Washington Area Economy and Housing Market: Performance and Outlook NVAR Economic Summit September 13, 2018 Donna Hurwitt Director, Market Intelligence Fairfax County Economic Development Authority
FAIRFAX COUNTY S ADVANTAGES Market Access Dynamic, Diverse, International Business Community Center of Innovation Workforce: Highly Educated and Skilled Real Estate: A Variety of Options Outstanding Quality of Life
MAJOR CORPORATE ANNOUNCEMENTS
HIGHER EDUCATION CONFERRED ANNUALLY
FAIRFAX COUNTY COMMERCIAL REAL ESTATE
6.0 U.S. Gross Domestic Product Quarterly Change Real GDP (Billions) $19,000 % 5.0 4.0 3.0 2.0 1.0 0.0-1.0 $18,000 $17,000 $16,000 $15,000 $14,000 $13,000 $12,000 $11,000-2.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 $10,000 Source: Bureau of Economic Analysis (Seasonally Adjusted, Chained 2012 Dollars ) 2017 +2.3% 2018Q2 +4.2%
400 350 300 250 200 150 100 50 0 US Payroll Jobs Month-to-Month Change (000s) Total (Millions) 2013 2014 2015 2016 2017 2018 155 150 145 140 135 130 125 2017-2018 2.3M Aug +201K Since 2010 +19.5 M Source: Bureau of Labor Statistics (Seasonally Adjusted), GMU Center for Regional Analysis
Consumer Confidence 200 180 160 140 120 100 80 Current Situation Expectations August 2018 Cur. = 172.2 Exp. = 107.6 (1985 = 100) 60 40 20 0 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Source: The Conference Board, GMU Center for Regional Analysis
The Washington Economy
110 Annual Job Change - Washington MSA MOTYC Non-Farm Jobs 000 s 000 s 3,400 90 70 50 30 10 3,300 3,200 3,100 3,000 2,900 July 17- July 18 +77.1K -10 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 2,800 July-18 Total: 3,360 K
Employment Composition by Sector July 2018 Washington MSA Professional & Business Services Education & Health Services Federal Government State & Local Government Leisure & Hospitality Retail Trade Other Services Construction Financial Activites Information Transportation & Utilities Wholesale Trade Manufacturing 2.2% 2.1% 1.9% 1.7% 5.0% 4.8% 6.4% 10.8% 10.0% 10.5% 8.3% 13.1% 23.2% Source: US Bureau of Labor Statistics, Current Employment Statistics 0% 5% 10% 15% 20% 25% 12
(000s) 25 Professional & Business Services Washington MSA Month Over the Year Change Prof., Sci. & Tech. Svcs & Mgt. Admin. & Waste Mgt. 20 15 10 5 0-5 -10-15 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
(Ranked by Size in 2017) Prof. & Bus. Svcs Educ & Health Svcs Federal Govt. State & Local Govt Leisure & Hosp. Retail Trade Other Services Construction Financial Information Transp. & Util. Wholesale Trade Manufacturing -4.8 Job Change by Sector July 2017 July 2018 Washington MSA -0.3 0.0 0.7 2.0 3.0 2.9 3.8 6.0 (000s) Total = 77,100 12.4 11.8 17.1 22.5-10 -5 0 5 10 15 20 25 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 15 Largest Job Markets Job Change: July 2017 July 2018 Washington +2.3% Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
50 Annual Job Change Northern VA MOTYC Non-Farm Jobs 000 s 000 s 1,550 40 30 20 10 0-10 1,500 1,450 1,400 1,350 1,300 July 17- July 18 +28.2K -20 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis 1,250 July-18 Total: 1,493 K
(Ranked by Size in 2017) Prof. & Bus. Svcs Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Federal Govt. Other Services Financial Construction Transp. & Util. Information Wholesale Trade Manufacturing -2.1 Job Change by Sector July 2017 July 2018 Northern Virginia -0.1 0.0 0.0 0.8 1.1 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis (000s) Total 28,200 1.8 1.9 3.3 2.9 3.0-4 -2 0 2 4 6 8 10 12 6.0 9.6
Unemployment Rates in the WMSA By Sub-State Area 12 10 8 6 4 6.0 DC 4.1 SMD 3.9 U.S. 3.5 MSA 2.4 NVA 2 0 Source: Bureau of Labor Statistics (Region - Not Seasonally Adjusted, US Seasonally Adjusted)
Washington Area and NVAR Region Housing Trends
