Economic expansion in the New York and New Jersey region appears to be leveling off. In the 12 months ending June 2001, employment in New York State increased by 92,400 jobs (1 percent). New York City gained 44,400 jobs during the period. However, both New York State and New York City recorded job losses in May and June. New York States unemployment rate was 5.3 percent in June 2001, down three-tenths of a percentage point from June 2000. New York Citys unemployment rate was 5.3 percent in June 2001, down from 5.6 percent in June 2000. New Jersey gained 24,100 jobs in the 12-month period ending in June 2001 (0.6 percent); however, the unemployment rate in New Jersey was 4.5 percent in June 2001, up from 3.7 percent in June 2000.
Building permits in New York and New Jersey totaled 34,600 units in
the first 6 months of 2001, an 8-percent decline from the same period
in 2000. Both single-family and multifamily activity recorded declines.
Multifamily housing permits in New York State increased just 3 percent
compared with the same period in 2000. In the New York City metropolitan
area, multifamily activity increased 8 percent. The Newark area recorded
an increase of more than 18 percent in multifamily building permit activity.
Single-family housing permit activity increased 36
Even with the slowdown in the economy, the market for existing sales housing remained robust throughout New York State and New Jersey into the second quarter of 2001.
Sales of single-family homes in New York State in the first quarter of 2001 surpassed the first quarter of 2000 by 6 percent according to the New York State Association of REALTORS® . This was the second strongest first-quarter start recorded by the association in the past decade. The average sales price in the first quarter of 2001 was $130,589, 5 percent greater than the first quarter of 2000. In New Jersey, single-family home sales in the first quarter of 2001 dropped 1 percent from the volume of the first quarter of 2000, according to the New Jersey Association of REALTORS® . The median sales price of $196,500 in the first quarter of 2001 was 11 percent higher than in the first quarter of 2000.
Manhattans cooperative and condominium market remains strong but cooler than in the past. According to the Real Estate Board of New York, the median sales price in the second quarter of 2001 was $475,000, compared with a median sales price of $530,000 in the third quarter of 2000. Sales during the second quarter of 2001 declined 19 percent; there has been a reduction in inventory as well.
Sales price increases in the double digits continue to be reported in Long Island and Westchester County. In Westchester County the median sales price of a single-family home in the first quarter of 2001 stood at $412,500, up 10 percent from a year earlier. Demand has been particularly strong for homes in the $820,000 to $1 million price range.
In Upstate New York, prices in Buffalo and Rochester are 6 percent above a year ago. The average price of a single-family home in the Buffalo-Niagara Falls region hit a 7-year high of $104,000 in May 2001. Demand is heaviest for homes priced in the $80,000 to $120,000 range.
The Manhattan office market remains strong in the second quarter of 2001, although there has been a slight increase in the vacancy rate. There has, however, been a substantial increase in subleasing as dot-com and telecommunications companies have either gone out of business or substantially reduced operations. According to the brokerage firm of Julian J. Studley, Inc., there are currently 10 million square feet of sublease space on the market, compared with slightly less than 2 million square feet at this point in 2000. Office vacancy rates are on the rise in Northern New Jersey, and rents have leveled off. Occupancy rates have fallen considerably at Manhattan hotels because of the national economic slowdown and record construction of 3,500 additional hotel rooms in 2000. The occupancy rate in the first quarter of 2001 stood at 72.3 percent, down from 78.2 percent in the same period in 2000.
Jersey City continues to experience significant rental housing development along the Hudson River waterfront, where construction of 2,000 apartments in four developments is under way. Three of the developments are located near the Harborside Financial Center. The largest, Harbor Spire, will be near the PATH Station at Exchange Place across from the center. The development consists of two highrise buildings with a total of more than 860 apartments. Units range from studios renting for $1,600 to $1,650 to three-bedroom apartments renting for $3,800. Rents in Manhattan have declined slightly, but there have been significant rent increases in parts of Brooklyn and Queens. In parts of Queens studios are available for between $900 and $1,000, one-bedroom apartments for between $1,000 and $1,200, and two-bedroom apartments for between $1,300 and $1,500. In Westchester County there has been increasing development of high-end rentals.
