Howard County's normally rosy economic outlook remains bright for the long run, but the housing, commercial real estate, and retail portions of the local economy face rough going for the next several years, according to a panel of experts presented by the county Chamber of Commerce.
The national economy should remain sluggish for the next year or two, but there won't be a recession, in the opinion of Jeffrey Schappe, BB&T; bank's senior vice president and chief investment officer.
With low interest rates and no wage inflation despite higher food and energy prices, Schappe said he doesn't believe a recession will occur. In addition, he said, a housing slump is normally caused by a recession, not the other way around.
Despite the current housing slowdown, charts presented by Suzi Padgett, president of the Howard County Association of Realtors and a vice president at Coldwell Banker, showed that 73 Howard County homes sold for $1 million or more through October, though that too is down from 100 such homes in the same period last year. The bulk of the county's housing market - 61.3 percent - is made up of homes priced between $300,000 and $600,000. Houses costing $1 million or more make up 3.2 percent of the market.
Residential home sales are down this year compared with 2006, but the decline is slowing, she said.
The "big surprise," she said, is that average home sale prices continue to rise slightly in the county.
"I don't know - it's magic," she joked to a crowd of more than 100 people last week at a Columbia hotel.
"I do not think we'll see full recovery until mid-2009 or 2010," she told the group.
Richard Alter, president and CEO of Manekin LLC , a commercial real estate firm with headquarters in Gateway Business Park, said he's naturally an optimist, but he also expects business to be down for the next two years.
His firm has not bought land recently, he said.
"We're going to stay on the sidelines because prices have gone up," he said, adding that he feels the subprime mortgage crisis "has affected the entire market."
But overall, "Howard County is incredibly well-located," he said, and "is a great place to be."
Steve Adler, managing partner of Savage Mills, the 19th-century sail cloth factory converted to retail, said, "Buckle up, hold on - we're in for a bumpy ride."
After the public discussion, Adler said sales at Savage Mill are so-so - not hot but not terrible, either.
Larry Davis, a managing partner of Aronson Capital Partners, an investment bank that serves government contractors, said the federal military base realignment process, or BRAC, may take longer to occur than first thought, with little change evident in the next two years.
In the long term, he said, Howard County should benefit from BRAC, which is expected to bring thousands of well-paying defense jobs to Maryland. The hiring challenge, he said, might be finding enough skilled workers who also have federal security clearances.
An informal chamber survey of 103 people at the breakfast session found 79 percent expecting their business sales to increase next year, and 52 percent planning to make capital investments in their businesses. In addition, 58 percent said they expect state sales tax increases to hurt them.