Home Sale Price Washington MSA $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Med Home Sale Price Avg Home Sale Price $0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Home Sale Price NVAR Region $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Med Home Sale Price Avg Home Sale Price $0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Home Sale Price Fairfax County $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Med Home Sale Price Avg Home Sale Price $0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Home Sale Price Arlington $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Med Home Sale Price Avg Home Sale Price $0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Home Sale Price Alexandria $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Med Home Sale Price Avg Home Sale Price $0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
50,000 40,000 Closed Sales and Inventory Washington MSA Total Sales Inventory(Months End) 30,000 20,000 10,000 0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
12,000 10,000 8,000 Closed Sales and Inventory NVAR Region Total Sales Inventory(Months End) 6,000 4,000 2,000 0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jul-99 Jul-00 Jul-01 Closed Sales and Inventory Fairfax County Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Total Sales Inventory(Months End) Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Closed Sales and Inventory Arlington 1,400 1,200 1,000 Total Sales Inventory(Months End) 800 600 400 200 0 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
1,400 1,200 1,000 800 600 400 200 0 Jul-99 Jul-00 Jul-01 Closed Sales and Inventory Alexandria Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Total Sales Inventory(Months End) Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Outlook
Employment Change in the WMSA by Sub-State Area (000s) 2013 2014 2015 2016 2017 2018 2019 2020 D.C. 13.4 5.2 15.9 13.0 9.7 10.6 8.9 8.2 Sub. MD 7.2 10.2 12.5 14.4 17.7 14.1 12.0 11.0 No. VA 9.2 0.8 29.8 31.0 23.6 15.9 13.7 12.6 REGION 28.1 18.6 57.7 55.6 51.0 40.6 34.6 31.8 Source: BLS, IHS Economics, GMU Center for Regional Analysis (December 2016) NOTE: The regional totals do not include Jefferson, WV. Average Annual Change 1990-2016 = 37,300
NVAR Region Forecasts
600,000 Median Sales Price Forecast Fairfax 500,000 400,000 300,000 200,000 100,000 0 Fairfax Median Sales Price Fairfax Median Sales Price Forecast
Sales Forecast (units) Fairfax 2,500 2,000 1,500 1,000 500 0 Fairfax Sales Fairfax Sales Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Inventory Forecast (months end) Fairfax 5,000 4,000 3,000 2,000 1,000 0 Fairfax Inventory Fairfax Inventory Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Median Sales Price Forecast Arlington 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Arlington Median Sales Price Arlington Median Sales Price Forecast 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
400 350 300 250 200 150 100 50 0 Sales Forecast (units) Arlington Arlington Sales Arlington Sales Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Inventory Forecast (months end) Arlington 1,000 800 600 400 200 0 Arlington Inventory Arlington Inventory Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
600,000 Median Sales Price Forecast Alexandria 500,000 400,000 300,000 200,000 100,000 Alexandria Median Sales Price Alexandria Median Sales Price Forecast 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
400 350 300 250 200 150 100 50 0 Sales Forecast (units) Alexandria Alexandria Sales Alexandria Sales Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
800 700 600 500 400 300 200 100 0 Inventory Forecast (months end) Alexandria Alexandria Inventory Alexandria Inventory Forecast Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Key Factors Now/This Year: On a roll Large corporate prospects Federal budget (let the good times roll) Bonus checks Job growth constrained by labor availability Building permits not booming Looking Forward Economic development = Talent attraction Quality of life is key Net effects of new tax laws on worker take home Effects of SALT limitations on local governments Increasing debate about 1099 work versus employment The sharing economy Construction costs AI
cra.gmu.edu fairfaxcountyeda.org @FairfaxEDA @GMU_CRA