We’ve been bombarded in recent months with indications — anecdotal and statistical — that the Beltway is becoming a vortex, sucking in the wealth of the country. The three richest counties in the country in 2007, according to the Census Bureau, were all within commuting distance of the Capitol. Northrop Grumman is moving its national headquarters here. Federal employees find the economy is getting better, while everyone else finds it’s getting worse. There are plenty more indications, and please add more in the comments.
But here are two new ones:
1) David Reilly’s commentary in Bloomberg today covers the trend of investors increasingly turning to government instead of data to see which industries are most promising. Two tidbits:
A recent quarterly letter to investors in Third Point LLC hammered this home. In the November missive, the hedge fund’s well-known founder, Daniel Loeb, said, “While I have never professed to have a crystal ball that forecasts market direction, I can make one prediction with certainty: It is a bull market in government regulation and intervention.”…
The only clear thing is that what happens in Washington will consume folks on Wall Street for some time to come.
2) And this Wall Street Journal piece points out that rents are doing far better in the DC area than in New York:
Rents declined in almost all of the 79 American cities tracked by Reis Inc., a New York based-research firm, in the fourth quarter of 2009. The largest fall was in New York, where average effective rents — or the net amount tenants pay after landlord concessions — fell nearly 20% to $44.69 per square foot annually. It was the sharpest decline in rents ever recorded by Reis since it began compiling data in 1981.
By contrast, average rents in Washington were $41.77 per square foot, down 3% annually. Reis estimates that by the end of this year, rents in New York will come down to around $41.07, slightly below their estimates for Washington of $41.27.
[note: orginally, this post claimed that rents were up in the D.C. area. They aren’t, according to the WSJ piece, they just haven’t declined nearly as much.]
