Fayetteville, North Carolina (PRWEB) May 25, 2017
A change in home prices can ruin a military family's financial position. Andy May, COO AAFMAA Mortgage Services (AMS) explains how to prepare for and understand local market changes in home prices. After thirty years of forecasting real estate markets, a handful of variables may describe future advances or declines in market value. Many pundits want to make it complicated when it's really quite simple. Andy May explains the top three variables that effect home prices in local markets.
The first, and the primary factor to consider is employment growth. Since the 1990's this factor has been the number one correlated variable to home price changes in the majority of markets in the United States. Modeling (simple regression) illustrates that the first difference (change) in employment is a good place to start. Many military families move a lot. Military families don't always get to stay in the local market for long periods of time (ten years- which is now one cycle). Military families may miss the full real estate cycle, and therefore be subject to a more random change in family finances due to changes in the military family's home price (the largest investment for many).
Studying employment changes, investment in local communities by government and the private sector, and most importantly the military family's own employment future stability (selling under financial stress isn't a great investment) are important predictors of home value. If the military family has to sell quickly due to job loss, this will hurt the value received from a home sale (a distressed sale, or worse - a foreclosure).
The second, often overlooked, area of home price change may be traced to severe weather. Many families overlook severe weather and acts of God. When reviewing a local area and understanding home price appreciation potential, a military family should investigate the probability and severity of an earthquake, flood, hurricane, 100-year freeze, etc. Military families should review carrying costs of the home, which include homeowners insurance and other dwelling coverages, HVAC system life- cycles and costs, as well as other factors such as fracking, public easements, etc. Certain coastal areas that are prone to flooding or potential hurricanes sell at a steep discount to peer cities that do not share severe weather risks.
The third area for home price appreciation or depreciation can be traced to government influences. Certain states are considered business friendly and attract business. Other states are high-cost and high-tax and push business away. While this may not have an immediate effect on a well-diversified city (like New York), it will have a significant effect on home prices if the largest employer moves (or is acquired and relocated) to a more business-friendly climate. Understanding employment concentration in a city is important, particularly in declining industries.
Military families can get the most value out of a home sale or purchase by working with unique tools like the AMS mortgage calculator, the AMS Relocation site, and experienced state-licensed mortgage professionals.
Andy May further stated, "You owe it to yourself to explore rate and cost options. You are your own best advocate for getting the best mortgage product. We are here to serve your financing needs at a very competitive rate."
Competitive, accurate, honest, transparent, and member-owned. Experience the difference at AAFMAA Mortgage Services. AAFMAA Mortgage Services LLC is licensed in the states of Connecticut, Florida, Maryland, North Carolina and Virginia. (NMLS: 1423968).
The team operates from 639 Executive Place, Suite 203, Fayetteville, North Carolina 28305. Call 844-422-3622 (844-4-AAFMAA), email mortgage(at)aafmaa.com or visit the website at http://www.aafmaa.com/mortgage to reach AAFMAA Mortgage Services. Equal Opportunity Lender. Lender NMLS: 1423968. 103418 Loan Officer number for Andy May.