Employment in New York State increased by 137,000 jobs (1.6 percent) between February 1998 and February 1999. Employment in New Jersey increased by 62,300 jobs (1.6 percent) during the same period. New York's unemployment rate was 5.3 percent in February 1999, down from 6 percent in February 1998. New Jersey's unemployment rate declined to 4.1 percent from February 1998 to February 1999.

Employment in New York City increased by 80,000 jobs (2.3 percent) between February 1998 and February 1999, with business services accounting for about 25 percent of the gain. The unemployment rate as of February 1999 was 7.6 percent, down from 8.5 percent a year earlier. The city has now recovered all of the jobs lost during the last recession.

Residential building permits in New York State increased to 8,260 units during the first 3 months of 1999, up 24 percent from the same period a year ago. In New Jersey permit activity totaled 6,948 units during the first quarter of 1999, a 20-percent increase over the same period a year ago.

According to the New York State Association of REALTORS^®, statewide home sales set a record in 1998, up 22 percent over 1997 volume and surpassing the previous high in 1996 by more than 14 percent. The median sales price of $133,000 represented a 5-percent increase from 1997. The trend of increased sales continued through the first quarter of 1999, with sales in every month up significantly over 1998. Sales of existing single-family homes were up 11 percent in March, and the increase in activity is expected to continue through the prime sales months in the Spring. The New Jersey Association of REALTORS^® reported that home sales in 1998 were up 13 percent compared with 1997, and the median sales price of $162,400 was up 5 percent over that of 1997.

Sales prices for condominiums and cooperatives continued to soar in Manhattan in 1998. The real estate firm of Douglas Elliman notes in a report on its comprehensive survey of apartment sales south of 96th Street that all unit sizes except studio apartments experienced price increases averaging about 15 percent during 1998 and that total sales increased 4 percent. The sales price of studio apartments declined 8.7 percent. The report states that overall sales were constrained by limited inventory.

Rents rose 9 percent during 1998 for apartments on the Upper East Side and West Side of Manhattan, according to a report issued by Feathered Nest, a real estate firm specializing in rental properties. The report also notes that there is now very little development of rental housing in established residential neighborhoods of Manhattan because the very limited available space is primarily being used for high-priced cooperatives and condominiums. The Feathered Nest report notes a buildup in the supply of available apartments in the last quarter of 1998, but characterizes this situation as temporary.

Manhattan's rising rents and sales prices have buoyed the housing markets of the city's outer boroughs. According to a comprehensive survey conducted by Case Shiller Weiss, Inc., sales prices in 1998 rose in all of the 130 ZIP Code areas in the boroughs outside Manhattan. The Bronx showed the greatest strength among the city's boroughs outside Manhattan. In 19 of its 25 ZIP Code areas, single-family home prices increased by 10 percent or more. The South Bronx, synonymous in the 1970s with urban blight and decay, was another area showing great strength. Half of Brooklyn's 36 ZIP Code areas experienced sales price increases of at least 8 percent.

Single-family home sales increased in 1998 in Upstate New York as well. Home sales in the Buffalo metropolitan area rose 10 percent. Sales in the Rochester area were the strongest in a decade, hitting a record 11,552 homes in the 11-county Genesee region, according to the Greater Rochester Association of REALTORS^®.

Spotlight on Bergen-Passaic, New Jersey

The Bergen-Passaic metropolitan area, across the Hudson River from New York City, has seen a population increase of almost 4 percent since 1990, to more than 1.3 million residents. Approximately one-third of the workforce in this primarily affluent suburban area commutes to other New Jersey or New York counties. During the 12 months through February 1999, employment grew by 13,800 jobs (2.2 percent). The largest addition was at Englewood Cliffs, Citicorp's technical administration center. Future job growth will result from completion of the $200 million Clifton Commons retail and entertainment center in mid-1999.

Fourth quarter 1998 data from the Studley Report and Spacedata indicate that Class A office space in the Bergen County office market has a vacancy rate of 9 percent, while Passaic County has a 14-percent vacancy rate. Monthly rents are averaging $23 per square foot in Bergen County and $20 per square foot in Passaic County.

The development of assisted-living accommodations for the elderly has increased significantly in the Bergen-Passaic area recently. Eight projects with a total of 725 units have entered the market in the past 12 months, and 6 more projects with 960 units are currently under construction. Included is a 375-unit community in Edgewater financed by the New Jersey Housing and Mortgage Finance Agency under HUD's risk-sharing program.

The apartment vacancy rate in the metropolitan area is less than 3 percent, and all new multifamily housing is absorbed rapidly. Multifamily housing activity is primarily in Bergen County. Close to 1,300 apartment units have been completed in the past year. Monthly rents typically start at $1,400 for a one-bedroom apartment and $2,000 for two bedrooms. In Edgewater -- a redeveloping, formerly heavily industrialized borough on the Hudson River -- 600 units of rental housing are currently under construction.

Single-family production has been relatively low for much of the decade. From 1991 through 1996, single-family building permit activity averaged slightly more than 325 units annually. With the improved economy in the greater New York area, new home construction has increased substantially. Permits were issued for more than 2,200 homes between 1997 and 1998 and for 378 homes in the first 3 months of 1999. Sales in the Bergen-Passaic area in 1998 were up 13 percent compared with 1997 volume, and the median sales price for the area was $213,500.