For the 12 months ending June 2001, wage and salary employment in the Mid-Atlantic region rose 1.5 percent, or 194,300 jobs. The annual rate of growth in Virginia remained very strong at 2.2 percent followed by a 1.8-percent increase in Maryland and a 1.4-percent increase in the District of Columbia. The Washington metropolitan area led the regions major markets with a 3.9-percent increase in jobs during the period. Employment rose 2.6 percent in Richmond, 2.2 percent in Baltimore, and slightly more than 1.0 percent in Pittsburgh, Richmond, and Norfolk. Philadelphia recorded a 0.4-percent decline.
Labor markets throughout the Mid-Atlantic region remained relatively tight despite rising unemployment rolls in most areas. The unemployment rate increased by 0.5 percent in both Virginia, at 2.7 percent, and Pennsylvania, at 4.5 percent. Among the metropolitan areas, Washington (2.4 percent) and Richmond (2.8 percent) recorded the lowest rates.
After registering employment gains for the first time in nearly a decade in 1999, the District of Columbias economic growth continued at an impressive pace in the first half of 2001. As a result, the number of commercial and residential developments in the city is increasing. The new Washington Convention Center, opening in 2003, is the largest public works project in the Districts history. This 2.3-million-square-foot facility is expected to generate more than $1.4 billion annually for the local economy.
In much of the Mid-Atlantic region, single-family building permit activity in the first half of 2001 remained relatively stable. Permits were issued for a total of 53,646 homes in the first half of 2001; this is 1 percent below the volume for the same period in 2000. Delaware was the only State to record a significant increase, 17 percent, on a small base. Activity declined 5 percent in Pennsylvania and 4 percent in Maryland. Permit activity in Virginia in the first 6 months of the year totaled 21,669 homes, up only 1 percent. Except for Wilmington, Delaware, single-family building permits dropped notably in every major metropolitan area in the Mid-Atlantic. Pittsburgh recorded the largest decline, 14 percent, followed by Richmond at 8 percent.
A robust economy continued to boost housing demand in the Washington metropolitan area. Existing sales through June 2001 totaled 56,319 units, up 15 percent compared to the first half of 2000. May also was a banner month as sales surpassed the 10,000 mark, the highest monthly total ever. Sales prices also continued to escalate throughout the metropolitan area. The median sales price for an existing home in the Northern Virginia suburbs increased 10 percent to $230,500. The average number of days a home was on the market in Northern Virginia dropped to 18 days.
A strong economy, lower interest rates, and a notable increase in the inventory of homes available for sale caused existing home sales to boom in Virginia. The Virginia Association of REALTORS® reported 47,861 homes sold during the first 6 months of 2001, up 11 percent compared to the same period in 2000. The median sales price for the State reached $135,877.
Multifamily housing construction activity in the Mid-Atlantic region was very strong in the first 6 months of 2001. A total of 13,500 building permits were issued, a 39-percent increase over the comparable period in 2000. Activity in Virginia increased 67 percent due to large increases in Northern Virginia and Richmond.
Most of the rental housing markets in the Mid-Atlantics major metropolitan areas remain balanced or tight. Vacancy rates were extremely low in many parts of the Washington metropolitan area. The Northern Virginia suburbs continued to be the hottest rental market in the region. According to Delta Associates, nearly 9,000 units entered the market during the 12 months ending June 2001, the highest level in 12 years. Despite the new units, Class A apartment rents are still experiencing double-digit increases on turnover, and few developments are offering concessions. Nearly 24,000 new units are estimated to enter the market over the next 3 years. Rental market conditions also grew tighter in the Maryland suburbs and the District. Given the demand for new rental units, some local sources consider the current construction pipeline in the Maryland suburbs to be at a critically low level.
In Philadelphia, the rental market was balanced with tight market conditions prevalent in Center City and Bucks and Camden Counties. Demand continues to be strong for high-end luxury apartments, but market conditions should ease during the next 18 months, given the 5,700 units in the construction pipeline. Market conditions were more soft than balanced in Northeast Philadelphia and Gloucester and Salem Counties.
Spotlight on Pittsburgh, Pennsylvania
The Pittsburgh metropolitan area, consisting of Allegheny, Beaver, Butler, Fayette, Washington, and Westmoreland Counties, recorded little change in the population during the past decade. Between 1990 and 2000, the population of the metropolitan area declined by 1.5 percent, or 36,116 persons, to just under 2.4 million. Nonagricultural employment also has been static recently. In the 12 months ending June 2001, nonagricultural employment in the Pittsburgh metropolitan area totaled 1,140,800 jobs, essentially unchanged from June 2000. During this period, employment growth in the construction, wholesale and retail trade, and the services sectors was offset by losses in other sectors of the economy, including manufacturing, health and business services, and government.
Recent large-scale commercial development in downtown Pittsburgh (including Steelers Stadium, the football stadium slated to open this season, and PNC Park, the home of the Pittsburgh Pirates baseball team) has generated additional construction employment in the central city. A $328 million construction project for a new convention center also just commenced. By 2003, a modern convention center will be available with 1.2 million square feet of convention space. This new facility will allow for 900 more conventions per year.
As of June 2001, the unemployment rate in the Pittsburgh metropolitan
statistical area stood at
For the past 5 years, residential building permit activity averaged 6,300 units per year. More than 80 percent of permits were for single-family homes, with multifamily construction averaging 1,100 units annually. Residential construction has increased in Beaver, Butler, and Washington Counties. In the past 6 months, however, housing construction appears to have slowed compared with levels for the same period in 2000.
Demand for new homes in the metropolitan area remains relatively stable. Starter homes include both condominium and townhouse units, with a minimum sales price of $130,000. Carriage houses/ townhomes are popular with retirees who choose to downsize their housing. A typical townhouse unit is priced from $150,000 to $350,000 and ranges in size from 1,800 to 2,200 square feet. Luxury four-bedroom custom-built homes ranging in size from 2,200 to 3,000 square feet or more are priced between $250,000 and $550,000.
During the first 6 months of 2001, the rate of existing housing sales in the metropolitan area was essentially unchanged. Aggregate sales volume declined less than 1 percent from the 10,212 homes sold in the first half of 2000, to a total of 10,123 homes. Sales levels declined somewhat in all counties except Westmoreland, which experienced a 10-percent increase in housing sales activity. In the first 6 months of 2001, the average sales price of an existing housing unit increased by less than 1 percent from $122,275 to $123,207 in Allegheny County, which includes the city of Pittsburgh. During the same period, the average sales price increased by 6.5 percent in Butler County to $177,832, and by 3.8 percent in Washington County to $131,549.
The rental market in the Pittsburgh area is somewhat tight. Occupancy in newer rental properties in the metropolitan area increased to an estimated 97 percent during the latter part of 2000. Rent increases average 4 to 5 percent annually. However, it is expected that the market will become more balanced over the next year as the supply of available rental units increases.
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