Nonagricultural employment in the eight Southeast States rose by 555,000 jobs, or 2.3 percent, during the 12 months ending in November 1999, slightly below the 2.4-percent increase recorded during the previous 12-month period. Florida and Georgia contributed 400,000 of the total jobs. In both States, business services had an impressive increase. In Florida, the Tampa-St. Petersburg-Clearwater metropolitan area experienced both the highest rate of increase (5.3 percent) and the largest number of new jobs (60,900). About half of the increase was in business services, as the area acquired several major call centers. The job market remains tight, with the unemployment rate at 3.9 percent for the eight Southeast States. The unemployment rate in Puerto Rico remains high at 12.2 percent. However, increased residential and commercial activity and major infrastructure and public works projects, such as the Urban Train, the Northern Aqueduct, and a coliseum, contributed to an increase of 1,200 construction jobs for the 12 months ending in November 1999.

One of the largest new employers announced in the Southeast region is CommScope, Inc., a manufacturer of coaxial cable, which plans to build a $135 million industry-leading research, development, and manufacturing facility in western North Carolina. The plant is scheduled to hire more than 1,000 persons during the next 5 years. It will be Catawba County's single largest investment ever, according to local observers.

Residential building permit activity in the Southeast set a new record in 1999. Permits were issued for almost 465,600 units. Single-family activity totaled approximately 340,900 homes. All States except Kentucky recorded increased single-family activity. Multifamily activity was up 7 percent compared with 1998.

The NATIONAL ASSOCIATION OF REALTORS^® reported that existing-home sales in the Southeast totaled 1,356,800 homes in 1999, a 10-percent increase from 1998. The biggest percentage increase was in Georgia, where sales increased 16.5 percent. Florida, North Carolina, South Carolina, and Tennessee also recorded big increases in existing home sales over the year. The greatest annual percentage increase in median sales price in the region's major markets for 1998 was in the Miami area, where the price increased 10.8 percent to $134,600. The Charleston, South Carolina, metropolitan area was second, with an increase of 9.8 percent to $131,700.

The Chattanooga REALTORS^® Association announced that 1999 sales hit a 21-year high, up 6 percent over 1998. Recent sales activity declined slightly, with interest rate increases. The association estimates that first-time homebuyers accounted for 39 percent of home sales. Desoto County, Mississippi, just south of Memphis, continues to be one of that State's most active areas in single-family construction. There were 2,138 units authorized in Desoto County through November, exceeding the 2,104 permits issued in the Biloxi-Gulfport-Pascagoula metropolitan area and falling just short of the 2,399 issued in the Jackson metropolitan area.

Florida and North Carolina each had big increases in multifamily activity during 1999 (15 and 19 percent, respectively) compared with 1998. The largest increase in multifamily activity in South Florida was in Dade County, where permits increased 26 percent from 1998 to 7,018 units in 1999. The average rent increased 5 percent from fourth-quarter 1998 to $805 in fourth-quarter 1999. The rental market in Palm Beach County continued to show strength, as production increased 7.4 percent from 1998 to 3,592 units in 1999. Average rents increased 5.1 percent to $867, while rental vacancy rates remained stable. One reason for the strength observed in the rental market is the continuing increase in the cost of new homes in Palm Beach County. In South Carolina, according to Carolina Real Data, the apartment vacancy rate will increase in Columbia to 10 percent and in Charleston to 11 percent by the end of 2000, as large numbers of units in the pipeline work their way to completion.

Spotlight on Atlanta, Georgia

During 1999, the Atlanta metropolitan area continued its record-setting pace of 1998 as the Nation's busiest housing market. The number of housing units authorized by building permits totaled 60,477, 5 percent above 1998. Both single-family and multifamily activity exceeded the previous year's pace, by 5 and 7 percent, respectively. Through third-quarter 1999, new-home sales in Atlanta's booming northern suburbs were up 8 percent over the record pace of 1998, and the inventory of complete but unoccupied homes was down 6 percent from 1998. The NATIONAL ASSOCIATION OF REALTORS^® reported that the median sales price for existing homes in the area in 1999 increased more than 7 percent to $123,700. Since 1990, sales prices in the Atlanta metropolitan area have increased approximately 42 percent. Although the northern suburbs continue to absorb most of the metropolitan area's growth, housing construction has picked up on the city's south side. A back-to-the-city movement by people attempting to escape Atlanta's increasing traffic problems has led to higher sales volume and steeper price increases for in-town homes.

Most observers expect the Atlanta sales market during 2000 to be stable or slightly down from 1999 levels but still anticipate that 2000 will be one of the best years in recent memory. There is concern that recent increases in mortgage interest rates may begin to have an impact on sales volume. Some builders have reported declining sales traffic at entry-level subdivisions. Other issues affecting the sales market are rising land costs, the area's air quality, and the capacity of the infrastructure in the growing suburbs. The rapid rate of growth in many suburban counties has strained transportation networks, school systems, and water supplies, leading a number of local jurisdictions to impose moratoria on rezonings.

The rental housing market in the Atlanta metropolitan area remains relatively strong. However, some industry sources have expressed concerns about the future, given the continuing increase in the construction pipeline volume and the more competitive market conditions of recent months. Due to concerns about potential overbuilding, the Atlanta area has fallen in several national rankings of investment potential for rental housing development. To this point, however, there continues to be relatively strong absorption of new rental units.

More than 17,000 multifamily units came on the market during 1998 and the first half of 1999, and more than 18,000 apartment units are under construction in the greater Atlanta area. At the same time, the pipeline of units under construction has increased in volume, as construction times have lengthened due to shortages of skilled labor and materials. The strong market for new-sales housing has created a very competitive situation for construction labor.

Absorption of new rental units has been mixed. Some developments are renting up soon after opening, while some developments in submarkets with many new units are taking more than 2 years to lease up. A recent apartment survey reported that rent reductions were available for more than 40 percent of units in the market. Occupancy rates in existing apartment developments have recently experienced moderate declines. The conversion of approximately 5,000 rental units to condominiums during the past 2 years has helped to reduce the potential for oversupply, particularly in some in-town submarkets.