The rate of economic growth in the Southwest region moderated in 1999. Nonagricultural employment grew 2.4 percent in the 12-month period ending in November 1999, compared with 3 percent for the same period in 1998. Texas again led the region with a 2.9-percent rate of growth, closely followed by Oklahoma at 2.4 percent. Local sources are forecasting the rate of job growth in Texas during 2000 at 2.4 percent. Job growth in the coming year in Arkansas is expected to be approximately 1.5 percent, with the Fayetteville-Springdale-Rogers area expecting a 2.5-percent increase.

The market for both new and existing homes remained strong in the Southwest. According to the NATIONAL ASSOCIATION OF REALTORS^®, sales of existing homes in the region during 1999 reached 834,100 homes, up 7 percent from 1998. Double-digit increases in sales were reported for Arkansas and New Mexico. Resales in Texas were up 8 percent for the year, to 551,900. Single-family building permit activity in the Southwest in 1999 totaled 140,970 homes, up 1.3 percent from 1998. Permits in Oklahoma increased 11 percent, due in large part to rebuilding activity after numerous tornadoes.

Multifamily housing permit activity for 1999 in the Southwest was 17 percent below the 1998 volume. Texas multifamily permits were down 20 percent to 44,771 units, due to big declines in the Dallas-Fort Worth and Houston-Galveston-Brazoria areas. Activity in the Houston-Galveston-Brazoria area totaled 11,135 units in 1999, a 49-percent drop from 1998. The decline in permits in both of these markets reflects a response to the large volume of units currently in the pipeline and the more competitive market conditions during the past 2 years.

Demand for new sales housing in the Austin-San Marcos area during 1999 mirrored that in 1998. Single-family permits were issued for 8,510 homes. The city of Austin now accounts for only 25 to 30 percent of the new homes built in the metropolitan area, down from 80 percent in the 1970s. The rental housing market in the Austin area also was very strong in 1999. According to Capitol Market Re-search, apartment occupancy increased to 98 percent in the Austin area. With the slower rate of completions due to material and labor shortages, the number of apartment units entering the market in 2000 will not be as great as anticipated, which should help sustain occupancy rates around 97 percent.

In the San Antonio area, the sales market was very strong. According to data from the Multiple Listing Service, home sales totaled 14,475 units in 1999, up 10 percent from 1998. The median sales price was $89,000, up 2 percent. Conditions in the rental market were relatively tight at the end of 1999, with apartment occupancy rates of 95 percent or higher typical in most of the larger developments. The market is expected to be more competitive by spring 2000, when hundreds of new apartment units will be ready for occupancy. The Albuquerque apartment market continues a slow recovery, with occupancy at 91 percent as of December 1999. Of the approximately 2,000 new apartment units completed in 1999 in the Albuquerque area, 58 percent were financed with low-income housing tax credits.

The number of single-family building permits issued in the Oklahoma City metropolitan area for 1999 totaled 5,220, up 20 percent from 1998. A significant portion of the increase occurred in communities affected by the tornadoes that destroyed more than 2,500 homes in the area in May. The apartment market in the Oklahoma City area continues to improve, ending 1999 in a balanced condition, with occupancy rates at approximately 93 percent and modest rent increases. Almost 6,000 new units have come on the market during the past 5 years, and more than 1,800 units were completed in 1999.

Spotlight on Dallas-Fort Worth, Texas

The Dallas and Fort Worth metropolitan areas, referred to as the Metroplex, encompass 12 counties in north-central Texas. As of July 1, 1998, the area had an estimated population of more than 4.8 million, a 19-percent increase since 1990. The population is expected to exceed 5 million by the time of the 2000 census. Major contributors to the growth include the telecommunications and business services industries and the distribution and warehousing industry. Relatively low land costs, a central location, world-class airport facilities, no State income tax, and a high-technology industrial base have all fueled the area's rapid economic growth.

During the past 2 years, the pace of job growth has moderated from its torrid 5-percent pace of 1997, when 121,800 new jobs were added. During the 12-month period ending in November 1999, employment increased 89,200, or 3.5 percent, still a robust rate. During most of the decade, the rate of employment growth in the Dallas area exceeded the rate in Fort Worth. However, that situation appears to have changed in 1999, with employment in Fort Worth growing at a rate of 3.7 percent annually, compared with 3.3 percent in Dallas.

Much of the industrial expansion on the west side of the Metroplex has been in the 9,600-acre Alliance Airport development, which in the past 10 years has resulted in more than 14,000 jobs. Major employers located at the development include American Airlines, Nokia, Federal Express, and Burlington Northern-Santa Fe Railroad.

According to the Texas Real Estate Research Center, single-family home sales averaged more than 6,100 per month in the Metroplex during the 12-month period ending in November 1999, up 7 percent over the previous 12-month period. The average sales price was approximately $152,400, a 5-percent increase. Single-family permit activity for 1999 was up 2 percent to 32,654 homes.

The rental housing market has also been strong. In 1998 the Metroplex led the Nation in the number of multifamily units issued permits. Activity in 1999 totaled 15,482 units, down 31 percent from 1998. During 1997 and 1998, permits were issued for more than 40,250 units. Strong absorption kept average occupancy at more than 93 percent in most new apartment developments. However, the market has become more competitive, and more than 20,000 rental units are scheduled to enter the market in 2000.