CBS News projects that Republican gubernatorial candidate Bob McDonnell will win the governor's race over Democratic candidate Creigh Deeds.
McDonnell's victory is the first triumph for a Republican party looking to rebuild after being booted from power in national elections in 2006 and 2008. It also was a setback for the White House in a swing state that was a crucial part of President Obama's electoral landslide just a year ago.
Unofficial results showed McDonnell, a conservative and former state attorney general, with nearly two-thirds of the vote over Democrat R. Creigh Deeds. He will be the state's first Republican governor in eight years.
"I just got tackled by my five kids and my wife, and there are a lot of tears on my cheeks right now," McDonnell told The Associated Press.
Meanwhile in New Jersey, CBS News exit polls indicate a close race for governor between Democratic incumbent Jon Corzine and Republican challenger Chris Christie, with independent candidate Chris Daggett a distant third.
Exit polls from Virginia and New Jersey showed that an overwhelming majority of voters in both states said they are worried about the direction of the nation's economy over the next year, a similar trend to Election Day in 2008.
In both states the economy topped the list of issues that mattered most to voters in their choice for governor - in Virginia health care was second, while in New Jersey the second choice was property taxes.
In addition, exit polls also showed the impact of Mr. Obama on the race. Majorities of voters in both states said the president was not a factor in their vote. Those who said Mr. Obama was a factor in New Jersey divided as to whether their vote was a vote for the president or against him. In Virginia, slightly fewer voters said their vote was for Mr. Obama than against him. (Read more analysis of the exit polls in both states.)
In Virginia, McDonnell's decisive 62 percent majority of the independent vote was a key to his victory.
"McDonnell's victory in this off-year election has as much to do with who didn't vote as who did," CBS Poll Analysis Fred Backus said. "African Americans broke overwhelmingly for Deeds, but though they make up 20 percent of Virginians and voted proportional to their population in 2008, they made up just 15 percent of the voting population today in Virginia. Voters under 30 made up only 10 percent of the voters in Virginia - half the percentage that turned out in 2008 - and nearly half of those who did show up to the polls voted for McDonnell." (Read more on why McDonnell won in Virginia)
Read more Election Day Coverage:
What McDonnell's Win Means for the GOP, Obama
McDonnell Won Due to Turnout, Independents
Exit Polls in Va. and N.J.: The Obama (Non) Factor?
Washington Unplugged: A Referendum on Obama?
Off-Year Elections: Just Like Preseason Games
Schieffer: Hard Right Driving the GOP Train
Beyond the immediate outcome of the elections, results in these races and a handful of other contests nationwide will go under the microscope as the nation's political class looks for clues about the future direction of the country, chances that Mr. Obama's Democrats will retain power in the 2010 midterm vote or signs of a resurgence among wobbly Republicans.
"The Republican Party's overwhelming victory in Virginia is a blow to President Obama and the Democrat Party," Republican National Committee chairman Michael Steele said in a statement. "It sends a clear signal that voters have had enough of the president's liberal agenda."
But the president's aides downplayed the impact of the off-year votes.
"I don't think looking at the two gubernatorial races you can draw with any great insight what's going to happen a year from now," said Obama spokesman Robert Gibbs.
CBS News chief Washington correspondent Bob Schieffer also weighed in.
"I'm not one who thinks that local candidates are ever helped out much by a national candidate who comes in. These two races in both Virginia and New Jersey were so much about local issues -- about property taxes, about the economy," he said.
"Predicting national trends from off year elections is like predicting the World Series winner from Spring training," added CBS News senior political correspondent Jeff Greenfield.
CBS News political director Steve Chaggaris notes that Republican excitement will be tempered by the reality of the continued debate within the Republican Party about whether to emphasize its right-wing base or to soften up in an attempt to appeal to more moderates.
"McDonnell's success was partly based on downplaying his social conservative views and making a somewhat moderate play for independent votes," he writes. (Read more analysis from Chaggaris)
In other races, New York Mayor Michael Bloomberg was expected to cruise to a third term. Atlanta, Houston, Boston, Detroit and Pittsburgh also were electing mayors.
A special election in New York state's 23rd congressional district promised to be interesting. There potential 2012 Republican presidential aspirants the most conservative among them have been lining up behind a third-party candidate, Doug Hoffman, who is running under the banner of New York's Conservative Party.
His heavyweight Republican backing from the likes of Sarah Palin, last year's Republican vice presidential candidate; Republican Minnesota Gov. Tim Pawlenty; and former Tennessee Sen. Fred Thompson, led Republican state Assemblywoman Dierdre Scozzafava to suspend her campaign abruptly and endorse her Democratic opponent, Bill Owens.
Until Scozzafava dropped out, the race pitted conservatives against the moderate wing of the Republican Party. Hoffman painted Scozzafava as too liberal, specifically noting her support of abortion rights and same-sex marriage. He told voters that she was not the kind of Republican they want representing their interests in a Democratic-led Congress.
"This is the most interesting race on the card by far, because what you have is this third-party conservative who literally pushed a moderate republican out of the race," Schieffer said. "The Republican Party is really split and it is the conservatives who seem to have the juice right now. It's very much like what Democrats went through in 1972. The party activists on the left were so upset with mainstream candidates that in an effort to purify their party they pushed it so far to the left that they nominated a very liberal George McGovern for president. Now it's conservative Republicans who are upset with their mainstream candidates. They want to push the party to the right. And if in this frustration continues, I think you're going to see more moderates challenged next year in republican primaries by conservatives."
The White House suggested those developments show that hard-liners are taking over the Republican Party, and the trend will affect the 2010 elections. On Monday, Gibbs predicted, "This is a model for what you'll see throughout the country."
Voters also will decide ballot measures in a number of states.
In Maine there is a referendum on gay marriage, whether to accept or reject a same-sex marriage law approved by legislators in May.
In Washington, voters will decide whether to keep a legislature-approved "everything but marriage" domestic partnerships law, which grants registered partners the same legal rights as married couples.
Ohio voters will decide on legalizing casino gambling.
© MMIX The Associated