During the 12 months ending August 2002, nonagricultural employment in the Mid-Atlantic region declined by 116,142 jobs, or 0.8 percent, to approximately 13.4 million. Virginia recorded the largest decrease, down slightly more than 1 percent, because of continued declines in the transportation and utilities, manufacturing, and construction sectors. Northern Virginia, which has led the region in employment growth for the past several years, experienced a 0.2-percent decline, or a loss of 2,500 jobs. These job losses are attributed primarily to significant layoffs in the high-technology industry and the loss of airline-related jobs in the transportation sector. Among the major metropolitan areas in the region, Norfolk reported employment growth with a small increase of 0.03 percent for the 12-month period. Gains in local education and the defense-related sectors offset losses in manufacturing, transportation, and construction. The Washington, D.C. metropolitan area continued to record job growth but the rate of growth continued to decrease. For the 12-month period ending August 2002, employment increased by less than 0.05 percent, or 1,450 jobs, compared with 2.7 percent for the 12-month period ending August 2001.

The unemployment rate for the Mid-Atlantic region was 4.7 percent for the 12-month period ending August 2002, up from 4.0 percent during the same period in 2001. Unemployment rates rose in all of the States in the region except for Delaware, where the rate remained stable. Virginia saw the largest increase during the period with the unemployment rate rising to 4.2 percent compared with 2.8 percent a year earlier. Unemployment rates increased in all of the major metropolitan areas in the Mid-Atlantic region.

The region’s relatively stable economy and continued low interest rates supported an increased demand for new single-family homes in the Mid-Atlantic region. The number of single-family units authorized by building permits in the first 9 months of 2002 totaled 89,070 units, an increase of 11 percent compared with the first 9 months of 2001. All States recorded increases in activity. In the first 9 months of 2002, single-family permits in Delaware increased 22 percent over the comparable period in 2001. According to local reports, Delaware is attracting developers because of its available supply of buildable land and the growing scarcity of sites in the Philadelphia suburbs of southeastern Pennsylvania. In the Dover metropolitan area single-family permits during the first 9 months of 2002 exceeded the comparable period in 2001 by 50 percent. The absolute number of units permitted in the first 9 months already has exceeded the annual total reported in each of the past 8 years.

Existing home sales in the Mid-Atlantic continued to show increases over sales numbers for 2001. Despite declining economic conditions throughout Virginia, strong demand and lower interest rates continued to boost the home sales market. The Virginia Association of REALTORS^® reported that existing sales in the first 9 months of 2002 totaled 83,956 homes, up 9 percent over the same period in 2001. The median sales price was $144,480. Nearly all areas in the State reported increases in sales activity. In Richmond sales totaled 10,373 homes, a 13-percent increase. The average sales price increased to $165,528. Sales rose 12 percent in Northern Virginia area to 32,838 homes. This level of sales activity was quite impressive given the large number of high-technology jobs lost in this area during the past 18 months.

The Maryland Association of REALTORS^® reported that sales through the first 9 months of 2002 increased 3 percent over the volume reported during the same period in 2001. The median price for units sold in Maryland was $169,700. The rate of home sales in the Baltimore metropolitan area, however, has slowed considerably. Year-to-date sales of existing homes increased 3 percent over the previous year, a significant decline from the 18-percent increase reported in the first 9 months of 2001. Although the sales volume has declined, prices continue to rise. The median price for all units sold through September 2002 was $145,700, or 10 percent higher than for the comparable period in 2001.

Sales of new homes in the Baltimore metropolitan area increased 14 percent in the first 9 months of 2002 compared with the first 9 months of 2001. Baltimore and Howard Counties had the most sales activity with Baltimore County closing 47 percent more sales and Howard’s closings up 19 percent. The average sales price of a new home was $310,550 with the highest prices in the Annapolis area ($471,400) and along the Interstate 70 corridor to Frederick ($548,800).

New home sales increased 21 percent in the Washington metropolitan area. The average sales price in the Maryland portion of the Washington metropolitan area was $340,300. In the Northern Virginia suburbs prices averaged $392,850.

During the first 6 months of 2002, sales of new single-family homes in the Philadelphia metropolitan area averaged 9 percent less than in the first 6 months of 2001. The price of a new home increased by approximately 9 percent to $266,500. According to local sources these trends continued into the third quarter.

Apartment construction in the Mid-Atlantic region, as measured by multifamily building permit activity, totaled 18,475 units during the first 9 months of 2002, down less than 1 percent below the first 9 months of 2001. Activity declined in all States in the region except Virginia due to increased activity in the Norfolk-Virginia Beach-Newport News area where multifamily permit activity increased by 34 percent.

The region’s largest metropolitan areas continue to report either balanced or tight rental market conditions. In the Philadelphia metropolitan area the apartment market has maintained high occupancy levels with vacancy rates in Class A garden apartments now estimated at a tight 1.9 percent. In Center City Philadelphia vacancies in Class A highrise properties are estimated to be 1.0 percent. The absorption rate for recently completed developments in Center City has risen slightly to 13 units per month but is still significantly less than the 18 units per month for projects completed in 2001. Approximately 1,450 units are in the Center City pipeline, with the majority being conversions of former industrial and commercial office buildings. In the Baltimore metropolitan area the vacancy rate is estimated at 1.8 percent. The apartment market in downtown Baltimore remains strong with a rental vacancy rate of 2 percent. However, the estimated 1,675 units in the submarket’s pipeline are expected to ease the current tight market conditions.

In Richmond the rental market is relatively balanced. Data from Carolinas Real Data indicate that between January 2002 and July 2002, approximately 774 units were completed in the market area and 688 of these units were absorbed. As a result the apartment vacancy rate remained at 6.5 percent. Currently, 1,434 units are under construction and 1,820 units are in the planning stages. Given the size of the current construction pipeline, the overall apartment vacancy rate is expected to rise above 8 percent during the next 12 months. The average rent for all units reached $676, an annual increase of nearly 5 percent. The average rent for a new unit was $845.