The recession and the consequences of the World Trade Center tragedy led to declines in employment in both New York State (1.1 percent) and New Jersey (0.4 percent) in the 12-month period ending December 2001. The rate of loss in New Jersey was not as high as it might have been because of the approximately 15,000 jobs that relocated to the State from New York City following September 11. In the 12-month period ending December 2001, employment in the finance, insurance, and real estate sector declined 4.5 percent in New York State while gaining 3.5 percent in New Jersey. Employment patterns in the other sectors of the economy were similar in both New York and New Jersey during the period, as manufacturing employment in the region declined approximately 5.5 percent. New York State's unemployment rate was 5.8 percent in December 2001, up from 5.2 percent in December 200l. New Jersey's unemployment rate stood at 4.9 percent in December 200l, up from 3.8 percent in December 2000.

In New York City, employment dropped 2.5 percent for the 12-month period ending in December 2001. The encouraging news was that job declines in December were approximately one-half those incurred during November. In 2001 almost 22,000 jobs were lost on Wall Street, and manufacturing was also hard hit with jobs down approximately 7 percent. New York City's unemployment rate in December 2001 was 7 percent compared with 5.2 percent a year earlier. The economy of upstate New York was also lackluster in 2001 as layoff announcements by manufacturers mounted.

Building permits for New York and New Jersey totaled 73,200 units in 2001, a 6-percent decline from the same period in 2000. Both single-family and multifamily activity recorded declines. In the New York City metropolitan area, multifamily permit activity increased 10 percent. The Newark area recorded a 35-percent increase in multifamily permit activity to more than 2,000 units.

Despite the economic slowdown, sales of existing single-family homes in New York State remained at a healthy pace into the fourth quarter of 2001. Existing home sales for the year were up 2.3 percent to 199,100 homes, according to the NAR. Sales prices also increased throughout the State. In the Nassau-Suffolk area, the median price increased 9 percent to $248,400. Sales in New Jersey were not far off the volume for 2000 based on NAR data, down less than 2 percent to 132,300 homes. As a result of the tight housing market and continued demand, median sales prices increased by 11 percent or more in all of the metropolitan areas in northern New Jersey. The highest median sales price, $288,800, was recorded for the Bergen-Passaic market.

Manhattan's cooperative and condominium market remains relatively strong. Sales for 2001 fell below the 2000 level, but activity increased in the last quarter of the year. Sales prices have declined about 5 percent in many Manhattan neighborhoods and as much as 10 percent in the Chelsea, SoHo, and Tribeca areas. Demand is strongest for one- and two-bedroom apartments, in large part because rentals are still expensive despite recent rent reductions. Price declines have been greatest in three-plus bedroom apartments, with many families putting off purchases. As a result, inventories of available apartments have increased 40 percent.

Manhattan's rental market softened in the last quarter of the year. According to the brokerage firm of Halstead/Feathered Nest, rents for prop-erties between Houston Street and East 96th Street declined significantly compared with a year ago. Rent reductions of up to 30 percent are being seen in developments in Battery Park City, close to the site of the World Trade Center disaster, and also in fringe neighborhoods such as Chelsea, the West Forties and Fifties, the East Fifties, and the far eastern portion of the Upper East Side. There are reports of landlords renegotiating leases with existing tenants in order to keep units occupied.

Manhattan's office market also eased during the fourth quarter despite the destruction of some 13.4 million square feet of space and the temporary loss of an additional 12.1 million square feet. According to Grubb and Ellis, 10.1 million square feet of office space came on the market after September 11 as companies put excess space on the market. Overall, asking rents for Class A office space in Manhattan have declined approximately 10 percent. An encouraging sign for the downtown office market has been Deutsche Bank's $610 million purchase of a 47-story office building.

Despite the relocation of more than 25 companies from Manhattan and the absorption of 3.6 million square feet of space, the office market in Northern New Jersey also softened. The office vacancy rate reached 18 percent at the end of 2001, up from 10 percent a year earlier, according to the brokerage firm of GVA Williams. Many of the vacancies have been in developments along the Hudson River waterfront.

In New York City a plan has been approved, and a developer selected, for a $350 million project to develop 100 acres of the 300-acre vacant beachfront property in the Arverne section of the Rockaways in Queens. The development will consist of 2,300 units in a mix of single-family homes, duplexes, and midrise apartments; 250,000 square feet of retail space; a daycare center and a community center; and an 800-student charter school.

