Is Howard County in Recession, Too?

By Anirban Basu

In answer to the question posed in the headline of this article, probably not. As of this writing, Howard County's unemployment rate remains the lowest in Maryland, sitting at well below 3%. Indeed, the primary labor market issue still revolves around the lack of suitably priced and skilled workers in Central Maryland, as opposed to excess labor availability created by mass layoffs.
That said, given the recessionary conditions now prevailing at the national level and weakness in several industry segments, including mortgage banking, retail and residential construction, employment growth will continue to slow in the region, which implies that unemployment rates are set to head higher.

Housing Market
The local housing market continues to muddle along. Between March 2007 and March 2008, the active inventory of unsold homes in Howard County rose from 1,530 to 1,903. And prices are now declining. In March 2008, the average home in Howard County traded for roughly $408,000, down 16% from the peak average price achieved in June 2007.
With the credit crunch still permeating the residential lending sector and the broader economy, the market bottom likely remains many months away. That means that downward pressure on prices will be in place for the balance of the year and probably beyond.

Less Impact
As is often the case, Howard County is holding up much better than the balance of the nation in the face of economic adversity. As an area characterized by high-wage service sector jobs and residents working in high-level white-collar positions, the county's economic performance is less impacted by the inventory adjustments that take place in more industrial areas. The local economy will also temporarily benefit mid-year from the arrival of rebate check money.

Anirban Basu is chairman and CEO of Sage Policy Group in Baltimore. He can be contacted at 410-522-7243 and abasu@sagepolicy.com. This article was commissioned by Lowe fs, a Howard County-based financial planning and wealth management firm. For more information about Lowe fs, visit www.lowefs.com.