Region’s economy continues to grow as housing prices rise

From The Frederick News-Post:

The Washington, D.C., region is doing well economically, although much of the growth is in Virginia, while home prices around the region continue to rise.

A report released in late April by George Mason University’s Stephen S. Fuller Institute found that economic indicators suggest that the Washington region’s economic growth should continue through at least the third quarter of 2018.

The institute’s April Washington Economy Watch recorded the region’s 47th straight month of economic growth, according to an index used to track the current state of the economy. 

Wage and salary employment in the region increased 1.4 percent between February 2017 and February 2018, while consumer confidence increased by 17.6 percent in the same time, according to the report.

“Our underlying fundamentals haven’t changed and we’re continuing to see growth,” said Jeannette Chapman, of the Fuller Institute.

The passing of the federal budget agreement in March has helped bring some stability to the region’s economy, Chapman said, with worries about a government shutdown largely fading for the many government workers and the businesses that rely on their economic power.

But the report notes that there are fewer federal government jobs in the region.

The number of federal employees in the region peaked at 387,700 in July 2010, and is now 361,300, according to the report.

Meanwhile, the creation of new jobs in the region has slowed, and those that have been created have shifted away from Maryland and toward Virginia.

The Washington region averaged about 55,300 new jobs a year for the past three years, the report said. But in the first quarter of 2018, the economy averaged only a rate of 41,300 new jobs a year.

And while Washington, D.C., and the Maryland suburbs have historically accounted for between 45 and 50 percent of new jobs and northern Virginia for 50 to 55 percent, that balance has shifted in the first quarter of 2018.

Northern Virginia had 78 percent of new jobs in the quarter, while Maryland’s share dropped to 4.8 percent and Washington’s to 17.1 percent.

The report notes that it’s too soon to tell what has led to suburban Maryland’s drop in job growth, but it could be related to changes in federal procurement spending, “possible shifts between domestic federal agencies and non-domestic federal agencies that would have favored Northern Virginia’s economy over Suburban Maryland’s,” the report said.

The Washington region’s continued economic growth can also be seen through rising home prices in the area.

The Washington metropolitan region’s median sale price in April was $450,000, up 3.1 percent from the same time in 2017 and 3.4 percent compared with March, according to information compiled by Bright MLS, which collects real estate information from Maryland, Delaware, New Jersey, Pennsylvania, Virginia, Washington, D.C., and West Virginia.

The Washington metro region includes Montgomery and Prince George’s counties, Washington, D.C., and several jurisdictions in Washington’s Virginia suburbs but does not include Frederick County.

The report listed Montgomery’s median home price at $445,000 in April, up from $436,500 in April 2017.

Prince George’s County was the least expensive jurisdiction in the area, with a median price of $285,000.

Fall’s Church in Virginia had the highest median price in the region, at $745,000.

The Baltimore metropolitan region — made up of Baltimore city and Baltimore, Anne Arundel, Carroll, Harford and Howard counties — had a median sale price of $267,900, up 4.9 percent from 2017 and 3.4 percent from March.

Howard had the highest median price in the region, at $430,000, while Baltimore city was the lowest, at $139,900.

Carroll’s median price of $314,900 was the third-highest in the region.

Frederick County’s median price for homes listed for sale, as of the end of March, was $362,240, while the median price of houses sold was $309,400, according to the real estate site Zillow.com.

The Frederick County Association of Realtors announced in April that average home prices rose by 10.1 percent in March compared with the same time in 2017, while median prices went up by 14.4 percent.

The average time that a house spent on the market in the county was 69 days, compared with 81 days at the same time in 2017.

The inventory of houses in the county is lower than normal, but homes prices across the region are rising, association president Greg Phillips said in a release.

The group is hoping that the higher prices will encourage more people to list homes for sale to increase the inventory, he said.

The higher prices can help create a seller’s market.

There are more than 900 homes listed for sale in the county, with 1,200 considered to be about an equal market for buyers and sellers, said Patrick McLister, an attorney whose firm Salisbury, McLister and Foley represents the Frederick County Association of Realtors.

Generally speaking, the agents the firm works with are very busy, McLister said.

After a slow winter, “it’s a welcome, busy period,” he said.

Frederick County gets the advantage of the Washington region’s economic stability, with significant numbers of government employees and contractors, but the county’s home prices are more attractive than some other areas in the region, McLister said.

“We don’t have the inflated prices that Montgomery County and Howard County have,” he said.

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