All the economic indicators are good, especially in Arlington. The June unemployment rate is 4.3 percent, well below the region’s 5.3 percent which is well below the nation’s 9.6 percent rate. Of course we had many months of below 2.0 percent unemployment for awhile, with a chokingly tight labor market. This alone makes us one of the “least stressed” communities in the country.

Our office market is doing great, with vacancy rates at 7.5 percent overall and 6.4 percent in the R-B Corridor; supply can even be described as tight. Many companies are adding jobs, Deloitte and BAE Systems perhaps being the most notable, and taking more office space to accommodate more staff. The market will tighten even more in the next few years. Even though Arlington has about half of all new office construction in Northern Virginia, DARPA and Virginia Tech will take two of the buildings and the remaining two buildings in Clarendon will likely deliver full or nearly so. With no new supply under construction this year, there will not be anything added to the market before late 2012 at the earliest. Prices of recent sales indicate that values have stabilized, meaning that commercial assessments should be flat or slightly improved.

Arlington never had a foreclosure crisis, with foreclosures below 1 unit per 1,000, and the residential market has stabilized at a much below average volume. The market is readily absorbing the new units being delivered that were started in better times, but there have been no construction recent starts of multi-family projects, excluding those providing subsidized affordable housing. In March, retail sales were 11.2 percent above the prior year and meals taxes were also up by 9.2 percent over the first 3 months of 2010.

So why isn’t our good economic performance reflected in our perceptions of the economy?

The fact is, things just don’t feel normal. Our economy has stabilized at a level below the peak and the lasting changes are noticeable – and it may be Arlington’s “new normal”. New restaurants in Clarendon are evidence of the ongoing potential of the neighborhood, and an indicator that independent restaurateurs are not being priced out (as some had feared would become Clarendon’s fate.) Also, while some retail vacancies in popular areas have been quickly snapped up, others have lingered on the market a little longer with landlords having to look beyond premier tenants to fill spaces.

The Apple store in Clarendon is always packed, but despite heavy traffic locally, Barnes & Noble has announced that its business is for sale. However, is Barnes & Noble’s fate truly a reflection on Arlington’s economy or merely the market’s response to changing retail trends? Other businesses have changed as well; despite the recent high profile move of Northrop Grumman to the Washington, D.C. region, Arlington has welcomed major expansions and even a headquarters move from companies who have been careful to minimize political and media involvement. Their concern? Perceptions of the public and their clients in this “new normal”.

Construction is almost entirely dead, with public projects comprising almost all that is being built. There is no market rate apartment construction now, while we had more than 4,000 units under construction only three years ago. Home sales prices have stabilized, albeit at somewhat lower prices and volumes. Things just don’t feel the same as they were – because they aren’t.

So, if we are waiting for our economy to totally come back, it likely won’t happen for a very long time. We need to settle – if we can even call it “settling” – for doing better than anyone else. This “new “normal” may feel very different from what we had become used to, but is actually very good in comparison to what most of the rest of the country feeling.