Stephen Fuller: Local Economic Outlook Is Cloudy
Stephen Fuller, head of George Mason University's Center for Regional Analysis, is in demand these days.
Uncertainty surrounding the mortgage industry credit crisis has many business leaders turning to the professor of public policy for clarity on the future of the local economy. The problem is, Fuller says he can't confidently say when the housing slowdown that began in the first half of 2006 will end because it's unclear how deep credit problems will affect the region.
"We're not in a recession and it's not like [the savings and loan crisis], but there is no quick fix," Fuller said in an interview yesterday.
As we talked, Fuller was called by a local bank asking whether he would speak to its board of directors next month at the Tower Club. The bank wanted his take on the housing sector and local economic growth.
He said home sales will undoubtedly slow. Last year, 80,000 homes sold and this year Fuller expects 70,000 to 75,000 homes sales in the region.
There is already evidence that local government are being affected by the housing downturn, as counties like Fairfax feel a shortfall of tax revenues that were pouring in during the housing boom.
He expects unemployment to increase slightly which could mean less money for discretionary spending. If people spend less money, that will in turn affect economic growth.
"The reality is," he said, the region is five years into a business growth cycle that is "aging and maturing." The market inevitably is going to correct itself.
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