In the 12 months ending June 2003 average nonfarm employment in the Mid-Atlantic region declined by 15,300 jobs, or 0.1 percent, to approximately 13.4 million. Although federal government employment and contracting helped to maintain growth in the District of Columbia and the Maryland portion of the Washington, D.C. metropolitan area the gain in the District itself was less than 1 percent, and in Maryland it was only 0.2 percent. Pennsylvanias decline of 0.3 percent reflected losses in the manufacturing sector that offset gains in the service-providing industries. Delaware again recorded the largest decrease for the 12-month period, almost 1 percent, with continued losses in the manufacturing and financial activities sectors as banks and credit card companies continue to respond to the economic slowdown by eliminating back-office jobs.
The unemployment rate for the Mid-Atlantic region was 5.1 percent for the 12 months ending June 2003, up from 4.8 percent during the same period in 2002. The stability of the rates in Maryland and Virginia, particularly in counties in the Washington, DC metropolitan area, helped maintain the regional rate at almost 1 percentage point below the national average. Pennsylvania and West Virginia unemployment rates increased 0.5 and 0.7 percent, respectively, because of continued losses in manufacturing employment. The average rates in the Washington and Baltimore metropolitan areas for the 12 months ending June 2003 remained essentially unchanged. Losses in manufacturing in the Philadelphia metropolitan area, and losses in almost all sectors in the Pittsburgh metropolitan area resulted in the largest increases in unemployment rates (0.7 and 0.8 percent, respectively) among the major metropolitan areas in the region.
Despite job losses and higher unemployment favorable financing continues to bolster demand for new sales housing in the Mid-Atlantic region. The number of single-family units authorized by building permits for the 12 months ending June 2003 totaled approximately 107,900 for the region, an increase of 6.6 percent over the comparable 12-month period ending in 2002. Delaware recorded a 16-percent increase in single-family permits for the 12 months ending June 2003 compared with the previous period. The District of Columbia, Norfolk, and Wilmington metropolitan areas all recorded gains of nearly 10 percent in single-family activity.
Existing home sales in the Mid-Atlantic region also continued to be strong, reflecting the availability of low interest rates and competitive lending. The Maryland Association of REALTORS® reports that sales for the 12 months ending June 2003 increased 3.5 percent compared with the 5.7-percent increase recorded between June 2001 and June 2002. In Maryland the median sales price of an existing home rose 15 percent to $188,500. The sales pace in the Baltimore metropolitan area slowed as sales for the 12 months ending June 2003 were 3.3 percent higher than a 5.7-percent increase during the comparable period ending June 2002. The median sales price for the 12-month period was $162,970. Sales in Pennsylvania for the 12-month period ending March 2003 (the date of the most recently available data) reflected an increase over the previous 12-month period of 2.6 percent, an average increase of 380 units per month.
The Virginia Association of REALTORS® reports that existing home sales for the 12 months ending May 2003 totaled 113,600 homes, an average of 9,470 units per month and a 6-percent increase compared with the same period in 2002. The median sales price rose 10 percent to $159,300 as of May 2003. Almost one-third of the Virginia sales during the most recent 12-month period occurred in the Northern Virginia suburbs of the Washington, DC metropolitan area. Sales in the Northern Virginia area rose 6.6 percent compared with the previous 12 months, and the market continues to record the highest median sales price in the region, $291,900, which is 12 percent higher than a year earlier.
The pace of apartment construction in the Mid-Atlantic region as measured by multifamily building permit activity for the 12-month period ending in June is 18 percent above the previous 12-month period. Permits totaled approximately 27,000 units during the 12 months ending June 2003. The Washington, DC metropolitan area accounted for approximately 11,300 multifamily units, with approximately half of the total in the Northern Virginia suburbs. The 2,200 multifamily permits issued in the District of Columbia are almost 5 times the number issued during the previous 12 months.
Throughout the region advantageous financing continues to aid renter households moving to homeownership, resulting in looser apartment markets in the regions largest metropolitan areas. The overall vacancy rate in class A properties, including those in leasing stages, in the Baltimore metropolitan area is 7.1 percent, according to Delta Associates. Class A vacancies in Baltimores downtown market remain high at 12.7 percent, and approximately 1,350 units are in the development pipeline. The market for class A apartments in the Philadelphia metropolitan area remains relatively balanced on the whole, but stable conditions in the Pennsylvania suburbs are offset by softening in the New Jersey suburbs. Currently the development pipeline in the metropolitan area is estimated at 5,300 units in the planning stages. Overall vacancies in class A highrise properties in Philadelphias Center City increased to 10.3 percent as four properties began lease-up at the end of second quarter. The absorption rate for recently completed developments in Center City has increased slightly to 12 units per month. However, with an estimated 2,000 units planned to enter the market during the next 36 months, conditions bear watching. The overall vacancy rate in class A properties in the Washington, DC metropolitan area has declined to 7.1 percent. Rates also have declined slightly in the Northern Virginia suburbs but have increased to 6.8 percent in the Maryland suburbs, which is attributed to the increase in new units on the market. At the current absorption rate the vacancy rate can be expected to increase significantly if all 4,800 units in the pipeline enter the market during the next 36 months.
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