Basu with the news
September 15, 2008
Anirban Basu, the local economics luminary who runs the Sage Policy Group, knows how to give a good talk. His presentations, more than any professorial type I’ve ever seen, make the audience laugh, and never really degenerate into the dense jargon and technical talk that plagues a lot of business writing and management seminars.
So on Tuesday at the Maryland Association of Realtor’s annual convention in Ocean City, we took some notes at Basu’s talk on Maryland’s economic forecast, so you and your business don’t have to pay him for the same.
Here’s what we learned:
- The second half of 2008 will be worse than the first, because the federal income tax rebate checks are done stimulating the economy, and because the first round of foreclosures staved off by emergency state legislation to revive the housing market will hit the fan this Fall.
- In Maryland, we’re gaining jobs in the education and health sectors, leisure industries, natural resources/mining, and government services. We’re losing jobs in information technology, manufacturing, construction and finance.
- “Remember the days when you were always in settlement, in 2003 and 2004?” Basu asked the crowd. “Now, I hear a lot of you are still busy…you just haven’t seen the title agent for a while.” Times are lean now, with home sales down and a lot of unmoved housing inventory, but Basu predicted that 2009 and 2010 will be marquee years for Maryland Realtors, after the subprime mess sorts itself out, and BRAC-related development picks up.
- Home appreciation rates fell in the Baltimore metro by 4.5 percent between the second quarter of 2007 and the second quarter of 2008. In the Washington metro, for the same period, it fell 16.8 percent. Why such a big difference? Because Maryland places “tremendous restraints” on suburban development, and Washington’s metro area includes Northern Virginia, “and they believe the market should be allowed to function, yadda, yadda, yadda…” So in the last year, Prince William and Loudon Counties, Virginia actually built too much, according to Basu.
And finally a few memorable quotes from the Sage CEO:
On people who look at new homes but don’t buy them:
“It is almost like the new form of tourism.”
On the decline of American (and Maryland) manufacturing industries:
“We’re not going to stay the most prosperous people in the world by cutting each other’s hair and flipping burgers around and giving each other back rubs, no matter how good an idea it may be. We need to produce!”
On his young, fresh-out-of-college employees, and young employees in general, these days:
“These people, they’re all about flex time. They’re seldom at work, and when you review them, it better be a good review or else they quit!”
And finally, asked by a conventioneer which presidential candidate would be better for Maryland business, Basu waffled a bit, saying he didn’t officially give public endorsement to either candidate, but said that Obama, by expanding the federal government and increasing tax margins on the rich, will probably be better for Maryland, although not necessarily for the country’s economy as a whole.
All this, and plenty other zingers I didn’t write down, in under 90 minutes!
ROBBIE WHELAN, Business Writer
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