Population, Business, Real Estate Trends Highlighted In Fairfax County Economic Outlook

BELLE HAVEN, VA — An updated outlook on Fairfax County's economy and challenges businesses face showed the county outperforms other parts of the DC metro economically, but a population decrease is worrisome.

The outlook was provided to members of business chamber members in the greater Mount Vernon and Springfield areas last Thursday.

The Economic Outlook for 2023 was presented by Walsh, Colucci, Lubeley & Walsh, P.C. in partnership with the Mount Vernon Springfield Chamber of Commerce and Southeast Fairfax Development Corporation. Nearly 100 people attended the event at the Belle Haven Country Club to hear updates on Fairfax County's economy.

Terry Clower, a professor of public policy at George Mason University's Schar School of Policy and Government, gave a presentation on economic trends in the U.S., DC region and Northern Virginia specifically. The biggest takeaway from Clower's presentation was that the DC region underperforms economically, but Northern Virginia is the best performing sub-region of the metro area.

One concern shared by Clower was the change in Fairfax County's population. Recent U.S. Census estimates showed Fairfax County had an estimated decrease from 1,148,558 in 2020 to 1,141,645 in 2021 and 1,138,331 in 2022.

Meanwhile, neighboring Loudoun County's population rose from 422,669 in 2020 to 432,085 in 2022, and Prince William County's population increased from 482,790 to 486,943 between 2020 and 2022.

Prince George's County, Maryland, had the largest decline of regional localities from 2021 to 2022. Other localities with population declines from 2021 to 2022 were Montgomery County, Maryland, and the cities of Manassas and Manassas Park.

The greatest factor of Fairfax County's population decrease was domestic migration, according to Clower. One trend in U.S. domestic migration shows the most people moving to Texas and Florida.

Another trend highlighted by Clower was that hybrid office work is "here to stay," and some may continue with completely remote work. That assertion is based on data of office demand, housing, transportation, the cost of living for young families and other factors.

Northern Virginia and DC's real estate trends were examined by Chris LeBarton, the director of market analytics at CoStar Group.

In the commercial market, LeBarton noted that big cities with significant white collar jobs had the largest impact from hybrid work. In DC, the latest office vacancy rate was 15.7 percent, as reported by CoStar in April.

LeBarton's presentation showed how vacancies are expected to remain higher than pre-pandemic years in the DC metro area, and sublet availability from current tenants has grown since 2019. However, the retail space has become tight, and store closures have slowed since 2020 across the U.S. Industrial properties are expected to see a slow decline in rent growth in the coming years.

In the multifamily sector, vacancies are expected to increase in the DC market, according to LeBarton's presentation. Fairfax County is forecasted to see vacancies go up as newly delivered units outpace occupied units. Vacancies will start to trend down before stabilizing in the coming years as the forecasted delivered units more closely match occupied units. For the U.S. as a whole, rent is on the path to normalcy as rent growth slows in the coming years.

The last presentation was from Alex Thalacker of the Fairfax County Economic Development Authority to give an overview of the economic activity in Fairfax County. Data showed how the labor force, employment and job postings have increased in the county. Unemployment is also trending down, coming in just above 2 percent in Fairfax County and the Northern Virginia region. The fastest growing jobs in Fairfax County are computer and information system managers, network and computer administrators, information security analysts, and retail and sales supervisors, according to Thalacker.

For Richmond Highway and Springfield in particular, the unemployment rate was reported to be 2.9 percent. Increased office vacancies are the trend for the Richmond Highway and Springfield areas as well as Fairfax County as a whole.

After the presentations, attendees had the chance to ask questions during a Q&A session with the speakers.