market update
Virginia market began its decline sooner than the rest of the region, but also started recovering first.
By John McClain, Senior Fellow and Deputy Director, George Mason University Center for Regional Analysis
The Region’s Economic and Housing Market Recovery:
Riding the Federal Presence Wave t
he Washington metropolitan area and the northern Virginia region experienced a recession from 2008 to early 2010, but its impacts were not nearly as severe as elsewhere in the country. the metro area and northern Virginia are now adding jobs again, and recovery is underway while most other metropolitan areas are still in negative territory.
The region’s economy was affected by the same factors that caused the national and international recession – which was more due to a collapse of the financial system, some of which was exposed by the housing market. A key reason the economy and housing market here are recovering from the downturn ahead of the curve is the presence of the federal government. The main contributor is its procurement spending and hiring of more federal workers. As measured by jobs, the region entered recession in November of 2008 (one year after the national economy). Job growth began again in April of 2010 and appears to be gaining some momentum.
Importance of the Federal Presence to the Recovery That the federal government is important to the region’s economy has always been known. After all, this region primarily exists because of the decision more than 200 years ago to locate here (above the objections of politicians in Philadelphia and New york). Federal employment grew significantly in the 20th century as did the Washington region.
For the region, this recession has been similar in depth to the recession of 1990-91, with annual job losses hitting bottom at about 70,000 in September of 2009. The housing market dropped significantly too, but again, not as much as nationally. House prices and sales are now recovering, and not just due to the home buyer tax credit. Prices have been increasing in Northern Virginia since late 2009, and sales have been increasing for longer than that. The Northern 12
September /OctOber 2010
NVAr reAltOr® UPDATE