Nonfarm employment in the Southeast increased by 2.4 percent to 23.5 million workers during the 12 months ending in November, which was about the same as the increase during the prior 12-month period. South Carolina led the way with a 4.7-percent increase. Companies invested $5.8 billion in capital last year in South Carolina, the highest level in State history. Employment gains in Florida and Georgia remained strong, but increases in Alabama and Mississippi were less than 1 percent. The unemployment rate for the region declined from 4.3 to 4.1 percent during the 12 months.
The number of single-family building permits for the region in 1998 was up almost 11 percent from 1997, to 323,827 homes. Activity increased in all States, with Georgia recording the biggest percentage increase (16 percent). In the Atlanta metropolitan area, single-family permit activity in 1998 totaled 45,835 homes, 19 percent above 1997, for the third consecutive year of record-breaking production and the largest volume of any metropolitan area in the Nation. In North Carolina, the Charlotte-Gastonia and Raleigh-Durham areas recorded significant increases in single-family permits of 21 and 16 percent, respectively, for the highest annual volumes of the decade.
Existing home sales in the Southeast region in 1998 were reported to be up in every State. Excluding Georgia, for which data were not available, the NATIONAL ASSOCIATION OF REALTORS® reported that the annual rate of sales increased by 14 percent in 1998 to 1,032,700. South Carolina recorded the biggest percentage increase in sales volume, 18 percent, followed by North Carolina with 17 percent. The median sales price of an existing home increased by 6 percent in the Atlanta area to $115,400 and by 8 percent in the hot Charlotte-Gastonia area to $134,000.
The Puerto Rican government is expected to play a major role in post-hurricane recovery efforts, as it plans to build 50,000 low-cost housing units over the next 5 years. According to preliminary estimates, the hurricane destroyed 27,954 housing units and damaged another 62,000. A shortage of skilled labor is expected because of the pressing demand for construction skills.
Six States in the Southeast saw increases in multifamily building permits for 1998. Activity in North Carolina was down less than 3 percent from 1997, which was the strongest year of the 1990s. Multifamily activity was down dramatically in the Charlotte-Gastonia area, by 25 percent. The decline comes after two very active years in 1996 and 1997, when multifamily permits averaged more than 5,500 units annually. Carolinas Real Data expects apartment vacancy rates in the Charlotte-Gastonia, Raleigh-Durham, and Greensboro areas to increase from the current levels of 4-5 percent to 7-8 percent during the coming year. Multifamily activity for 1998 in Tennessee was 15 percent below the 1997 volume. The drop reflects the 40-percent declines in the Knoxville and Memphis markets in response to the large development pipeline after 3 high-volume years.
Atlanta metropolitan-area rental housing occupancy has increased in most submarkets, but the high rate of construction has meant competitive market conditions. Approximately 11,000 to 12,000 apartment units came on the market during 1998. This is the highest volume of completions since 1995, when the rental market softened significantly. Newly completed developments in parts of Cobb, Fulton, and Gwinnett Counties have offered substantial concessions in order to achieve rent-up. With building permits issued for 11,646 units in 1998, the high volume of new rentals entering the market and competitive market conditions are expected to continue into 1999.
Fort Lauderdale area multifamily building permit activity declined sharply in 1998 after steady increases from 1992 through 1997. In 1998, 3,687 units were authorized, compared with 5,549 in 1997. The decline in production is a response to concerns that the high volume of activity in 1997 may have exceeded the rental market's capacity.
Spotlight on Biloxi-Gulfport-Pascagoula, Mississippi
The Biloxi-Gulfport-Pascagoula metropolitan area, consisting of the coastal counties of Hancock, Harrison, and Jackson, had a population of 343,000 as of July 1997, an increase of more than 31,000 since the 1990 census.
The area, known as the Gulf Coast, has undergone a significant economic transformation since the first gaming facility opened in Biloxi in August 1992. For the 12-month period ending November 1998, total employment was 157,200, up 5,000 or 3.3 percent, from the preceding 12-month period. The unemployment rate for the 12 months averaged 3.8 percent. Eleven casinos employing 13,500 persons are now in operation as the area continues to evolve into a resort destination. The larger gambling and lodging companies have been building upscale casinos/hotel developments that, in turn, have expanded the length of stay of customers. The Gulf Coast Hotel-Motel Association expects that there will be more than 16,000 hotel rooms available by the end of 1999, compared with 6,500 rooms in 1993. A significant test of the area's tourism and gaming industry will occur when the $650 million Beau Rivage Casino opens in March 1999. The Beau Rivage will have 1,780 rooms and expects to employ 4,500 persons.
The 1,843 single-family building permits issued in the Gulf Coast area in 1998 reflect a 15-percent increase in activity over the previous year. It has been reported that the shortage of skilled workers is having an effect on completions. The Mississippi Association of REALTORS® reports 2,750 existing homes were sold in the Gulf Coast area during the first 10 months.
Strong employment growth, as well as damage to the housing stock by Hurricane Georges, has tightened the rental housing market in the Gulf Coast. The most recent survey of the apartment market by the University of New Orleans Real Estate Market Data Center revealed an overall occupancy of nearly 97 percent in July 1998.
Apartment managers report that the ready acceptance of new units is prompting increased construction. A total of 1,446 multifamily units were authorized by building permits in 1998, almost equal to all production for the previous 3 years combined. Plans for future development were recently announced for a 280-unit first phase of a planned 500-unit apartment community in D'Iberville, a 168-unit development in Gautier, and a 304-unit community in Ocean Springs.
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