Five takeaways from ODU economists’ forecast
At the 2023 Annual Economic Forecast at ODU's Dragas Center, economists predict what 2023 will bring to Hampton Roads. Here are five takeaways.
1. Virginia’s labor market is rebounding slowly.
According to the analysis it is slower to rebound from COVID-19 than other states in the south. “The major metro areas south of us not only have recovered from the loss in labor force, they have actually increased their labor force,” said Dr. Vinod Agarwal, professor at ODU’s Strome College of Business. “They are going much faster and we are simply not.”
2. Remember that big military spending bill Congress just passed?
It’ll bolster Hampton Roads’ growth in 2023. “Unless there are serious issues in the US Congress like the debt ceiling crisis,” said Agarwal, “I do not see a recession in Hampton Roads – primarily, again, because of increases in Department of Defense spending.”
3. The Port of Virginia is still hitting cargo records, and it doesn’t look like that will stop soon.
Investments in the port are paying off, said Agarwal – Virginia handled its all-time high in cargo tonnage in 2021, then topped it in 2022. It also upped its efficiency. “We did not have congestion on the port,” Agarwal said, “despite the congestion news we heard from the ports especially on the west coast.”
4. Mortgage rates are likely to go up in Hampton Roads, but house prices will stay steady.
Agarwal said it’s still a seller’s market – homes are in short supply, and they sell quickly. “My real estate friends used to tell me in 2021 and 2020 – the name of the game is not to sell a home, it’s to list a home,” said Agarwal. “You list a home and you sit back and relax. The buyers will be coming.”
5. Although the 757’s hospitality industry has rebounded, hotels face a real challenge from independent rentals.
Using data from Virginia Beach, Agarwal showed revenue from short-term rentals skyrocketing during the pandemic. “They have been taking a larger slice of tourism dollars,” he said. The short-term rental market in Hampton Roads is as contentious as anywhere – localities lose out on tax revenue when tourists stay in unregulated and untaxed rentals.