Fort Meade BRAC - Information update September 2009

Fort Meade BRAC is undoubtedly the hottest topic affecting Anne Arundel County real estate in 2009.  Despite all the buzz it is very difficult to find one source that provides the answers to the most asked questions which are:

(1)    How may people/jobs will be coming to Fort Meade as a result of BRAC?

The answer is 5,400 which includes 4,300 DISA military, civilian, and contractor personnel.  While I've seen huge numbers bantered about on other real estate web sites and BLOGs (up to 30,000) that larger number takes into account all Maryland BRAC transfers...the bulk of which are going to points north of us including Aberdeen Proving Grounds.   

(2)   When will the new employees be arriving?

DISA which makes up the bulk of this transfer at about 4,300 employees is scheduled to begin arriving in 10/2010 through 07/2011.   See the "count down to Fort Meade" ticker on the DISA webs site. It is also expected that in addition to the 5,400 people there will be 4,900 family members.   One year notice to transfer is required and those notices should be going out begining in October 2009.

(3)  How will this affect the Fort Meade real estate market?

This one is difficult to assess, but I'm going to use numbers I've gathered from the Fort Meade and DISA web sites to make some projections.  First I'll be using the combined DISA and other agency total stats for  new jobs/employees of 5,400.  Then I'll be using data from the DISA site which outlines how many employees plan to transfer their homes here and how many plan to telecommute or commute from their existing locations.  I'll be applying the DISA percentages to the total stats for new employees/jobs to come up with some workable data. 

• The DISA website reports that 58% of their employees or 3,132 plan to follow their jobs to Fort Meade.
   
• Of those existing employees who are following their jobs to Fort Meade 63% or 1,973 people plan to commute or telecommute from their current locations in VA and NJ and will not affect our housing market.  I am removing those numbers from the total of 5,400.
   
• That leaves approximately 1,159 employees who have committed to a relocation and will need housing in the Fort Meade real estate market.

• That leaves 2,268 jobs (almost half) to be filled by the local economy or transfers from other areas.  This piece can't really be calculated at this point but my assumption is that much of this will draw from the existing Baltimore/Washington pool of qualified employees who already live within commuting distance to Fort Meade.  At the end of my assumptions I'll be doubling the volume to try to work these folks in on a best case scenario basis.
   
• These known transfers will alll take place during a very consolidated time frame between October 2010 and July 2011 though we can plan on that time frame to slide in keeping with goverment timelines but remain consistently at 9 months whenever it hits.

Working from the known transfers of 1,159 people (above) who will for sure be moving here from other areas let's get aggressive and say that show 30% or 347 of these employees will be renting a home and 70% or 811 will be purchasing a home.   That gives us an increase in demand for real estate in the Fort Meade area of about 38 renters per month and 90 buyers per month over the 9 month period  between November 2010 and July 2011. 

While these 811 new home buyers have the potential to affect all 4 counties near Fort Meade, we can again assume that the majority of them will be focusing on home purchases in Anne Arundel and Howard counties. So using aggressive stats lets say that 90% or an estimated 730 home buyers will purchase equally in Anne Arundel and Howard counties.  That would mean that we would have an increase in buyers of about 365 per county or... an increase to Anne Arundel county of about 8% of the annual sales volume and a  14% increase in the sale volume to Howard county.  These increases will take place in a very consolidated 9 month period probably between 2010 and 2011.

Now let's work in the 2,268 "unknowns" created by DISA employees who will not be following their jobs to Fort Meade.  My assumption above is that they will fill those jobs locally.  If not, I'd say we could easily double the numbers above to provide a short burst of sales activity that would give us an increase in the volume of homes sold in AA County and Howard Countyy of 16% to 28% for a 12 month period covering late 2010 to mid 2011.

Now let's compare that to our current inventory of available homes priced between $200,000 - $700,000 which is currently at 2,600 in Anne Arundel County and 975 in Howard County.  Those 365 buyers per county could certainly have a stabilizing affect on supply, but not enough to balance the scales of supply and demand to where we would see an increase in prices.

*  This existing inventory will also be increased by (1) a large/huge audience of homeowners who are poised and ready to place their homes on the market for sale "when BRAC hits" and (2) an increase in inventory via foreclosures and short sales.

The bottom line is that if you are waiting for BRAC to hit to sell your Fort Meade home do your home work.  Check the stats and don't rely on word of mouth.  I have worked with many home owners who decided two years ago to wait for BRAC so their home would be worth more.  They are now at an average loss of home value between $50,000 - $100,000 and the numbers are still declining.  If you plan to hold your property as a rental investment long term you're probably on the right track.  If you are waiting for BRAC to raise property values to pre-2005 levels I'm not optimistic.  We've had the hottest market in 4 years in 2009 and well priced and prepared homes are selling in days not months.  Buyers are taking advantage of the $8,000 tax credit, low interest rates and stabilizing property prices to buy before the end of the year.   Visit us on-line for additional information on homes for sale and homes for rent near Fort Meade, MD.

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