Employment growth was relatively strong in the New York-New Jersey region during the 12-month period ending May 2000. Employment in New York State increased by 205,700 jobs, or 2.4 percent; the construction sector reported the biggest percentage gain of 6 percent. New Jersey employment was up 73,000 jobs, or 1.8 percent. New York's unemployment rate was 4.3 percent in May 2000, down from 5.0 percent in May 1999. New Jersey's unemployment rate was 3.6 in May, one of the lowest rates in the past 30 years. Employment in New York City increased by 100,400 jobs between May 1999 and May 2000, or 2.7 percent. Job growth was recorded in every sector, except for manufacturing. Services added the most jobs and was led by business services.
The demand for new office space across the Hudson River from New York continues to be very strong. Chase Manhattan Bank has leased 1.1 million square feet of space in two new office towers in the Newport office complex in Jersey City developed by Samuel Lefrak. The space is reserved for 4,000 employees currently working in buildings in Manhattan. Goldman Sachs recently announced plans to erect the tallest building in Jersey City, a 45-story tower at the former site of the Colgate toothpaste factory. Merrill Lynch & Co., Inc., also intends to build an office tower nearby.
Overall the sales housing market in New York State, according to the New York State Association of REALTORS®, got off to a slower start in 2000 than in the two previous record-setting years. Sales for the first half of the year were down less than one-half of 1 percent compared with the second quarter of 1999. The Association characterized the market as strong despite the decline and expects it to remain so throughout the year 2000. Sales in New Jersey were almost unchanged during the first half of 2000.
The Manhattan sales market is very hot. According to combined data from the real estate brokerage firms of the Corcoran Group and Douglas Elliman, sales prices in upper Manhattan in the area south of West 116th Street and East 96th Street during the first half of 2000 increased 45 percent to an average price of over $745,000. The significant increase is due to the large number of new condominiums sold.
The Nassau-Suffolk sales market is less frenzied. Inventories have been rising as homes stay on the market longer than they did last year. In Buffalo, inventories declined and the Greater Buffalo Association of REALTORS® reported that May 2000 was the second most active sales month of the decade.
Single-family building permit activity in New York State totaled 11,636 homes in the 6 months of the year 2000, down 3 percent from the same period a year ago. Activity in New Jersey was also down by approximately 6 percent to 11,788 homes. Multifamily building permit activity during the first half of this year was up significantly in both New Jersey and New York, by 25 and 27 percent, respectively.
The rental housing market continued to be tight in New York City and the surrounding suburbs. On Long Island, occupancy rates of 97 percent or more were common, and many complexes reported 100-percent occupancy and waiting lists. Most of the apartment development in recent years has taken place in Suffolk County, where land is more readily available than in Nassau County. Much of the new rental housing has been high end or housing for seniors. One of the first luxury rentals built in recent years was a 312-unit rental complex in Smithtown, with contract rents of $1,500 for a one-bedroom unit and $2,000 for a two-bedroom unit. This development was so successful that the developer built four additional rental complexes. A number of higher rent luxury developments are under construction. Several rental complexes for people age 55 and older are under construction in Oakdale and Sayville.
New Jersey has implemented a new program called Downtown Living, which is aimed at reintroducing middle-income housing into urban neighborhoods. It expands a pilot program begun in 1998 that resulted in the construction of 131 apartments in Morristown and 82 units in New Brunswick. State loans under the new program are made available to developers at interest rates as low as 1 percent. Projects approved for Paterson and Bayonne will be the first middle-income housing in these communities in several decades. In Paterson, the Boris Kroll textile mill will be converted into 189 rental units. In Bayonne, the loan will help construct 51 middle-income apartments on a vacant lot.
Spotlight on Albany-Schenectady-Troy, New York
Nonagricultural employment in the Albany-Schenectady-Troy area increased by 7,400 jobs, or 1.6 percent, to 462,100 persons in the 12 months ending in May 2000. The area experienced record high employment levels and correspondingly low unemployment rates. As of May, the unemployment rate declined to 3.1 percent.
The labor market has a skilled work force, and because Albany is the State capital, the government sector has provided stability. Federal, State, and local government comprise approximately 25 percent of the total employment in the metropolitan area. Manufacturing, once one of the area's major sectors, now comprises less than 10 percent of nonagricultural employment.
The population of the metropolitan area totaled 869,474 persons as of July 1, 1999. Population growth since 1990 has been less than 1 percent.
Sales prices for existing homes have been fairly stable in recent years. The median sales price in 1999 was $125,000. The improving local economy has effected an increase in sales activity; sales in 1999 increased to 7,105 homes, 8 percent above the 1998 volume. As of the first quarter of 2000, the average sales price increased to $128,000, and sales for the quarter were up 9 percent to 1,170 homes, according to the New York State Association of REALTORS®.
Residential construction in the Albany-Schenectady-Troy area in the 1990s was relatively steady, paralleling the modest growth in the local economy. Single-family building permits during the 1990s averaged approximately 2,200 homes annually. Multifamily permits averaged 690 units annually, many of which were in the area's more affluent suburbs.
The rental housing market in the area was balanced, with the vacancy rate in the range of 6 to 7 percent. The market in newer and more upscale developments was much tighter. Vacancy rates in the older rental properties, especially in the central cities of Albany, Schenectady, and Troy, tended to range from 7 to 10 percent. Newer HUD-insured rental properties developed in the area have rented up quickly, and occupancy rates of 97 percent were typical. Recent rent increases in newer properties have been in the 2- to 3-percent range.
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