Raleigh-Durham-Chapel Hill, North Carolina During 2002 substantial job gains in the government and services sectors more than offset declines in manufacturing and trade, resulting in a modest increase in total nonagricultural employment in the Raleigh-Durham-Chapel Hill metropolitan area. During the first 11 months of 2002 employment was up 7,800 jobs, or 1.1 percent, compared with the same period a year ago. Major job losses were recorded in electrical and electronic equipment manufacturing, telecommunications, and business services, especially computer-related services. Area firms associated with the technology sector suffered major workforce reductions during 2002, most notably IBM, WorldCom, and Alcatel. Research Triangle Park, a 7,000-acre research and development employment center supporting 136 organizations and 42,000 workers, was long a major generator of new jobs in the metropolitan area, but it recorded losses of more than 1,450 jobs during the year. However, State government, the major employer in the area, posted a net gain of jobs despite the State’s budget deficit. In the short term, analysts at Economy.com expect that the metropolitan area’s recovery will be constrained by the telecommunications downturn and the ongoing fiscal difficulties faced by State government. The presence of three major universities—North Carolina State University, Duke University, and the University of North Carolina at Chapel Hill—with a combined enrollment of 67,000 students; Research Triangle Park; and the seat of State government in the metropolitan area guarantee a degree of stability to the economy and the housing market. Led by growth in Wake County (the location of the city of Raleigh) and suburban Johnston County, the population of the Raleigh-Durham-Chapel Hill metropolitan area increased rapidly during the 1990s by 38 percent to 1,187,941 as of the 2000 census. Migration accounted for more than 75 percent of the area’s growth during the decade. Johnston and Wake Counties were the fastest growing counties in the State, increasing by 50 and 47 percent, respectively, between 1990 and 2000. According to projections from the State demographer, this growth pattern has continued since the 2000 census, with the two counties accounting for nearly three-fourths of the metropolitan area’s population gain between April 1, 2000, and July 1, 2001. The annual rate of growth in population since the 2000 census is only slightly below that for 1990–2000. A total of 13,999 single-family homes were authorized by building permits in the metropolitan area during 2002, a decrease of less than 1 percent from 2001. Data provided by the North Carolina Association of REALTORS® indicate a 1.6-percent decrease in sales activity of existing homes during 2002 compared with 2001. The average sales price for existing homes sold during the first 11 months of 2002 was $193,700 according to the association, a decrease of 3.7 percent from the average value reported last year. Of 17 areas regularly monitored by the association, the Raleigh-Durham-Chapel Hill market area was the only one to record a decline in average sales price between 2001 and 2002. According to the Triangle Apartment Association and Karnes Research Company, net absorption of apartments during the 12-month period ending September 2002 was 3,039 units, a rate slightly lower than the annual average of 3,594 units observed over the past 3 years. This slower rate of absorption is reflected in the vacancy rate, which increased from 8.8 percent in September 2001 to 11.5 percent as of September 2002. However, the September vacancy rate was an improvement from the 13.0-percent rate reported in March 2002. According to analysts at Karnes Research, slight reductions in new deliveries and strong net absorption from March to September were responsible for the improvement. The vacancy rate for Wake County decreased from 13.1 percent in March 2002 to 11.9 percent as of September with four of six Wake County submarkets reporting vacancy rate decreases during the 6-month period. Durham and Orange Counties also experienced modest vacancy rate improvements during the period, from 14.3 to 11.9 percent in Durham County and 9.3 to 7.8 percent in Orange County. Average rents were essentially unchanged for the period. According to the association’s report, the proportion of communities offering rent concessions was 70 percent in September, an increase from 54 percent observed a year ago but virtually unchanged from the March 2002 rate of 71 percent. According to Karnes Research, the most active submarkets for new apartment construction in the metropolitan area are South Durham, Northeast Wake, and Southwest Wake. During 2002 building permits for new multifamily housing in the metropolitan area totaled 2,706 units, a 55-percent decrease from the rate reported for 2001. This sharply lower rate of new unit production should result in continued improvement in the rental market during the balance of 2003.

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