Regional Activity

The following summaries of housing market conditions and activities have been prepared by economists in the U.S. Department of Housing and Urban Development's (HUD's) field offices. The reports provide overviews of economic and housing market trends. Each regional report also includes a profile of a selected housing market that provides a perspective of current economic conditions and their impact on the local housing market. The reports are based on information obtained by HUD economists from State and local governments, from housing industry sources, and from their ongoing investigations of housing market conditions carried out in connection with the review of HUD program applications.

New England / New York/New Jersey / Mid-Atlantic / Southeast/Caribbean
Midwest / Southwest / Great Plains / Rocky Mountain / Pacific / Northwest

Table: Units Authorized by Building Permits, Year to Date: HUD Regions and States
Table: Units Authorized by Building Permits, Year to Date: 50 Most Active Metropolitan Statistical Areas

New England

Employment in New England increased by an estimated 95,300 jobs, or 1.4 percent, to 6,898,000 in the 12 months ending in June 1999. As expected, most of the new jobs were in Massachusetts and Connecticut. However, Maine had the highest percentage increase at 2.4 percent. There is a continuing trend of job losses in goods-producing industries. Of the 9,500 goods-producing jobs lost during the 12-month period, more than 85 percent were in Massachusetts. Connecticut and Vermont bucked the trend, recording small increases. However, Massachusetts more than offset the losses with an increase of 56,000 service industry jobs, almost 50 percent of the regional gain. The unemployment rate in New England was 3.3 percent in June 1999, down from 3.5 percent in June last year and still on a downward trend. New Hampshire and Vermont both reported unemployment rates of 2.6 percent.

Residential activity during the first 6 months of 1999, as measured by building permits, is up 3 percent from the same period in 1998. Single-family permits are up 5 percent. Multifamily units are down in most States, except Maine and Massachusetts, where there were modest gains. The relative lack of available land, high construction costs, and governmental controls on development have kept additions to the housing inventory in moderate ranges, even in the best of economic times. Multifamily development is showing strength in the Boston, Hartford, New Haven, and Stamford-Norwalk metropolitan areas.

The New England sales housing market in 1999 has been even stronger than last year. The annual rate of existing home sales, as of the second quarter of 1999, reached 259,000, a 1.4-percent increase over the second quarter of 1998. Rhode Island had a 23-percent increase in sales. Vermont recorded a decrease of 14 percent during the same period. Home sales prices in New England are still on the rise. The median sales price as of the second quarter of 1999 was $235,400 in the Boston area, $150,700 in Hartford, and $128,600 in Providence.

Rental housing markets throughout New England continue to be tight, as the modest levels of construction of new units remain well below the growth in demand from increased employment. Vacancy rates in the low single digits are causing concern in the region's most dynamic markets, such as Boston, Portsmouth, Portland, Cape Cod, and lower Fairfield County, Connecticut. Officials are very concerned about affordability and homelessness as the competition intensifies for limited rental housing resources.

In some of Boston's stylish downtown neighborhoods, like Beacon Hill and Back Bay, a number of historic properties are being converted to condominiums, with some units selling for several million dollars. This conversion activity is being fueled by a strong economy and wealthy buyers coming back to the city.

Spotlight on Portland, Maine

The Portland, Maine economy continues to expand after recovering from the early 1990s recession. After a few years of little or no growth, nonagricultural wage and salary employment increased an average of 3,750 jobs annually from 1993 through 1998, or about 2 percent annually. Manufacturing employment remained stable during the period, with 90 percent of the job gains coming in services. As of June 1999, nonagricultural wage and salary employment was 152,100, an increase of 4,800, or 3.3 percent, over June 1998. Increases were reported in manufacturing, construction, and all service industries. Tourism, medical services, insurance, and telemarketing are supporting service industry employment.

Residential building permits increased significantly in 1998 to 1,622 units, compared with an annual average of 1,075 units from 1994 through 1997. This represents a 33-percent increase in single-family activity and a tripling of multifamily activity, the best year for new residential building activity since the late 1980s. In the first 6 months of 1999, single-family activity was off less than 1 percent from 1998 volume for the same period. Current levels of multifamily housing activity remain well below the levels of the 1970s and 1980s, and there is a growing shortage of affordable rental housing.

Home sales in the Portland metropolitan area have paralleled the area's economic recovery. Sales volume increased dramatically in 1998, with a gain of 29 percent over the previous year. Resales in 1998 totaled 2,747 homes. After several years of flat or declining prices, sales prices have also increased substantially, rising by 9 percent during the past 2 years, according to the Maine State Housing Authority. The NATIONAL ASSOCIATION OF REALTORS® reported a median sale price of $104,700 for the second quarter of 1999, up 4.7 percent from the second quarter of 1998.

The rental housing market in the Portland area has tightened significantly during the past 2 years, leading to rental vacancy rates in the low single digits. This has resulted in a pattern of rent increases that has brought public attention to the housing market. Affordability and homelessness issues have risen to a prominent position in the local 1 agenda. The city of Portland has set aside $600,000 and is moving ahead with two requests for proposals totaling 120 units for the construction of affordable housing.

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