Some Foresee Profits in Military Cutbacks : Bases: Even as some installations are closed, personnel are moved to other bases. Around these, some properties might make good investments.
When the Bush Administration announced a plan to close as many as 86 military bases across the country by 1995 as part of a general reduction in the nation’s military budget, communities near those bases prepared for the worst.
Proponents of the base closures say there are big benefits, most notably the “peace dividend,” although the payout of that may be held up or even canceled by the events in the Middle East.
But a study released recently by a major real estate company shows the base closures may bring an immediate and possibly permanent boost to housing markets in areas where bases will take on additional personnel being transferred from installations that are closed or trimmed in size.
That could mean investment opportunities for people interested in buying housing to sell or rent or for those looking for commercial properties, such as restaurants, convenience stores and Laundromats, that could serve the needs of a swelling military population in a particular area, said Monte Helme, vice president of public relations for Irvine-based Century 21 Real Estate Corp.
According to Pentagon estimates, during the next five years about 26,000 Army, Navy and Air Force active-duty personnel will move themselves and their families from bases facing the budgetary ax to sites where the military plans to maintain full-size contingents.
Combined with the probability that the Pentagon will decrease spending for on-base military housing, that means a strengthening of real estate markets near bases that will get infusions of personnel, Helme said.
Based on a survey of its nationwide network of real estate offices, Century 21 came up with a list of 26 installations identified as having strong real estate markets that will get even better as more troops move in.
The installations with the five biggest gains in personnel are the Army’s Ft. Belvoir in Alexandria, Va., with 3,606 new soldiers by 1995; March Air Force Base near Riverside, with 3,420; Pearl Harbor Naval Station in Honolulu, 2,297; Idaho’s Mountain Home Air Force Base, with 1,949; and the Fort Devens Army base in Ayer, Mass., which will gain 1,420.
Other bases benefiting from the personnel transfers are scattered across the country, from Ft. Jackson in Columbia, S.C., to the Everett Naval Station on Puget Sound north of Seattle.
Helme said the top 26 sites resulted from “culling out where the transfers were going and identifying those bases as possible opportunities for real estate investors.”
“It occurred to us that if a base was in a small metropolitan area or a small town and was going to gain 2,000 or 3,000 people over the next few years, that would put a real squeeze on housing stock,” Helme said.
What investors seek in the various markets depends on factors such as the base’s impact on an area and whether a community has a diversified economy that can withstand fluctuations in a base’s population, said Steve Carter, director of special services for Century 21’s Northwest region.
For example, Mountain Home, Ida., is a small town that virtually lives and dies by the activities of its namesake Air Force base. The arrival of almost 2,000 new airmen will be a boon and will undoubtedly drive up prices of homes, which this year are averaging in the $65,000 to $78,000 range.
But the flip side is that a future decision by the military to move personnel out again could devastate the area economically. Therefore, military personnel are much more likely to want rental housing they can get out of quickly.
