Job growth in the Southeast continued at a moderately strong pace through the 12 months ending in February 2000. Nonagricultural wage and salary employment increased by 2.7 percent between February 1999 and February 2000. Florida experienced the biggest statewide increase, 4.1 percent, with approximately 280,000 jobs added over the year. Georgia's increase was 3.7 percent, accounting for more than 140,000 added jobs. The Atlanta metropolitan area had a net increase in employment of 106,300 jobs in 1999 (5.2 percent) according to the Georgia Department of Labor.

Service employment for the 8 States increased by about 5 percent, with more than 430,000 jobs added between February 1999 and February 2000. Increases in construction employment in the region were also significant, at 3.2 percent. Manufacturing employment, which has shown declines in most of the Southeast States for a number of years, increased by more than 1 percent in Georgia, with the manufacture of carpets and rugs adding almost 4,000 jobs.

Important recruiting efforts continue throughout the region. Hiring is just beginning for the 3,500 new jobs available at Opry Mills, a huge discount shopping mall in the Nashville area. In Louisville, UPS has begun recruiting workers from eastern Kentucky to help fill 1,500 jobs by October. North Carolina State officials announced the development of 3 ethanol production facilities in the eastern part of the State; this will mean an expected investment of $1.4 billion and the creation of 1,200 new jobs. Corning Incorporated will expand 2 of its optical fiber manufacturing facilities in the State, bringing $550 million in investment capital and 500 jobs to Cabarrus County and $100 million in investment capital to New Hanover County.

Overall, residential construction was down for the 8 States in the first 3 months of 2000 compared with the same time period in 1999. Single-family building permits were off by 2 percent and multifamily permits by 14 percent. Florida multifamily building permit activity in the first quarter was down 40 percent. In Orlando, multifamily building permit activity was down by 66 percent from the same period one year earlier. Apartment occupancy rates in the Orlando area have been declining since early 1998, as completions have increased significantly. Labor shortages and other bottlenecks have slowed the rate of completions and helped mitigate the effects of the large increase in supply. Charles Wayne Consulting, Inc., surveyed a total of 118,869 apartments and reported an overall occupancy 93 percent, compared with 94 percent in March 1999 and 95 percent for the same period in 1998. Overall occupancy is expected to continue to decline in the short term, even if new units are absorbed at current rates.

Significant increases in vacancy rates are anticipated in the Raleigh-Durham-Chapel Hill and the Charlotte-Gastonia-Rock Hill areas. According to the latest Apartment Market Reports from Carolinas Real Data, the apartment vacancy rate in the Raleigh-Durham-Chapel Hill area was 7.2 percent in January. However, with the relatively large number of units both under construction and planned for the area, analysts at Carolinas Real Data predict the vacancy rate could climb to more than 13 percent by January 2001 before it drops to 10 percent by the middle of next year. In Charlotte the apartment vacancy rate increased to 8 percent as of February and is expected to reach approximately 12 percent one year from now before easing back down to more acceptable levels by the end of 2001.

Multifamily development in the larger urban markets of South Carolina has declined somewhat as the pipeline has cleared. Secondary markets such as Aiken, Florence, Rock Hill, and Sumter are now targets for development, with each having a number of apartment projects under development.

NATIONAL ASSOCIATION OF REALTORS^® data indicate that 1999 was a good year for the sale of existing housing in Mississippi. For the year, 51,100 homes were sold, 6 percent more than in 1998. The median sale price increased from $86,000 in 1998 to $89,000 in 1999 for Gulf Coast properties, while the median for Jackson-area properties increased from $93,200 to $95,100. The Biloxi area is seeing a renewed interest in condominiums as a result of the growing gaming and tourism industries; at least 5 projects containing more than 1,300 units are in development there. Most of the developments are targeting the higher priced ($300,000 or more) market.

In the Atlanta area, two suburban counties are considering impact fees for development of new homes. Moratoria and rapidly increasing land costs have continued to push suburban development further out despite the region's continuing traffic problems. A back-to-the-city movement has sharply escalated prices for the limited supply of intown single-family housing and helped fuel support for a surging market in condominiums. The supply of both new condominiums and conversions is increasing rapidly to meet demand.

Spotlight on Ponce, Puerto Rico

The Ponce metropolitan area, about 70 miles southwest of San Juan, includes the 6 municipalities of Guayanilla, Juana Diaz, Peñuelas, Ponce, Villalba, and Yauco. In 1998 the area had a population of 366,273, a 1-percent annual rate of growth since 1990. Ponce, with the largest population, serves as the area's principal urban center. Using a combination of HUD and local funds, Ponce expanded and improved the Port of Ponce, which is owned and operated by the city. The Port is the largest commercial port in southern Puerto Rico. The new facilities created 50 jobs and stimulated the local economy by attracting European cruises and generating additional municipal revenues. Future plans include building a convention center, constructing a boardwalk, and developing a free-trade zone.

Favorable conditions for the area's housing industry are predicted despite modest interest rate increases. Residential building activity in the Ponce area totaled 9,429 units from 1990 through 1999. Single-family homes accounted for approximately 7,900 units of this total, and multifamily condominium units for most of the remainder. Half of all construction activity was in Ponce.

New home sales have been strong, with single-family detached homes accounting for 92 percent of all sales. More than 60 percent of market demand is for houses priced between $58,000 and $90,000. Subsidized units built under Puerto Rico's New Housing Program sell in the $55,000 to $70,000 range and account for 42 percent of local market sales. The program offers tax exemptions to affordable housing developers and provides downpayment and mortgage interest subsidies to moderate-income families.

The demand for rental housing in the Ponce metropolitan area has increased since 1990, putting pressure on the market. REALTORS^® and local government housing sources report tight rental housing market conditions, especially in Ponce. The vacancy rate in the metropolitan area is estimated to be about 4 percent, down slightly less than 1 percentage point since 1990. Production of new market-rate, multifamily rental housing has been almost nonexistent in the metropolitan area. In the municipality of Yauco, Times Community Development, a Community Housing Development Organization, has built 136 units for the elderly, and private developers have completed 36 two- and three-bedroom family units in the municipalities of Guayanilla and Juana Diaz. All of these units have received either HOME funding, Low Income Housing Tax Credits (LIHTCs), or a combination of both.

The Corporation for Economic Development facilitated the construction of several affordable housing projects in Ponce. The Corporation has completed 370 single-family homes since 1995. Ponce also plans to build 19 new housing projects totaling 853 units earmarked for homeownership. These projects will attract a $21-million private investment in affordable housing.