Nothing disrupts consumer sentiment like uncertainty. And when it comes to real estate, nothing changes a market like unemployment. Right now, home owners in the Washington D.C. area who are uncertain about their job security are deciding if they should join the recently unemployed at put their homes on the market. A 56% increase in homes for sale, and mass terminations in the federal government employment sector is likely to depress values.
Federal workers make up 2% of the entire US workforce according to a story in The Guardian. The Department of Defense is the largest employer with more than 750,000 employees, not counting active-duty US military personnel. The Department of Veterans Affairs employs 480,000. About 79% of federal workers are employed outside of Washington D.C. The US Department of Agriculture has more than 100,000 employees across 4,500 offices nationwide. As layoffs take effect, rural communities with relatively higher percentages of residents employed with the federal government will feel the impact as people cut back on spending, or move to accept jobs elsewhere.
Some of the highest concentration of Federal employees where layoffs are likely to hit local economies the hardest are in Georgia, Alabama, Mississippi, Florida, Louisiana, Oklahoma, Arizona, New Mexico, Utah, Idaho, Arkansas, Kansas, West Virginia, Ohio, Pennsylvania, Wyoming, Montana, and North and South Dakota. Keep an eye on these areas to see if their real estate markets change for better or worse.