The strong rate of employment growth during the 12 months ending May 2000 added 735,500 nonagricultural jobs in the Southeast, a 3.1-percent rate of increase. Florida had the greatest percentage increase (4.7 percent) and the greatest total increase during the period, to 320,500 jobs. Job growth in Georgia was also strong at 3.5 percent, for an additional 137,300 jobs. Gains in the services sector provided slightly less than half of the new jobs in the region.
Despite layoffs announced for a number of Atlanta's high-profile corporations early in the year, job growth remained strong. The Atlanta metropolitan area added 78,100 jobs in the 12-month period ending June 2000, an increase of 3.6 percent above year-earlier figures. In North Carolina, the Charlotte, Greensboro, and Raleigh-Durham metropolitan areas continued to experience healthy rates of growth in the 2- to 3-percent range, according to information released by the Center for Economic Studies at Wake Forest University. Unemployment in the three areas remained very low, less than 3 percent in Charlotte and Greensboro and less than 2 percent in the Raleigh-Durham area.
The total number of housing units authorized by building permits, 228,053, was down by 5 percent for the 8 States in the Southeast region during the first 6 months of 2000, compared with the same period in 1999. Single-family permits were down 5 percent overall. Only Alabama and Florida recorded increases.
The Memphis Area Association of REALTORS® reported that 1,192 sales of properties were listed with the Multiple Listing Service in June 2000, compared with 1,221 for June 1999, a decline of 2.4 percent. In spite of the decline in sales for June, REALTORS® reported that the market improved as mortgage rates declined slightly in the Memphis area. Closings for total sales of new and existing homes in Nashville in the first 6 months of 2000 were down 2.6 percent, according to the Greater Nashville Association of REALTORS® Inc.
For the Caribbean Field Office, FHA loans endorsed in the first half of the year declined by 20 percent to 7,026 homes, compared with the same period a year ago. The decline in sales was attributed to increases in mortgage interest rates. FHA-insured mortgages comprised over 75 percent of the market in Puerto Rico.
In Mississippi, plans were announced recently for the development of a $1.7 billion planned community called "Tradition" in the Biloxi-Gulfport-Pascagoula metropolitan area. The community would encompass 4,600 acres and have 25,000-30,000 residents when completed in 15-20 years. Construction on the first homes will begin in the Fall of 2001.
Multifamily housing permits declined 6 percent in the 8 States during the first 6 months of 2000, compared with the same period in 1999. Activity was up in 3 of the 8 States; the most significant increases occurred in Georgia (51 percent) and Tennessee (61 percent). The Atlanta metropolitan area was the number one multifamily market in the Nation in the first half of 2000. Multifamily building permit activity was up 77 percent to 9,134 units. A large part of the increase in the Atlanta area was due to increasing activity in several of the exurban counties and a large increase in condominium construction in Atlanta. Substantial increases in Memphis and Nashville resulted in Tennessee's large gain.
Multifamily permit activity in the West Palm Beach-Boca Raton metropolitan area, 1,785 units through June, was a 22-percent increase over the first half of 1999. However, the rental market appeared to show some effects of the more than 2 years of relatively high multifamily production. After registering increases in 5 of the last 6 quarters, occupancy was down during the second quarter of 2000. Rents were also relatively flat during the last three quarters. The median sales price for a new home as of the second quarter was up 2.9 percent from the first quarter to slightly over $192,000. New home sales for 2000 were behind last year's pace. Sales of new condominium units during the first half of this year, which averaged $161,000, were down sharply compared with the first half of 1999. Sales of existing single-family detached homes were down for the third straight quarter, and prices were flat.
Spotlight on Orlando, Florida
The Orlando metropolitan area, consisting of Lake, Orange, Osceola, and Seminole Counties in central Florida, had a 1999 population in excess of 1.5 million, an increase of more than 300,000, or 25 percent, since 1990. Nonfarm employment in the area increased from 874,600 in May 1999 to 925,200 in May 2000. This represented an increase of 50,600 jobs, or 5.8 percent, compared with an increase of 4.8 percent Statewide. During the 1990s, the local economy added more than 270,000 nonfarm jobs, an increase of more than 44 percent.
The Orlando area receives over 40 million visitors a year. Disney World alone is reported to employ more than 50,000 people at its site. It is the largest of several local tourist attractions, including Universal Studios and Sea World. The services sector represents more than 40 percent of all employment in the metropolitan area. Reflecting the dominance of low-paying service jobs, the area as a whole has a low median income. However, a high-technology sector is emerging, particularly around the University of Central Florida. Lockheed Martin, a producer of inflight simulation systems, information technology, and automated test equipment, employs approximately 1,500 people in the area. A second high-technology area is also developing in Seminole County.
The unemployment rate in the area, which was below 3 percent for the past 12 months, dropped to 2.6 percent in May. Labor shortages are common, and large organizations such as Disney World actively recruited from out of State and, in some cases, overseas for summer employees.
The Orlando area has been experiencing a residential construction boom since 1990, with activity accelerating over the past 3 years. From 1990 through 1999, permits were issued for more than 186,000 housing units, of which 153,500 units (82 percent) were single-family homes. Until 1996, single-family home production was relatively stable, averaging approximately 11,000 homes annually. However, beginning in 1996, homebuilding in the Orlando area steadily increased to more than 16,300 in 1999. Activity in the first 6 months of this year totaled 8,013 homes. As of the first quarter of 2000, the average sales price for new homes (excluding custom homes) was $169,900, an increase of 11 percent over the average for the first quarter of 1999. According to the Florida Association of REALTORS®, the median sales price for an existing home as of May was $106,200, up from $103,500 for May 1999.
Multifamily housing building permits in the Orlando metropolitan area have followed the same pattern as single-family activity. From 1990 through 1996, multifamily permits averaged approximately 4,500 units annually but increased to almost 7,700 in 1997, and to an average of almost 12,000 units annually in 1998 and 1999. As the large number of units permitted in 1998 and 1999 were completed, rental market conditions became more competitive. Charles Wayne Consulting, Inc. conducted a survey of more than 130,000 rental units in March of this year and reported that the vacancy rate had risen to 7 percent, from 5 percent in March 1998. The same survey found construction under way on more than 13,000 rental units. The median contract rent for all two-bedroom units in the March survey was $700, up 11.7 percent since March of 1997. Multifamily building permit activity for the first 6 months of 2000 fell almost 40 percent to 4,552 units, suggesting the industry is responding to the prospects of a soft market.
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