The Road To Recovery & The Beltway Burden
How Long is the Journey? And Just How Much Will That Commute Cost?
By Ann Gutkin, Public & Government Affairs Specialist
Northern Virginia’s housing market will accelerate towards recovery faster than the rest of this region. However, the journey is not over yet, explained Dr. Stephen Fuller, Director of George Mason University’s Center for Regional Analysis, delivering his “Update on the Downturn” at NVAR’s Herndon center on June 11, 2009 to a sell-out crowd.
“It’s really important for you to know how to read the numbers,” Fuller stated. Nationally, unemployment figures continue to reveal significant job loss. Fuller urged listeners not to concentrate on those numbers when gauging economic recovery. “Job growth lags recovery,” he pointed out.
In this region, “our glass is less empty than others,” Fuller noted. At the national level, all sectors are losing jobs, but the D.C. area is adding jobs in business and professional services due to stimulus-related growth in the federal government. And many of these jobs, according to Fuller, are located in Northern Virginia. “Unlike other parts of the country,” said Fuller, “there’s a positive side to our economy.”
Realtors® can feel confident that home sales will pick up, Fuller opined, also predicting stronger increased sales in Northern Virginia than in Maryland.
Since February, Fuller noted, sales of new homes reported by Northern Virginia builders have increased each month, with some prices rising due to low inventory. The new contract “kick-out” rate is now between 10 and 12 percent, compared to August, 2007 when three quarters of all contracts for new homes were cancelled. “This is a sign of normality returning to the market,” he said.
May sales figures by sub-region showed Northern Virginia leading the way, although the mix is changing in favor of lower-priced units, a reflection of first-time home buyers taking advantage of the $8,000 tax credit. “[Housing] prices will firm up faster inside the beltway and in the smaller units,” Fuller noted.
There may still be a few miles to go on the road to recovery, but Northern Virginia Realtors® can take comfort in Fuller’s message that, “We are through the worst of it.” Fuller’s complete presentation is available at nvar.com or cra-gmu.org.
The Beltway Burden:
What is Your ‘Cost of Place’?
Travel in Northern Virginia, whether it is on the figurative road to recovery or the nerve-wracking asphalt of our local highways, is a factor to be reckoned with on a daily basis. What many home buyers may not consider in their decision to buy a home is the actual combined cost of housing and transportation in that location.
The second half of the June 11 event was presented by Janine Cuneo, Project Director with the Urban Land Institute’s J. Ronald Terwilliger Center for Workforce Housing, and featured ULI’s Beltway Burden report.
The ULI is a research and education organization comprised of more than 37,000 land use and development professionals advocating for responsible land use management and the creation of workforce housing. The Beltway Burden report was created to encourage people to determine their ‘cost of place’ and to understand how housing plus transportation costs can have a significant affect on their income.
Emily Salomon, research associate with the Center for Housing Policy, explained the policy implications of the research, which are intended to maximize infrastructure investments to accommodate growth.
After Salomon’s presentation of the report, Cuneo introduced Realtors® to its online Housing and Transportation Cost Calculator.
The cost calculator is found at nvar.com and at uli.org/costcalculator. It is a tool that consumers and real estate professionals can use to compare the combined housing and transportation costs of multiple properties. The calculator uses census data to create the comparisons, and is supplemented by the user with specific circumstantial information. “No personal data is collected or stored during the search process,” Cuneo assured the audience during her live demonstration.
Realtors® left this event with the knowledge that although Northern Virginia has a green light on the road to economic recovery, its citizens must carefully study commuting patterns in this sprawling, traffic-plagued region in order to make viable housing choices. Armed with information provided by the speakers, they will be able to help their clients do that.
In this region, “our glass is less empty than others,” Fuller noted.