Spotlight on Jamestown, New York
The Jamestown metropolitan area includes all of Chautauqua County and is situated along the eastern shoreline of Lake Erie. The metropolitan area had a population of 140,000 persons as of the 2000 census, with almost one-quarter living in the city of Jamestown.
In June 2001, nonagricultural employment in the Jamestown metropolitan area totaled 59,700 jobs, a 1.5-percent decline (900 jobs) compared with a year earlier. The majority of the recent job losses in the metropolitan area occurred in the manufacturing sector. Despite weakness in the manufacturing sector, the local economy, which is increasingly dominated by service and trade jobs, has remained relatively stable.
As of June 2001, the unemployment rate stood at 4.7 percent, up from 4.2 percent a year earlier. The near-term outlook for employment growth is clouded by the recently announced closure of Empire Steel Corporation, located in Dunkirk, New York, which put 280 people out of work.
One of the more positive aspects of the local economy is the economic stimulus generated by the State University of New York (SUNY) College at Fredonia, located in the village of Fredonia. The college is Chautauqua Countys sixth largest employer. With a projected fall 2001 enrollment of almost 5,000 students, SUNYFredonia is both an important educational institution as well as a major contributor to the economy. Students spend almost $20 million annually in the county. Total staffing at the college increased slightly in recent years with more than 700 employees and an operating budget of more than $50 million.
More than one-half of the student population, or 2,600 students, lives off campus. Students demand for housing has historically put pressure on rents for apartments located close to the college. This has contributed to tight rental housing market conditions in Fredonia as well as in portions of nearby Pomfret.
Over the past 5 years, residential building activity in the Jamestown area has averaged 220 units per year. Single-family homes account for 87 percent of all residential construction. Housing construction ranges from small prefabricated starter homes priced in the $70,000 to $80,000 range to upscale homes priced between $250,000 and $400,000. Much of the demand for new homes is from buyers from outside the area, particularly for the second home/recreation market. For example, duplex units currently under construction in the French Creek/Clymer area are selling for $250,000 or more.
According to New York State Association of REALTORS® statistics, in the 12 months ending in May 2001 the average sales price of an existing home in Chautauqua County declined 6 percent from $93,804 to $88,209. Sales of seasonal/recreation properties continued to be strong, however, particularly for waterfront locations on Chautauqua Lake and Lake Erie. Prices for recreational properties have increased 5 to 10 percent in recent years, according to data from the Chautauqua County Board of REALTORS® .
The Chautauqua Institution, a 750-acre educational center and home for the arts, is located in the town of Chautauqua adjacent to Chautauqua Lake. The institution, founded in 1874, provides an educational setting for art, music, dance, and theater. Recently announced plans call for a $3.7-million investment in developing condominium housing at Chautauqua Institute. The locations unique history and setting make it one of the premier development sites in the county.
Multifamily housing construction averages less than 30 units per year. A substantial portion of multifamily production has fallen under the U.S. Department of Agricultures Rural Housing Service Section 515 program, although some small market-rate developments have been recently completed in the city of Jamestown and the townships of Ripley and Pomfret.
The Jamestown rental market is currently soft, with an overall rental vacancy rate estimated at 10 percent. Local real estate sources indicate that apartment vacancy rates range from 5 to 10 percent. The rental vacancy rate in the city of Dunkirk is approximately 7 percent and 10 percent in Jamestown.
Assisted living for seniors is relatively new to the Jamestown metropolitan area. An independent/ assisted living facility for 81 seniors, Loyalton at Lakewood, was constructed in the town of Lakewood on the west side of Jamestown in 1999. Monthly rents range from $1,400 for a small studio unit to $2,300 for a two-bedroom unit. In addition, assisted living is available at prices ranging from $1,900 to $2,800.
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