Nonagricultural employment in the Mid-Atlantic increased by 182,000 jobs (1.4 percent) from February 1999 to February 2000. Delaware, Maryland, and Virginia led the increase, with growth of 2.8, 2.1, and 2.1 percent, respectively. West Virginia and Pennsylvania recorded much smaller gains of 0.7 percent each. Employment in Northern Virginia rose by 4.8 percent during the period and accounted for nearly 60 percent of the State's job increase. Tight labor market conditions continue to prevail in Virginia. Among Virginia's metropolitan areas, the lowest unemployment rates were reported in Charlottesville (1.4 percent) and Northern Virginia (1.8 percent). The Washington, D.C. metropolitan area posted a 2.4-percent unemployment rate. The outlook for job growth in Maryland is favorable despite an ongoing labor shortage. Employment is expected to increase by 2 percent in 2000. During the 12-month period ending February 2000, employment in services accounted for more than 60 percent of the total employment gain in Maryland. Much of the growth is in the high-technology services sector (telecommunications, computers, and biotechnology).

Commercial building activity is booming in most of the Mid-Atlantic major markets. The migration of high-technology firms to the region is spurring demand for new office buildings and renovations. The Washington, D.C. area's net absorption and construction of new office space reached record highs in 1999. In downtown Wilmington, Delaware, office vacancy rates are extremely low, and large blocks of space are in short supply. Demand for office space is also on the upswing in the Baltimore area, especially along the Baltimore-Washington corridor. According to the consulting firm of Colliers Pinkard, there are approximately 2.3 million square feet of office space under construction in the Baltimore metropolitan area, with nearly 70 percent of the activity in Howard and Anne Arundel Counties. Most of the new space in Howard County is preleased by two high-technology companies, Micros and Bell Atlantic Mobile.

Commercial and office space are becoming increasingly difficult to find in downtown Philadelphia. The office occupancy rate was up to 92 percent in 1999. Part of the increase is due to the conversion of commercial properties in the Center City to apartments and condominiums. One building, built in 1929, is being converted into 193 luxury apartments with monthly rents from $1,100 for a studio to $5,000 for a penthouse unit. There are approximately 2,000 residential units under construction or in planning in the downtown area that are expected to come on the market during the next 2 years.

Single-family building activity in the Mid-Atlantic region during the first quarter remained virtually unchanged from the same period a year ago. Despite rising interest rates, existing home sales continued to do very well throughout much of the region during the first quarter. According to the Virginia Association of REALTORS^®, existing home sales were up nearly 6 percent compared with the same period in 1999, and the market appeared to gain even more momentum in March before the busy Spring season. Homebuilders in West Virginia reported stable to slightly slower demand, with some softening in prices.

Baltimore-area existing home sales in 1999 reached their highest levels in more than a decade. According to the Metropolitan Regional Information System, sales in the metropolitan area were up 7 percent over 1998, with a total of 30,856 homes sold. The brisk pace, however, slowed in the first quarter of 2000, down 3 percent from the first quarter of 1999. According to the Meyers Group, a real-estate research and consulting firm, declining inventories caused new home sales to decline during 1999 (10 percent less than 1998). The average price of a new home rose 6.5 percent to $189,063.

Mid-Atlantic rental housing markets remained balanced to tight. In the Pittsburgh area, several large upscale apartment complexes have come on the market recently and are being absorbed on schedule. In Richmond, nearly 1,600 new apartments will enter the market this year; the hottest submarket is near downtown. The rental market continues to be very tight in Northern Virginia.

Housing Enterprise for the Less Privileged (HELP USA), a New York-based organization, is building 40 low-income townhouses and 50 units of transitional housing in the Milcreek section of West Philadelphia. Genesis Square Townhouses will consist of three-bedroom units renting for $471 per month plus utilities. The 50 transitional units offer homeless families up to 18 months of affordable housing and an intensive training program.

Spotlight on Washington, D.C.-Maryland-Virginia-West Virginia

The Washington metropolitan area's economy has been recognized as the world's largest and fastest growing technology hub. According to the Greater Washington Initiative, there are more than 12,000 technology companies in the metropolitan area, many located in the Northern Virginia suburbs, with an aggregate employment base of 230,660 workers. This represents a more than fivefold increase since 1995. Wage and salary employment in the metropolitan area rose 3.2 percent to 2,648,300 in the 12-month period ending February 2000. Employment in Northern Virginia increased by 4.4 percent during the same period. The unemployment rate in the metropolitan area as of February was 2.4 percent and in Northern Virginia, 1.8 percent. The unemployment rate in the District of Columbia dropped more than a full percentage point in the past year to 5.5 percent.

The population of the Washington metropolitan area was an estimated 4.62 million as of July 1999, an increase of 10.7 percent since 1990. Loudoun County, the third-fastest growing county in the Nation, and Prince William County, both in Northern Virginia, led the growth in the region, with increases since the 1990 Census of 81 and 26 percent, respectively. In Maryland, population increased 12 percent in Montgomery County and 8 percent in Prince George's County. The population of the District of Columbia has declined 16 percent since 1990.

Technology is expected to continue to fuel population and economic growth in the metropolitan area beyond 2000. This expansion, however, could be hampered by a labor shortage, the limited availability of affordable housing, and traffic congestion. To recruit and retain skilled employees, companies typically are offering daycare, restaurants, exercise facilities, and concierge services, and many companies are allowing more flexible work schedules to address the traffic congestion issue. Slow growth demands commonly heard in the outer suburbs of Northern Virginia now resonate throughout the metropolitan area. In Southern Maryland, Prince George's and Charles Counties now restrict development by a formula based on the capacity of nearby schools.

The Washington metropolitan commercial market remains one of the strongest in the Nation. According to Delta Associates, nearly 20.6 million square feet of new office space were added in 1999. The market for retail space is equally strong. In 1999, the Dulles Town Center opened in Loudoun County, the first major mall to open in the region in years.

With many buyers chasing limited inventory, last year's strong sellers' market boosted prices of new and existing homes. Local REALTORS^® report sale price increases of 5 to 8 percent. Overall average sale prices rose 6.6 percent in Montgomery County and 3 percent in Prince George's County. Data from the Meyers Group reported that the average price of a new home sold during the first quarter of 2000 in the Washington metropolitan area was $249,000, a 10-percent increase over first quarter of 1999. Local sources anticipate both a slight decline in sales volume for new homes in 2000 compared with last year and upward pressure on prices due to inventory constraints and escalating material and labor costs.

The number of single-family building permits issued in the Washington metropolitan area totaled 7,296 in the first quarter of 2000, a 9.9-percent increase over the comparable period in 1999. The area continues to rank in the top 10 nationally in single-family construction. The submarkets with the most intense activity include western Fairfax County, Loudoun County, and Prince William County in Northern Virginia. The Maryland suburban counties of Montgomery and Frederick are also very active.

The rental housing market in the Washington metropolitan area continues to show strong demand. Tight market conditions are evident in a number of suburban submarkets. Vacancy rates of 1 percent or less are typical in Class A properties, and new units at all rent ranges are being absorbed rapidly. Local analysts predict some easing of the tight market conditions, as more than 8,600 new units are expected to enter the market over the next 12 months, with Virginia properties accounting for approximately 60 percent of the activity.