NVAR’s 14th Annual Economic Summit

September 16, 2010

The Outlook for theWashington Area Economy

Stephen S. Fuller, PhDDirector, Center for Regional Analysis

School of Public PolicyGeorge Mason University

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Washington MSA Leading Economic IndexMonth-Over-Year Percent Change

15 Largest Job MarketsJob Change July 09 – July 10

New York

Los Angeles

Chicago

Dallas

Philadelphia

Houston

Boston

Miam

i

Atlanta

Detroit

SF-Oakland

Minneapolis

Phoenix

Seattle

-100-80-60-40-20

020406080

100(000s)

Washington + 41,800

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Annual Job ChangeWashington MSA

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

-100

-80

-60

-40

-20

0

20

40

60

80

000s Annual Data Annual Month over Year

2008 2009 2010

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Annual Job ChangeNorthern Virginia

2002

2004

2006

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

Sep

Nov

Jan

Mar

May

Jul

-40

-30

-20

-10

0

10

20

30

40

50

60

000s Annual Data Annual Month over Year

2008 2009 2010

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Job Change by SectorDec 2007 – Dec 2009

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

-40 -30 -20 -10 0 10 20 30 40

-4

-5

-8

-13

-11

2

-37

-3

-23

-4

13

24

-9(000s) Total - 79,300

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Job Change by SectorJuly 2009 – July 2010

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 30

0

1

-3

-5

-3

3

-5

12

12

-7

4

20

14(000s) Total 41,200

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Job Change by SectorJuly 2009 – July 2010

Northern Virginia

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 30

0

-1

-2

-4

-1

3

-7

10

7

-1

7

7

4(000s) Total 22,700

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Unemployment Rate

23456789

1011

%

Source: BLS, Not Seasonally Adjusted

U.S.

Washington

9.7

6.3

5.2

Northern Virginia

15 Largest Job MarketsRanked by Unemployment Rate

July 2010

Washington

Minneapolis

Boston

Dallas

Seattle

Houston

New York

Phoenix

Philadelphia

Atlanta

Chicago

SF-Oakland

Miam

i

Los Angeles

Detroit

02468

10121416%

US 9.7

Source: BLS, NOT Seasonally Adjusted

6.3

Housing Market Trends

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0

2000

4000

6000

8000

10000

12000

14000

Existing Home SalesWashington MSA

Through August 2010

12-Month Moving Average

Northern Virginia

Percent Change in Inventories of Existing Homes

Month-Over-the-Year-Change2000 – 2010, MSA

2000

2000

2000

2001

2001

2002

2002

2002

2003

2003

2004

2004

2005

2005

2005

2006

2006 july

dec

May oc

tM

arA

ug20

10 Jun

-40

-20

0

20

40

60

80

100

120

140Jan-May, 2006 >100 %

Source: MRIS, GMU Center for Regional Analysis

%

Aug = - 0.3%

Total Active Listings Per SaleAugust Each Year

19992000

20012002

20032004

20052006

20072008

20092010

0

5

10

15

20

25

LDN

PG

FFXARL

DCMONT

PW

Source: MRIS, GMU Center for Regional Analysis

Average Sales Price Percent ChangeWashington MSA

All Housing Types

20002002

20042006

AprOct

AprOct

AprOct

Apr

-30

-20

-10

0

10

20

30

6

111414

2022

2 2 2 2 1 1

0

64

0

0 -2

0

-9

-5

-12-11-13-13

-16-17

-23

-18

-23-25

-24-26

-20-18

-14

-10-9-7

0

-4

3

96 6

46

5 47

5

%

Source: MRIS, GMU Center for Regional Analysis

Annual Change Annual Change by Month

2007 2008 2009 2010

Average Sales Price Percent ChangeNorthern Virginia

All Housing Types

20002002

20042006

AprO

ctApr

Oct

AprO

ctApr

-40

-30

-20

-10

0

10

20

30

5

101414

2223

1 1

-1-1-3-1-2

1 2 1

-3-5-4

-15-12

-18-17-19-20-22

-25

-32-28-29-30

-28-28

-22-19

-12

-8

-2-1

9

5

11

1519

161716

12119 9

%

Source: MRIS, GMU Center for Regional Analysis

Annual Change Annual Change by Month

2007 2008 2009 2010

20

03

20

05

Fe

b

Ap

r

Jun

Au

g

Oct

De

c

Fe

b

Ap

r

Jun

Au

g

Oct

De

c

Fe

b

Ap

r

Jun

Au

g

Oct

De

c

Fe

b

Ap

r

Jun

Au

g

Oct

De

c

Fe

b

0

10

20

30

40

50

60

70

New Housing Contract Kick-Out RateWashington Metro, All Housing Types

% 2006 2007 2008 2009 2010

Source: Hanley Wood

Housing Sales, Actual and Forecast to Sept. 2011

Metro Area

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

0

200

400

600

800

1000

1200

Housing Sales, Actual and Forecast to Sept. 2011

Northern Virginia

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

0

100

200

300

400

500

600

700

Economic Forecast

Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions

(Annual % Change)

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

-2

-1

0

1

2

3

4

5

6

7

%

DCSMMSANV

Source: GMU Center for Regional Analysis

Employment Change bySub-state Region (000s)

2007 2008 2009 2010 2011 2012 2013 2014

D.C. 5.3 10.1 -0.7 6.2 7.2 6.7 7.2 7.3

Sub. MD 4.8 -1.4 -26.7 9.3 9.7 11.1 13.3 14.7

No. VA 13.2 4.4 -24.5 16.7 20.4 26.5 28.3 29.9

REGION 23.3 12.9 -51.9 32.2 37.3 44.3 48.8 51.9

Average Annual Change 1990-2008 = 37,000

Source: BLS, GMU Center for Regional Analysis, 2009-2014 based on 2010 Benchmark data from BLS

2000

2002

2004

2006

2008

2010

2012

2014

-4

-2

0

2

4

6

8

%

Source: Global Insight, GMU Center for Regional Analysis

GDP/GRP 2000 - 2015

Washington

U.S.

Policy-cra.gmu.edu