operate the post accommodation and maintain waiting lists for subordinate officers, subordinate officers, senior officers, junior officers, field officers, and senior officers.

“Each category is further divided into two, three, and four bedroom homes. Fort Carson has no one- or five-bedroom houses. … Our most popular homes with the longest waiting lists are three and four bedroom homes for our junior families, ”officials said. “Many of our younger registered families prefer life on the post to life off the post, which results in longer waiting lists.

Fort Carson officials said the Housing Office and Fort Carson Army Community Services provide basic information about loans but do not direct service members to specific banks or mortgage companies.

They also found that the Fort Carson Housing Office works with the other three military housing offices in Colorado Springs “especially when it comes to a family with exceptional or urgent needs.”