Modest employment gains were recorded for most of the Mid-Atlantic region during 2000. Nonagricultural employment in this region rose by 154,100 jobs, or 1 percent, during the 12-month period ending November 2000. Maryland led the region with a 2.3-percent gain, followed by Virginia with a 2-percent increase. Labor markets remained tight throughout the Mid-Atlantic. The region’s unemployment rate in November 2000 was 3.5 percent, essentially unchanged from a year earlier. Virginia experienced the greatest decline in unemployment rate during the 12-month period, from 2.6 percent to 2 percent. The lowest unemployment rate in the State was recorded in the Northern Virginia area at 1.1 percent. The Washington metropolitan area posted a 2.2-percent unemployment rate.

The high-technology and telecommunications sectors continue to be the major force in Virginia’s economic expansion. According to a report by Standard & Poor’s, the State is expected to have the second highest concentration of technology workers in the Nation by 2001. Despite critical labor shortages in Northern Virginia, employment continues to grow. U.S. Data Port recently announced plans to construct an $800 million campus in Prince William County that will house up to 20 new data centers. Phased over 5 years, the project would create up to 2,200 jobs. Capital One, the largest private employer in Richmond, announced plans for a $700 million expansion of its operations in Goochland, Chester-field, and Fairfax Counties. The project could generate as many as 8,000 new jobs.

Homebuilding in the Mid-Atlantic region in 2000 declined slightly compared with 1999. Single-family building permit activity in the region for the year totaled 105,170 homes, down 4 percent compared with the same period a year ago. Activity was down in every State except Maryland, which recorded a 4-percent increase. Based on data from the Virginia Association of REALTORS^® , approximately 96,500 existing homes were sold in the State in 2000, up almost 2 percent compared with 1999. Sales volume was up significantly in the Northern Virginia and Richmond areas, 6 and 7 percent, respectively.

Sales in the Washington metropolitan area remained robust. Existing sales through November totaled 88,221, 11 percent above the same period in 1999. The Meyers Group reported that new sales in the Washington metropolitan area during the period totaled 25,330 homes. The average price of a new home in the area during the first 11 months of 2000 was $247,521.

NAR reported that existing sales in Maryland totaled approximately 104,900 in 2000, 2 percent above 1999. The Baltimore metropolitan area continued to record the highest sales volume of the past 10 years. According to the Metropolitan Regional Information System, sales in the metropolitan area were up 2 percent over 1999, with a total of 31,344 homes sold.

Multifamily building permit activity for 2000 was down throughout much of the Mid-Atlantic region in response to the large volume of units that has entered the market in recent years and the substantial volume of units still in the construction pipeline. The rental housing market continued to be balanced to tight in the Mid-Atlantic region’s major markets. The rental market in Northern Virginia remains the strongest in the region. Vacancy rates of 1 percent or less are typical in Class A apartment complexes. According to Delta Associates, more than 5,900 new apartment units were rented in 2000, the highest level in the past 10 years. The Bethesda and Washington markets in suburban Maryland are also experiencing extremely tight conditions with vacancy rates of less than 2 percent.

Spotlight on Philadelphia, Pennsylvania-New Jersey

Employment in the Philadelphia metropolitan area continues to grow at a moderate pace. Wage and salary employment during the 12-month period ending November 2000 increased 1.7 percent, or 39,800 jobs. Approximately 90 percent of the new jobs were located outside the city of Philadelphia. Employment growth has slowed in the city during the past 12 months. After average annual increases of 1.3 percent during each of the past 2 years, employment in the 12 months ending November 2000 was up 0.5 percent. The unemployment rate in the metropolitan area as of November was 3.8 percent, down slightly from November 1999.

The Republican National Convention boosted economic activity in the Philadelphia area this summer, bringing nearly $345 million in commercial sales. The Pennsylvania Convention Center Authority recently announced plans to expand the convention center by 1 million square feet. Since 1998, more than 8,000 hotel rooms have been added to the metropolitan area, representing a 25-percent increase.

The Philadelphia metropolitan area experienced a negligible increase in population over the past decade. Between 1990 and 1999, the population of the metropolitan area increased by 27,610 people. During this period, the population in the city of Philadelphia declined by 167,976, or approximately 11 percent, to slightly more than 1.4 million persons. In suburbs, the population in Bucks, Chester, and Montgomery Counties increased by 152,379 persons.

The sales market for existing homes in the Philadelphia suburbs and City Center was strong in 2000. Although the demand for new housing in the Philadelphia area remains strong, new home sales for 2000 dropped 21 percent, compared with 1999 volume. New home sales are constrained by a shortage of buildable lots and lengthy zoning and approval processes. Single-family permit activity during 2000 totaled 13,294 homes, down 7 percent compared with the same period a year ago.

Demand for housing in Center City continues to grow. The apartment market currently is very tight. Class A highrise apartments in Center City routinely report vacancy rates below 1 percent, down from almost 3 percent last year. As a result of the tight market, there has been a boom in conversions of low- and midrise office buildings to both condominiums and rental units. The nearby South Broad Street and Bella Vista areas in South Philadelphia have also become desirable areas for small-scale conversions. Demand for condominium units has been so strong that most units are sold prior to completion. The market for existing condominiums is also experiencing a renaissance in Center City. Units that might have sold for less than $35,000 throughout most of the 1990s (when foreclosures were commonplace) are now selling for $125,000 or more. Penthouse units priced in the low $100,000s a decade ago now command prices of up to $500,000.

Multifamily housing permit activity in the Philadelphia metropolitan area through December totaled 2,946 units, a 16-percent increase from 1999. According to Delta Associates there are currently 4,436 units in planning or under construction in the metropolitan area. Of this total, approximately 2,274 units are in several large projects to be developed in the Center City area.