If a military family bought a home with a conventional loan (not subprime) as the subprime crisis was building, the military family will be hurt more than their neighbors. The primary reason is that servicemembers will be transferred on a regular basis. When home prices increased it was not a problem. Knowing that you would be transferred somewhere else in three or four years was a given. What happened from 2006 through today was a shock to everyone. However, as home prices drop everyone must wait until the market turns around. Servicemembers cannot wait.
The problem worsened as the number of foreclosures continued to rise. Those homes compete with your house and mine for market share. If there are a lot of foreclosures in your area they cannot be ignored in a comparative market analysis. Otherwise, CMA’s tend to ignore the foreclosures if possible. Statistically foreclosures are outside of the mean, median, and norm. For servicemembers the number of months they must own a home to avoid selling at a loss is longer than the time they will be around. Nothing strains a military family’s budget like owning a home in one location when they live elsewhere. Remember, many are transferred to other countries where the exchange rate and cost of living can be much higher.
(The author of this article spent 25 years in the Marine Corps)
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