Economic conditions strengthened in the Northwest during the second quarter, but overall the region continued to register employment declines. Nonfarm wage and salary employment averaged 5.1 million during the 12 months ending June 2003, down 0.5 percent. The rate of decline was a significant improvement compared with the 1.6-percent decline during the previous 12-month period. Alaska continued to be the bright spot for the region with employment up 2 percent because of gains in the education, health services, hospitality, and government sectors. Idaho also gained jobs during the period, with employment up 0.4 percent to 568,000, primarily attributable to strength in the construction and health services sectors, which offset declines in the manufacturing, high-technology, and tourism industries. Employment in Oregon was also down 0.3 percent because of declines in manufacturing and government employment.
In Washington employment declined by 0.2 percent compared with a nearly 2-percent annual rate of decline in the previous 12-month period. The aerospace industry continues to struggle due to job losses at Boeing. Since September 2001 the Puget Sound region (Bremerton, Seattle-Everett, and Tacoma) has lost nearly 22,000 jobs at Boeing through layoffs and attrition, and the company recently announced plans to reduce employment nationwide by an additional 5,000 jobs beginning in July, which could result in total job losses in the area of 25,000 or more.
Unemployment rates in the region held steady during the quarter. The regional unemployment rate for the 12-month period ending June 2003 was 7.1 percent, unchanged compared with the previous 1-year period. Rates ranged from 5.6 percent in Idaho to 7.7 percent in Alaska.
The demand for homes in the Northwest states remained strong through the second quarter. In the Seattle metropolitan area existing home sales rose 11 percent to 36,482 homes in the 12 months ending June 2003, according to data from the Northwest MLS. Sales were up 14 percent in the Tacoma metropolitan area and up 8 percent in the Bremerton area. Sales were also on the upswing in the Olympia area and in smaller retirement markets such as Whidbey Island and Cowlitz County. The median sales price in the Seattle metropolitan area increased 8 percent in the past 12 months to $265,000. In the Tacoma area the median sales price was $174,000 and $172,000 in the Bremerton area. Realtors reported strong demand from all segments of the market: move-up buyers, retirees, and first-time buyers.
Idaho, Oregon, and Alaska sales markets also exhibited strong demand for homes. Sales of existing homes in the Boise metropolitan area rose 10 percent, and the median sales price rose 4 percent to $127,000 during the 12 months ending June 2003. The Portland-Vancouver metropolitan area registered a 9-percent increase in existing homes sales and the median sales price reached $178,300, a 6-percent gain in the past year. In the remainder of the major markets in Oregon existing home sales for the 12 months ending May 2003 totaled nearly 46,000, up 7 percent compared with the year-earlier period.
Sales of new and existing homes in the Anchorage metropolitan area reached record levels during the quarter and totaled 3,140 for the 12-month period ending June 2003, a 6-percent increase compared with a year earlier. The average sales price rose 6 percent to $226,000.
Single-family building activity totaled 34,200 permits in the first half of 2003, up 11 percent compared with 2002 because of continued strong demand for new homes. The volume of building permit activity in the Puget Sound area totaled 9,500 homes, also 11 percent above that of a year ago.
Rental market conditions were competitive throughout most of the Northwest region during the quarter. However new units entering the market, slower economic conditions, and increasing homeownership all contributed to the softening market conditions. The Boise area rental vacancy rate rose 2 percentage points over the past year to 9 percent, and the Portland area vacancy rate rose from 7.5 to 8.5 percent. In Puget Sound rental markets the rental vacancy rate was estimated to be 8 percent in the Seattle metropolitan area, up slightly compared with a year ago. Market conditions were balanced in the Tacoma and Olympia areas with vacancy rates estimated at 6.5 and 4.5 percent, respectively. Market conditions in the Eastern Washington metropolitan areas, Spokane and Richland-Kennewick-Pasco (the Tri-Cities), were balanced to tight. Multifamily permit activity totaled 5,900 in the first half of 2003, a 20-percent increase compared with the first 6 months of 2002.
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