Fuller: Trends Vary Wildly Inside Vs. Outside Beltway
In an exclusive interview with the News-Press Monday, the foremost authority on economic trends in Northern Virginia drew a stark contrast between the state of economic affairs inside the Beltway, including in Falls Church, compared to regions outside it.
Dr. Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University’s School for Public Policy, said that the greater Falls Church area of Fairfax County and its environs constitute “probably the strongest area” of the county and that housing there is already “showing some signs of stability.”
On the other hand, he said economic conditions in the Northern Virginia regions to the west continue to worsen and cannot expect a turnaround for up to two years. As much of the U.S. heads deeper into recessionary conditions, things are “terrible” in areas such as Prince William, Stafford, Fauquier, Spotsylvania and other outlying counties, where there is a 20-month backlog in home sales, compared to five months inside the Beltway, he said.
Home sales in the Falls Church, Arlington and Alexandria areas “will pick up by September if they haven’t already,” Fuller forecasted, saying that for these areas, right now it’s as bad as it’s going to get.
By contrast not only to outlying areas of this region, but to places like Los Angeles, Miami and Detroit, “new jobs are still being created here,” and the growth in unemployment has been slight.
“The growth here has been the slowest since 2002, about 2.5% annually now, which is zero against inflation,” he said. “But the area has been relatively cushioned.”
Fuller said he stood by his earlier predictions that an office and residential construction boom is coming to the Tysons Corner area, although he’s downgraded his forecast some since the beginning of the year. “We’re doing better than the rest of the U.S. in this area,” he said.
Outlying areas are mired in economic woes because the biggest parts of their economies are based on retail and housing, while consumers don’t have money to spend and thousands of homes are going into foreclosure.
On the other hand, the areas inside the Beltway feast off government contracts for defense, homeland security and infrastructure.
Fuller said this won’t change significantly even if things change in Iraq or with a new regime in the White House. He also said the trends will be roughly the same no matter who gets elected president.
“There will be some slowdown in government contracts at first,” with the onset of a new presidency, Fuller said. “But, it will be because it is common for a new president to take some time, about six months, learning how to spend money.”
“As a new government takes hold, there is a leasing curve. There will be a temporary slowdown in the awarding of contracts,” he said.
Fuller and his Center for Regional Analysis were retained by the City of Falls Church’s Economic Development Authority in 2006 to prepare a so-called “Big Picture Study” of the demographics and economic trends of the areas contiguous to the City of Falls Church.
It was in that study that he reported the annual disposable income of 100,000 persons living in the census tracts in and around the City area was approximately $4 billion.
The study served as an impetus for City officials to continue ahead with encouraging large scale mixed-use projects. Fuller’s projections of growth in Tysons Corner and the immediacy of a large consumer base in the region immediately contiguous to the City of Falls Church suggested that there would be a market for considerable new residential and retail growth in the city.