Nonagricultural employment in New York increased by 110,000 jobs, or 1.4 percent, between February 1997 and February 1998. Employment in New Jersey increased by 87,900 jobs, or 2.4 percent, during the same period. New York's unemployment rate was 6.2 percent in February 1998, down from 6.5 percent in February 1997. New Jersey's unemployment rate also decreased during the same period, from 5.3 percent to 5.0 percent.

Employment in New York City increased by 62,500 jobs, or 1.9 percent, in the 12 months ending in February 1998. The unemployment rate as of February 1998 was 9.2 percent, down 1 percentage point from February 1997. The city has now recovered more than half of the jobs lost during the recession of 1989 to 1992.

New York and New Jersey issued building permits for 12,457 units during the first quarter of 1998, a 5-percent increase over the same period in 1997. The number of units held steady in New York and increased 11 percent in New Jersey.

According to the New York Association of REALTORS^®, the number of existing homes sold statewide in 1997 was up 8 percent from 1996. The median sales price of $127,180 represented a 5.7-percent increase from the 1996 median price. The New Jersey Association of REALTORS^® reported that home sales increased 6.4 percent in 1997 compared with the previous year, and the median sales price of $155,100 was virtually unchanged.

Rents for apartments and sales prices for cooperatives and condominiums continued to soar in 1997. There was also a substantial increase in the number of units sold. The real estate firm of Douglas Elliman noted in a recent market report that average condominium prices climbed 30 percent in 1997. Several realtors were quoted in a recent article in the New York Times to the effect that the price of a standard two-bedroom cooperative apartment rose 15 percent in 1997. Sales of cooperatives and condominiums in 1997 increased 18 percent over their 1996 level, according to the Douglas Elliman report. Feathered Nest, a real estate firm specializing in rental properties, reported that rents of apartments in the Upper East Side and Upper West Side rose 6 percent during 1997.

Manhattan's rising rents and soaring sales prices in cooperatives and condominiums have buoyed the housing markets of the outer boroughs, as has the lack of new construction. According to a comprehensive survey conducted by Case Sheller Weiss -- a real estate statistics firm in Cambridge, Massachusetts -- house prices rose in all but 14 of the 130 ZIP Code areas in the boroughs outside Manhattan. The only borough in New York City that experienced a sales decline was Queens, where single-family sales declined 6.7 percent in 1997. However, the average sales price of a single-family home in Queens was $172,400, about 6 percent higher than in 1996. The Queens cooperative market, which was very depressed in the early 1990s, is also strengthening.

In Staten Island, home sales increased 12 percent in 1997 over the previous year, and home prices rose in each of the 12 ZIP Code areas for an overall increase of 4 percent. In the Bronx, home sales increased 12 percent in 1997. Home prices in the Bronx generally ranged between $145,000 and $180,000.

Single-family home sales increased in Westchester County, on Long Island, and in Northern New Jersey in 1997. The median sales prices for the year were $293,400 in Westchester County; $180,000 in Nassau County and $145,000 in Suffolk County on Long Island; and $199,000 in Northern New Jersey.

Spotlight on Buffalo-Niagara Falls, New York

Employment levels in the Buffalo-Niagara Falls metropolitan area slowly continue to improve. The average annual nonagricultural employment increased by less than 1 percent to 543,700 persons from 1996 to 1997. Despite the gain, the unemployment rate increased from 5.1 percent to 5.4 percent due to the number of people entering the workforce. Between 1990 and 1997, the population of the metropolitan area decreased by approximately 2 percent to 1.16 million.

Although the area's long-term decline in the manufacturing sector continues, the durable goods industry, including the automotive sector, remains surprisingly strong. More than $120 million has been invested at American Axle & Manufacturing, Inc.; the Tonawanda General Motors engine facility; and the Ford Motor Company's Woodlawn Stamping Plant. The Tonawanda plant is one of the largest engine manufacturing facilities in the Nation, producing between 8,000 and 9,000 engines per day.

Several large construction projects have been recently completed. These include the construction in downtown Buffalo of the $122.5 million Marine Midland Arena -- home of the Buffalo Sabres hockey team -- and a $186 million renovation project at the Greater Buffalo International Airport. In addition, plans for a major development initiative involving the waterfront area of the City of Buffalo were recently announced.

Another prospective development in the area that could significantly boost employment in the services sector is planned for the escarpment overlooking Niagara Falls in Canada. Falls Management Corporation, which includes the Hyatt Hotel organization, plans to invest more than $1 billion in a 350-room hotel and a 100,000-square-foot gaming casino to be called the Hyatt Resort and Casino. Related commercial developments will include a theme park called River Country; a 12,000-seat indoor-outdoor amphitheater; a world-class retail shopping mall; and a convention/exhibition area, all linked by a 5.3-mile monorail loop.

Since 1990, residential construction in the Buffalo-Niagara Falls metropolitan area has averaged approximately 2,800 units per year. Single-family homes account for approximately 75 percent of the development. Activity has been the greatest in Amherst, Clarence, Hamburg, Lancaster, Orchard Park, and West Seneca, all in Erie County, and in Lockport and Wheatfield in Niagara County.

The sales market in the Buffalo-Niagara Falls area has been relatively slow since 1990. The New York State Association of REALTORS^® reported that existing sales prices were flat in 1997, and the sales volume was relatively unchanged from the 1996 level. The median sales price of existing homes in 1997 was $83,800 in Erie County and $71,300 in Niagara County. Although the ample supply of homes for sale has created a buyer's market, it is hoped that the recent increases in buyer activity will mean a more balanced market in the future.

Rental housing construction in both Buffalo and Niagara Falls typically has had some form of subsidy because of the depressed rental market conditions. A $28 million HOPE VI grant provided from the U.S. Department of Housing and Urban Development (HUD) to the Buffalo Municipal Housing Authority (BMHA) will result in the redevelopment of most of the 666-unit Lakeview public housing development on the west side of the city of Buffalo. After this area has been redeveloped, it will include 50 market-rate sales houses and 570 assisted rental units, 200 of which will be senior citizen housing. Recently, there has also been evidence of developer interest in commercial and residential projects in downtown Buffalo, especially in the Chippewa Street area and the Theater District. Projects involving the Low-Income Housing Tax Credit program HUD mortgage insurance have been proposed. In general, however, most rental housing development has been oriented toward suburban townships.

Rental housing vacancy rates are estimated to be in excess of 10 percent within the cities of Buffalo and Niagara Falls and in the 5- to 6-percent range in their suburbs. Rents in the central cities remain flat, and recent rent increases in older suburban apartment developments usually did not exceed 1 or 2 percent. However, some luxury rental apartment complexes in more affluent suburban areas are able to command higher rent increases.