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Amid the gloom, glimmers of hope
Quarterly economic review of Fredericksburg area

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Date published: 4/25/2010

BY BILL FREEHLING

The economic recession continued to plague local business performance in the first quarter of 2010, though there were signs of improving conditions.

As the accompanying numbers show, most of the measurable economic data points for the Fredericksburg area didn't improve much in the first quarter, and some of them worsened.

The Fredericksburg area's unemployment rate was at 7.3 percent in February, the latest month available. That's near a 20-year high, and it's gone up from the past two years. Some of the increase may be due to the record snowfall, and the numbers usually improve into the spring.

Commercial real estate vacancy rates have stayed relatively steady over the past year, though they remain well up from a few years back. Rents have also fallen during that time.

New vehicle registrations did a little better than in the same period of 2009, while overall taxable sales (which don't include automotive) were fractionally lower for the fourth quarter of 2009.

Housing continued to bump along what is perhaps a market bottom in the first quarter, with median prices staying about where they've been for more than a year and sales slightly down from the first quarter of 2009. Realtors report increased activity this month as the federal tax credit deadline looms and the spring and summer selling seasons arrive.

Perhaps the most encouraging sign from the first quarter was the strong gains--55 percent from the same period in 2009--in building permits for single-family detached houses.

Some of that gain was likely due to builders trying to get houses up in advance of the April 30 first-time home buyer's tax credit, but it also speaks to optimism over better days to come as new jobs move into the area from the BRAC actions, the opening of the Spotsylvania Regional Medical Center and more. Many national builders reportedly are flush with cash and ready to start spending on new projects.

The pace of economic announcements over the past couple of months also speaks to renewed optimism as credit markets thaw and people see their portfolios recover. Here is a short review of some of the headline-making business stories from the first quarter:

Stafford County drops the Business, Professional and Occupational License (BPOL) tax before it's ever collected.


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BY THE NUMBERS

Here is a look at some local economic indicators for the first quarter of 2010 (January-March) compared with recent quarters. Unless otherwise noted, the data are for Fredericksburg, Caroline, King George, Stafford and Spotsylvania.

Home building permits*

Q1 2010: 302

Q4 2009: 266

Q1 2009: 195

*This is for single-family detached homes and also includes Orange County.

Source: Fredericksburg Area Builders Association

Home sales

Q1 2010: 819

Q4 2009: 959

Q1 2009: 848

Source: Metropolitan Regional Information Systems Inc.

Median housing prices

March 2010: $200,000

Dec. 2009: $210,000

March 2009: $199,000

Source: Metropolitan Regional Information Systems Inc.

Unemployment rate

Feb. 2010*: 7.3 percent

Feb. 2009: 6.5 percent

Feb. 2008: 3.4 percent

*March data isn't out yet. Look for it in April 29 FLS.

Source: Virginia Employment Commission

New vehicle registrations

Q1 2010: 2,375

Q4 2009: 2,455

Q1 2009: 2,220

Source: Virginia Automobile Dealers Association

Taxable sales

Q4 2009*: $803,989,070

Q3 2009: $814,285,633

Q4 2008: $808,646,010

*Taxable sales data isn't yet available for the first quarter. It should be out in about a month.

Source: Virginia Department of Taxation

Commercial real estate vacancy rates

(Retail, Office, Industrial/Flex)

Q1 2010: 8.0 percent, 13.4 percent, 19.0 percent

Q4 2009: 7.7 percent, 13.5 percent, 21.3 percent

Q1 2009: 7.5 percent, 14.4 percent, 18.6 percent

Source: Thalhimer/Cushman & Wakefield Alliance

ABOUT THIS REPORT

This is the first of a planned quarterly feature in which The Free Lance-Star Business team gives a snapshot of area market conditions and reviews some of the important happenings over the past three months that have affected the area's economy. Look for it a few weeks after the end of each quarter, and let us know if there are additional things you'd like to see in this report.