Regional Activity

Northwest

Nonagricultural wage and salary employment in the Northwest region increased by 125,500 jobs (2.6 percent) from the first quarter of 1998 to the first quarter of 1999. Idaho led the way with a 4-percent rate of growth, followed by Washington at 2.8 percent, Alaska with 2.1 percent, and Oregon at 1.7 percent. Unemployment in the region averaged 5.1 percent in the first quarter, ranging from 4.7 percent in Washington to 6.2 percent in Alaska.

High-technology industries, including biotechnology, computer hardware, information technology, and related support services, were the fastest growing sectors of the Washington economy. In Oregon, growth in the high-technology sector slowed substantially. Idaho growth was spurred by a strong increase in the service sector. Agricultural, fishery, and forest exports in the region continued to be severely affected by the Asian economic crisis. Continued layoffs at Boeing, expected to total 30,000 employees by 2001, slowed the rate of growth in the Puget Sound area.

The population of the Northwest continues to grow faster than that of the Nation as a whole. Recent estimates by the U.S. Bureau of the Census show that Idaho led the region with a 1.6-percent growth rate between July 1997 and July 1998, followed by Washington (1.3 percent), Oregon (1.1 percent), and Alaska (slightly less than 1 percent). Since the 1990 census, Idaho has experienced the third-highest rate of growth in the Nation. Washington ranks seventh nationally in absolute population change since 1990.

Single-family building permit activity in the Northwest region during the first quarter of 1999 totaled 12,811 homes, down 3 percent from first-quarter 1998 volume. Only Idaho, with 1,989 homes permitted during the period, recorded an increase (a modest 3 percent). Multifamily housing activity for the first 3 months of 1999 was also off last year's early pace, with permits issued for 4,944 units.

Home sales throughout the region remained strong during the first quarter. In Boise, Idaho, sales rose 3 percent in the first quarter of 1999 compared with the first quarter of 1998, and the median sales price rose nearly 5 percent to $107,000. In Portland, Oregon, sales rose by 9 percent, while the median price rose 3 percent to $149,000. Home sales in the Seattle metropolitan area during the first quarter of 1999 were up less than 1 percent from a very strong first-quarter 1998 volume. Large rent increases in close-in neighborhoods and low mortgage rates have resulted in a big increase in demand for condominiums. As the result of the high prices and tight supply in the Seattle area, demand has spilled over to other, more affordable Puget Sound markets. Sales in the Tacoma area for the quarter are up more than 40 percent over last year and sales in the Kitsap Peninsula (Bremerton metropolitan area) are up 30 percent.

Rental housing market conditions are balanced to tight throughout the Northwest region. The Puget Sound area still boasts the tightest markets, although conditions are easing. According to the Dupre+Scott Apartment Vacancy Report, the apartment vacancy rate in the Seattle area as of March 1999 was 4.2 percent, up from 3.1 percent in March 1998. Vacancy rates in apartments are also increasing in the Everett area due to layoffs by Boeing. Several builders have already scaled back plans in the area. The Anchorage rental vacancy rate remains unchanged at 4 percent and the Portland metropolitan area's rental vacancy rate was 6.2 percent in the first quarter of 1999, essentially unchanged during the past 12 months.

Most of the region's major market areas are well supplied with new private-pay or market-rate assisted-living units for the elderly. Although pockets of demand still exist in Portland and Seattle, many smaller communities in Oregon and Washington are at capacity or oversupplied. The rise in reimbursement rates and the increased competition in the market have caused existing assisted-living facilities in both States to accept some Medicaid residents. However, demand for affordable assisted living for low-income households remains very strong throughout the region.

Spotlight on Boise, Idaho

Boise in the 1990s has been, for its size, one of the hottest metropolitan housing markets in the West. As of the first quarter of 1999, the area had completed 11 consecutive years of job growth. Nonagricultural employment in the first quarter of 1999 totaled 206,225, a very strong 3.6-percent rate of growth (7,000 new jobs) during the past 12 months. The unemployment rate fell to 3.7 percent during the same period. Recent job growth in the Boise area has been concentrated in the services-producing sector. Led by business services, engineering/accounting/research services, and communications, services-producing employment increased by 5.9 percent. The Idaho Department of Employment Security expects that 75 percent of the jobs added to the local economy in 1999 will be by firms in this sector. Employment in the goods-producing sector declined during the past 12 months, with manufacturing losing approximately 1,000 jobs in the wood product, industrial machinery, and computer equipment industries. In a recent survey conducted by The Idaho Statesman, 78 percent of the State's electronics firms plan to hire new employees during the next 12 months.

The number of electronics firms in the Boise area has grown 46 percent in the past 5 years to more than 300. Employment by those firms has risen to more than 18,000 at an average wage of approximately $46,000. The short-term outlook for the industry in Boise is fairly stable. A recent survey of employers indicated that more than 80 percent of the companies were not planning any changes to the size of their workforces.

Beginning with the boom in job growth in 1993, single-family home production in the Boise area has averaged more than 4,400 homes annually. In 1998 permits were issued for 5,200 homes, a 15-percent increase over 1997. Single-family building permit activity in the first quarter of 1999 totaled 1,189 homes, a 3-percent increase compared with the same period a year ago. The existing sales market has been just as strong. According to the Ada County Association of REALTORS®, 1,518 homes sold in the first quarter, a 3-percent increase over the first quarter of 1998. The median sales price for the quarter was $112,000, up 4 percent. New home sales in the quarter totaled 616 units, up 7 percent compared with a year earlier. The median sales price for a new home was $119,000, up 5 percent from the first quarter of 1998. Market supply for all homes listed as of the end of the first quarter equaled 4.3 months, down by almost a month compared with a 5.1-month supply during the first quarter of 1998.

Rental housing market conditions were relatively steady over the course of 1998. During the first quarter of 1999, the apartment vacancy rate stood at 5.3 percent, similar to a year ago, according to a survey conducted by Ada Real Estate. The vacancy rate was lowest (3.7 percent) for studio and one-bedroom units, down from more than 8 percent a year earlier. The vacancy rate for three-bedroom units stood at 7.1 percent, unchanged from a year ago, as competition from the sales market kept the pressure on the market throughout 1998. The Boise market area is expected to continue to record overall vacancy rates in the 5- to 6-percent range during 1999, as approximately 500 new rental units are completed during the next 9 months.


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