Rental Trends Reverse as Rents Rise and Interest Rates Remain Low

As the country’s military forces continue to contend with draw downs, relocations and realignments, ERA Real Estate has uncovered some emerging trends among military homebuyers in a number of markets across the country.

From Florida to Colorado to California, each military market has its own distinct drivers, from rental activity to new home construction to time on market. Low interest rates and declining inventory – factors at play in many non-military markets across the country – are affecting military markets as well.

Most notably, fewer people are renting in many military markets as rising home prices increase home equity for homeowners who may have previously been under water on their mortgages and were unable to purchase after relocation.

“In many regions across the country, a classic supply and demand scenario is creating a seller’s market but the impact of increasing prices on home equity is benefiting potential buyers as well,” says Charlie Young, president and CEO of ERA Real Estate. “This includes military housing markets which, like most of the nation, are seeing prices rise as inventory declines. Renting – previously a safe option for military personnel who move frequently – is giving way to buying as rents rise. We are finding that in many markets, military clients are seemingly more willing to purchase than they were a year ago,” said Young.

This analysis marks the second time ERA Real Estate has delved into nuances of military markets. Last year’s report revealed that military markets were not immune to the broader macro-economic pressures playing out at the time across the entire industry including price declines, negative equity and tighter lending standards. As a result, rental activity was high, a trend that appears to be reversing in 2012.

For more information, visit www.era.com.