Posted on 04/20/2013 1:02:24 PM PDT by whitedog57
The headlines about government spending and the sequester have faded into the background. But for Virginia, they remain on people’s minds.
After all, Virginia leads all states in terms of percentage of GDP from government at 13.9%. So, yes Virginia, sequestration is a potentially important issue.
And Arlington, the home of million dollar bus stops, is the big winner in terms of defense spending in Northern Virginia.
But with the Federal government spending $30,000 for each household in America (while taking in $20,000 from each household), growing entitlement spending will likely evolve into less spending on everything else along with higher taxes and more debt.
The good news for Virginia is that the unemployment (statewide) is considerably lower than the national average.
But the leading index for Virginia is rising, but has remained lower than the US average. The leading index for each state predicts the six-month growth rate of the state’s coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.
And the coincident economic activity index for Virginia remains below the national average.
Like much of the US, Virginia house prices enjoyed a good 2012 rise after finally shaking off the housing bubble burst.
And here are the house price indices for Washington DC according to Case-Shiller (yellow) and FNC (white). Case-Shiller shows a bigger pickup in prices during 2012 than FNC.
Northern Virginia housing sales and median prices for Q4 2012 show a wide contract in winners and losers. The winners include Fairfax County (all except my zipcode, of course), Loudon, Fauquier and Prince William Counties. The relative losers where Alexandria and Arlington Counties. (Source: DataQuick)
On the commercial real estate front, vacancies in the Virginia sub-market have generally been rising, particularly in the last half of 2012. Remember, we are still mired in the worst economic recovery from a financial meltdown in history.
And the Virginia sub-market has shown a flat line in effective rents in 2012 after a vibrant recovery in 2011.
Virginia is vulnerable to a government spending slowdown, particularly in defense. Leading indicators and coincident economic activity indicators are reflecting a slowdown in Federal government spending. And this slowdown is appearing in commercial real estate, but housing keeps rising in most zip codes.
I bet Virginia does better than the rest of the country. The government has the printing press.
We are headed for a hard crash that may make the housing crash look like chump change.
Really, we take in $20K from each household? Bwahahahahaha!
That must make folks with low taxable income feel really good about themselves.
Assuming 2.4 people per average household, that's around $3,566 per household.
Note - that doesn't include indirect fed income. Anyone care to look that up? ;-)
I don’t know how they get the numbers or the validity of the numbers.
I do know government is spending far more than it takes in and such spending is unsustainable without serious consequences even when government can borrow and/or print the money.
They can’t fix it with taxes. They won’t fix it by growing the economy. They have one answer only.... keep spending money we don’t have and we’ll make the hard decisions next year.
Just wait until Obamacare impacts our current situation. The ending of this story will be ugly.
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