A 500-unit luxury rental development known as Bank Street Commons is under construction in White Plains. The development will consist of two towers of 22 and 21 stories. Rents for one-bedroom apartments will start at $2,000 per month, and two-bedroom units are planned to start at $3,000. Camden, New Jersey's poorest city, recently signed off on a $40 million development plan aimed at preserving the historic Fairview neighborhood. The plan calls for new and renovated housing units, a 3,000-square-foot community center, and a recreation area. There will be 220 rental units to serve households earning between $25,000 and $35,000, and 100 renovated homes for sale at prices from $40,000 to $55,000.

Spotlight on Plattsburgh, New York

Plattsburgh is the commercial, manufacturing, and healthcare center of the northeastern "North Country" region of New York State. The Plattsburgh area is located on the western shore of Lake Champlain, 20 miles south of the U.S.-Canada border and 60 miles south of Montreal, Quebec, which is Canada's second largest metropolitan area and commercial center. Canadian visitors and related tourism and retail spending contributed more than $193 million to the local economy in 2000, according to the North Country Chamber of Commerce. The largest private-sector employer in the county is the CVPH Medical Center, which employs more than 1,400 persons. Plattsburgh also is home to the State University of New York (SUNY) College at Plattsburgh. The university is the area's fourth largest employer with an enrollment (as of fall 2001) of 6,200 students.

Total nonagricultural employment for the Plattsburgh area stood at 36,800 as of December 2001, a 1.4-percent increase over a year earlier. The unemployment rate as of December was 4.5 percent, unchanged from a year earlier.

As of the 2000 Census, Clinton County had a population of 79,894, representing a decline of 6,000 persons during the previous decade. A substantial portion of the decline resulted from the closure of Plattsburgh Air Force Base in September 1995.

The redevelopment of the former air base facility represents a major success story for the Plattsburgh area. The Plattsburgh Airbase Redevelopment Corporation (PARC), a nonprofit group, was formed to market the 5,000-acre former military installation. The redevelopment has been assisted by a variety of State and Federal programs. To date, PARC has attracted more than 60 new private-sector tenants to the facility, including Pratt & Whitney (aircraft engines), Bombardier (heavy rail passenger cars), and Westinghouse Air Brake (rail car components). The impact of the redevelopment can be seen in the area's nonagricultural employment statistics, particularly in the durable goods sector. Since 1995 employment in durable goods manufacturing has increased by 800 jobs.

The disposition of the base's military family housing has also been a success. In May 2001, PARC sold more than 100 single-family homes to Select Property Group, Inc., to rehabilitate and modernize. The homes, priced from $60,000 to $80,000, sold within 60 days. This represented Phase I of a multiyear housing development project called Lake Country Village. A total of 300 single-family homes will be placed on the market within the next few years. A congregate care senior housing community, Lake Forest Senior Retirement Community, was also recently completed at the former Air Force base. This community offers a social model for the active elderly in a congregate care setting. Current rents for one-bedroom units are approximately $925 a month, in addition to a refundable equity contribution of $75,000 or more. All 44 apartments and 12 duplex homes were occupied within 18 months; a majority of the residents originated from Clinton County.

The Plattsburgh rental market exhibits strong seasonal changes due to the estimated 35 percent of students at the university who live off campus. Rents in neighborhoods adjacent to the campus increased by as much as 10 percent during the 2000-01 school year, paralleling room and board cost increases implemented by the college for on-campus housing.

The sales market has been relatively active in 2001. Sales totaled 422 homes, a 9-percent in-crease over 2000. The average sales price for the year was $109,500, up 7 percent. Sales prices in the city are typically in the $75,000 to $125,000 range. Waterfront homes along the Lake Champlain shoreline sell for $200,000 to $350,000 or more.

Residential construction trends in the city remained stable during the years following the base closure. Despite a very limited number of residential lots, the local building department reports annual building permits in the range of 10 to 15 per year with average construction costs that exceed $150,000.

In order to increase tourism and highlight the important role that Plattsburgh played in the War of 1812 and the development of the Lake Champlain region, the city is redeveloping sections of the downtown area waterfront. Plattsburgh is creating an historical and pedestrian corridor along the Lake Champlain shoreline and will include marina investments combined with lighting and related street improvements.