Real estate thrives near military bases

CLARKSVILLE, Tenn. — Sometimes Tim Wells felt like the only man left on his street.

Thousands of soldiers were deployed out of Fort Campbell, just a few miles away, and homes in Wells' subdivision were sitting empty. But a few months later the soldiers began to return, and, one by one, the homes were quickly purchased.

"They all started selling, boom-boom-boom, right down the line, as people rotated in," said Wells, who was a civilian contractor working on the base. "It was a pretty clear pattern."

While overall national home prices and sales are down, there are pockets in the U.S. doing well. Among them are military towns dominated by big bases, helped by steady wartime employment and by more moderate increases in values and less reckless lending than many boom areas saw during the bubble.

The Associated Press reviewed housing data in four states with big military bases and found that nearby communities fared better than national averages. Some towns have even seen average home prices rise, bolstered by increased recruitment and steady defense-related employment during the wars in Iraq and Afghanistan.

Even where prices are down, the bases still help provide plenty of people looking to buy. In the Florida Panhandle, where a saturated housing market saw sluggish sales last year, soldiers at Eglin Air Force Base said the downturn has made it easier for them to purchase homes in an area where demand is bolstered by Gulf Coast beaches.

The AP looked at sales figures from selected smaller communities near large bases in the Southeast, which has a major military presence, and in North Dakota, away from the balmier climates that might attract new residents.

Clarksville prices climb

In the case of Clarksville, the largest city near the sprawling Army post that straddles the Tennessee-Kentucky line, more than 30,000 soldiers assigned to the base rotate in and out regularly. Many come with families in tow or return from a deployment looking for a quiet place to call home in or around the city of about 113,000.

When Wells got a job transfer, he had no trouble selling his home and closed on the deal in August.

"From the time we listed it, we got an offer in eight days," he said.

Not bad, considering the National Association of Realtors estimates that nationally it will take nearly 10 months at the current rate of sales to work through the entire housing inventory.

Average home prices in the U.S. fell a record 4.8 percent in the second quarter compared with a year ago, with some areas like California and Nevada falling between 14 percent and 16 percent, according to the Office of Federal Housing Enterprise Oversight. It uses data from Fannie Mae and Freddie Mac and includes more than 5 million repeat sales transactions.

But in Clarksville, the average sales prices for single-family homes increased about 6 percent, from $139,065 to $147,460 in the second quarter of 2008 compared with a year ago, according to the Clarksville Association of Realtors.

Military communities haven't totally avoided the problems in the housing market, and on average it's taking longer for home sellers to find a buyer. In Clarksville, homes sat on the market for an average of 96 days in the second quarter of 2008, compared with 65 days a year ago.

Valerie Hunter-Kelly, a Clarksville real estate agent whose husband is retired from the Army, caters to clients who are mostly Army families that move to the area.

"We have a fantastic market here," she said. "I do networking with agents across the country, and we are very fortunate to have the market we have here. Our average sales price is actually going up."

Squadron move helps Minot

In Minot, N.D., a city of about 37,000, Bruce Walker from Coldwell Banker 1st Minot Realty says home prices have risen in the past year in part because of the relocation of a B-52 bomber squadron to Minot Air Base. Average home sales prices rose 6 percent in the second quarter from a year earlier to $138,397 and in August were 10 percent higher than in August 2007.

While other markets tanked after homeowners took subprime loans that they couldn't afford, active and retired members of the military can use private loans guaranteed by the Department of Veterans Affairs. More than 90 percent of VA loans don't require down payments, said Judy Caden, director of the loan guarantee service.

"Right now, we are the only program left that provides the no-down-payment feature, except for some localized programs," Caden said.

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