Following previous trends, more than half of the 387,600 new jobs were in the service and trade sectors. Texas recorded a 3.2-percent rate of employment growth, or 293,000 jobs, in the 12-month period ending February 2001. Employment gains in Louisiana during the 12-month period were stable at 1.9 percent; Oklahoma and Arkansas held at 1.7 percent, followed by New Mexico at 1.5 percent.

According to Texas Real Estate Research Center, as of February 2001 there was less than a 5-month inventory of existing homes for sale in the State. Sales of both new and existing single-family homes remained strong in most metropolitan areas, although some softness was reported in the higher price ranges. New home sales for the first quarter of 2001 in the Dallas-Fort Worth area were up approximately 1 percent compared with the same period in 2000, and starts were up 3 percent. During the same period, existing home sales in Dallas-Fort Worth declined only 1 percent from a year ago.

In both Oklahoma City and Tulsa, many homebuilders are taking a wait-and-see attitude about the future of the new sales market for the remainder of 2001 due to concerns about anticipated layoffs by some of the areas' major employers. The New Orleans Metropolitan Board of REALTORS^® reported 2,388 existing home sales in the first quarter of 2001, down from the same period a year ago. Sales increased by 2 percent in Baton Rouge, and the average price increased by 4 percent.

Balanced market conditions are typical for all of the Southwest region's major rental markets. As of the first quarter of 2001, occupancy in the Dallas area apartment market stood at 94 percent, and rents had increased 5 percent compared with the first quarter of 2000. Occupancy in the Fort Worth area was at 93 percent, and rents had increased an average of 4 percent. Market conditions remain relatively tight in the Austin rental market with an apartment occupancy rate of 97 percent. However, with 8,000 units under construction, conditions should ease somewhat as occupancy falls to less than 95 percent by the end of 2001. In San Antonio occupancy was reported at 93 percent.

Spotlight on McAllen-Edinburg-Mission, Texas

The McAllen-Edinburg-Mission metropolitan area (Hidalgo County) is in the lower Rio Grande Valley and borders Mexico. According to 2000 census data, in the 1990s this area was the fastest growing metropolitan area in Texas and the fourth-fastest growing area in the Nation. Between 1990 and 2000 the area's population increased by 49 percent, or approximately 186,000 people, to 569,463. It is estimated that approximately 30 percent of the growth in population since 1990 has been due to in-migration—primarily international—and 70 percent, to net natural gains.

The area's geographic and cultural links with Mexico contribute to its economic success as well as its population growth. After the passage of the North American Free Trade Agreement in 1993, the area's economy began to improve, and the unemployment rate declined from 22 percent in 1992 to approximately 14 percent in 2000. By February 2001 the unemployment rate was down to 12.7 percent.

Thirty miles south of the city of McAllen lies Reynosa, Mexico, with a population of more than 750,000. The maquiladora factories located across the border in Reynosa have added approximately 65,000 jobs to Reynosa since 1988, and that growth has benefited the McAllen metropolitan area, which has become the retail center for a large portion of northern Mexico and South Texas.

In the 12 months ending February 2001, nonagricultural employment in the McAllen metropolitan area increased by 7 percent (9,800 jobs) to 158,500 jobs. Wholesale and retail trade account for 27 percent of all jobs in the area. The only sector suffering recent job losses was manufacturing. There is concern that weaker sales of automobiles and electronic equipment in the United States could have a negative impact on maquiladora operations in Reynosa and, in turn, affect Hidalgo County.

In response to increases in population and households with the area's growing economy, there has also been a tremendous increase in single-family housing production. In the 12 months ending February 2001, building permits were issued for more than 4,600 new single-family homes, a 3-percent increase compared with the same period in 2000. Existing home sales in 2000 totaled 1,204 homes, a 7-percent increase over 1999 volume. In 2000, the median sales price increased approximately 3 percent to $80,000. Affordable homeownership is an important issue in this relatively low-wage area. To help in the effort, McAllen Affordable Homes, a local nonprofit organization, has started a new program for matching low-income families' savings, dollar for dollar, up to $1,500, for downpayments on homes.

Multifamily production has decreased in recent years from a high of 1,052 units in 1996 to 762 units in 1999. For the 12 months ending February 2001, production was down 2 percent to 522 units. More than half of the multifamily construction in recent years has been in developments of two to four units. Local property managers and appraisers report balanced market conditions in the area's apartment developments. Apartment MarketData Research Services reports that in the first quarter of 2001, occupancy was at 96 percent in the apartment complexes they surveyed, and rents for two-bedroom units averaged $521.

Because of the lower income found in the area, it is difficult to make larger scale new rental housing financially feasible without low-income housing tax credits and/or other enhancements. One Houston-based developer who owns other properties in the area has begun construction of a 256-unit market-rate apartment complex in McAllen.