NoVA Home Prices Over the Next Few Years? (foreclosure, loans)

[jillabean]

Originally Posted by frostopsy

True there are private companies, but the main business here is government. If you took the Pentagon, with all the money they have in contracts, and the alphabet soup of agencies out of NOVA, what would you have? Do you still think home prices would still be as high as they are now? Do you think 10 of the riches counties would be in the DC area?

But that's an unrealistic scenario. If the federal government moves, then it's probably because of something catastrophic nationally and things are probably going to be really, really bad all over. I stand by what I said; cuts will hurt, but it's not like that 30% is going to completely go away and close up shop and not all the cuts are happening here in this area. On top of that, of the whole DC area, NoVa is least dependent on federal jobs and every day more industry is moving to the area. NoVa started the push to diversify our economy 30 years ago--with a strong push into tech jobs.

If there are cuts, I can see things stalling, but not crashing.

[Shalelogin]

Originally Posted by ACWhite

For example, if I run a restaurant, an economist could trace some of my economic activity to Fed. spending, but others might say that's a stretch.

^this. For example, I stand to lose about $900 a month for the rest of the year. I can't do anything about my rent, student loans, or auto payment, and need to keep saving(in case they do RIFs) so that means the money will have come out of going to restaurants, bars, and cutting back on any new clothes, misc purchases. I'll also defer getting a new car until next year.

So while the govt is only furloughing me, I'm pretty much directly passing the impact almost entirely onto the local economy. That 20% pay cut is basically my discretionary spending, so thats what gets cut. Multiply that by 500k people locally, and local businesses are going to get killed, especially places like car dealerships, which are big ticket items that you can usually just put off buying for year or so.

You'll see job losses in local businesses by end of summer if the furloughs persist. DoD contractor layoffs will begin in phases, as contracts come up for renewal, many towards the end of the summer and when the fiscal yr rolls over.

[CAVA1990]

Originally Posted by Shalelogin

So while the govt is only furloughing me, I'm pretty much directly passing the impact almost entirely onto the local economy. That 20% pay cut is basically my discretionary spending, so thats what gets cut. Multiply that by 500k people locally, and local businesses are going to get killed, especially places like car dealerships, which are big ticket items that you can usually just put off buying for year or so.

You'll see job losses in local businesses by end of summer if the furloughs persist. DoD contractor layoffs will begin in phases, as contracts come up for renewal, many towards the end of the summer and when the fiscal yr rolls over.

Actually the overall impact shouldn't be as great as that from the payroll/self-employment tax increase.

[Caladium]

Originally Posted by Shalelogin

^this. For example, I stand to lose about $900 a month for the rest of the year. I can't do anything about my rent, student loans, or auto payment, and need to keep saving(in case they do RIFs) so that means the money will have come out of going to restaurants, bars, and cutting back on any new clothes, misc purchases. I'll also defer getting a new car until next year.

But here's the thing--while it may be a depressing thing to see restaurants and stores cut back on employees (and some possibly close) that won't affect the housing market. All that will happen is most people thinking of selling this year will hold off on putting their houses on the market. Thus it will be a stagnant year--there may not be a lot of buyers, but inventory will also be limited. You might see rents dropping as a result, but I doubt you'd see the sale price dropping--and if it did, it wouldn't be that significant.

[Cardiff Kook]

Originally Posted by CAVA1990

Actually the overall impact shouldn't be as great as that from the payroll/self-employment tax increase.

you are talking about Social Security? that rate just went back to its normal 6.2%, the same as its always been. We just caught a break at 4.2% the past few years but its not really a tax increase so to speak

[CAVA1990]

Originally Posted by GMUAlum08

you are talking about Social Security? that rate just went back to its normal 6.2%, the same as its always been. We just caught a break at 4.2% the past few years but its not really a tax increase so to speak

Doesn't matter whether it used to be higher a few years back, it's a 2% bump to what had become peoples' regular incomes and has the same impact to spending habits. Those little extras you bought last year you may not this year. On a $100,000 family income it's about $160 a month. That's about a week's worth of groceries for a family of four each month. It'll have the same impact as if every 10th person in the region gets furloughed a day a week. I doubt the number of furloughs will be that high.

[Cardiff Kook]

Originally Posted by CAVA1990

Doesn't matter whether it used to be higher a few years back, it's a 2% bump to what had become peoples' regular incomes and has the same impact to spending habits. Those little extras you bought last year you may not this year. On a $100,000 family income it's about $160 a month. That's about a week's worth of groceries for a family of four each month. It'll have the same impact as if every 10th person in the region gets furloughed a day a week. I doubt the number of furloughs will be that high.

I'm just saying you called it a "tax increase" when it really just returned to the normal rate. If it went up over 6.2% then its definitely a tax increase

[CAVA1990]

Originally Posted by GMUAlum08

I'm just saying you called it a "tax increase" when it really just returned to the normal rate. If it went up over 6.2% then its definitely a tax increase

If my house went down in value for a couple of years, and then went back up again, it would be considered an increase in home value. These things are generally internalized and measured year over year.

[Cardiff Kook]

Originally Posted by CAVA1990

If my house went down in value for a couple of years, and then went back up again, it would be considered an increase in home value. These things are generally internalized and measured year over year.

you can look at it however you want, but its not like the government went and raised SS taxes higher than the traditional levels that's all I'm saying.

[frostopsy]

Originally Posted by jillabean

But that's an unrealistic scenario. If the federal government moves, then it's probably because of something catastrophic nationally and things are probably going to be really, really bad all over. I stand by what I said; cuts will hurt, but it's not like that 30% is going to completely go away and close up shop and not all the cuts are happening here in this area. On top of that, of the whole DC area, NoVa is least dependent on federal jobs and every day more industry is moving to the area. NoVa started the push to diversify our economy 30 years ago--with a strong push into tech jobs.

If there are cuts, I can see things stalling, but not crashing.

My comment was hypothetical, as I wanted to contribute to the discussion. Time will tell wither or not this area can weather a reduction of government spending. All I know is that when I drive through northern VA, most of the office buildings have the name of a contractor pinned on the side of it.