Since hitting their peaks in March 2001, payroll employment dropped 11.4% in San Francisco and 18% in San Jose. Many Alameda and Contra Costa County residents felt the impact of these job losses, as the East Bay is home to over one-third of the Bay Area's workforce.
According to a study released by the Federal Reserve Bank of New York this month, the current “jobless” recovery is the result of permanent structural changes in the U.S. economy and many of the jobs lost since the 2001 recession are not coming back. The conclusion of this study seemed to agree with the UCLA Anderson Forecast that the Bay Area would not recover quickly from the loss of 350,000 jobs over the past two and a half years.
The Manufacturing sector continued to cut jobs in August, losing 4,800 jobs since August 2002. Most of the other job losses were in trade, transportation and utilities, and leisure and hospitality. The Government sector, which is the largest employer in the East Bay, reported a slight decline in August partly because of the seasonal closure of the Alameda County Fair and summer recreational programs. The State budgetary crisis is likely to exacerbate future employment losses in this sector.
Professional and businesses services showed improvement this month, with 1,400 job gains mostly in employment services. Education and health services, which has increased by 7,600 jobs since August last year, also improved by 400 jobs this month, continuing on an upward trend that began before the recession. Financial service reported 200 jobs gained, reflecting the positive effect of an active housing market and continuing refinancing activities.
For more industry specific employment data, please clickhere.
The hotel businesses, though still depressed, performed better in July than in June. San Francisco, with the opening of the Moscone West Convention Center, faired particularly well with a 76.9% occupancy rate, up 11.9% from July 2002. Sacramento also improved 16.7% from last year with an occupancy percent of 77.4%. Except for Oakland and Marin County, all other regions had higher occupancy rates in July than the same time last year. Despite the improvements in occupancy, average daily room rates across Northern California were still much lower than last year. Overall, there were no definite signs of the recovery of the hotel market.
The median home price for a Bay Area home rose 6.5% to a four-year high of $444,000 in July. In total, 11,501 new and resale condos were sold, up 13.6% from the same time last year. This is the highest sales count since June 1999. In the East Bay, the median home price in Alameda County reached $417,000 in July, up 3.7% from the same time last year, and in Contra Costa County the median price rose to $394,000, up 14.2% from last year.
Overall, housing activity remains very strong in the Bay Area and the effects of higher mortgage rates did not appear in the July figures. However, pundits warned that the dampening effects of higher mortgage rates might show up in August or September.
The July Bay Area increases were modest in comparison to the rest of the State, however. Statewide, the median price of an exiting, single-family home increased a record-breaking 19.1 percent from $321,900 to $383,320 compared to last year.
The median number of days (Statewide) it took for a single-family home to sell in July 2003 was 27 days, compared to 28 days last month and 23 days the same time last year. The unsold inventory index, an indicator of how long it would take to deplete the stock of available homes, was 2.4 months, compared to 2.6 months for the same period a year ago. The thirty-year fixed mortgage rate averaged 5.73%, up from 5.23% last month and down from 6.49% in July 2002.
Continuing the year's first half trend, most new home activity took place in the eastern part of the East Bay, with 277 new single-family housing permits issued in Brentwood, 117 in the Contra Costa Unincorporated Area, and 79 in Hayward. Dublin, Berkeley, and the Contra Costa Unincorporated Area all issued over 30 multi-family permits as well.
In July, San Leandro permitted $2.2 million in new stores and $3.2 million in new industrial buildings; Oakland permitted $2 million in new stores; Brentwood $7.3 million; and Oakland also permitted $4.8 million in schools, libraries, and museums. Interest in office construction was concentrated in Livermore and Concord, with the former permitting $7.7 million and the latter $1.5 million. Emeryville also permitted $1.1 million in office buildings.
Brentwood permitted the largest amount of new store construction with $7.3 million, followed by San Leandro with $2.2 million, Oakland with $2.0 million, and Livermore with $1.4 million.
Bay Area shelter prices fell in July due to decreases in both rental prices and owner's equivalent rent. The CPI data for Items Less Shelter is a bi-monthly statistic that will be released next month.
