Q2 2012 Tacoma, Washington Commercial Real Estate Economy

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Q2 2012 Tacoma, Washington Commercial Real Estate Economy

Gritty blue-collar Tacoma, Seattle’s small companion city to the south, follows in the wake of Seattle’s robust economic recovery, pulled along by its greater strength. While Tacoma lacks Seattle’s large white-collar employment sector, including the presence of world-class high-tech giants like Microsoft, Google, and Amazon.com, it shares, to some extent, in the benefits to manufacturing bestowed by The Boeing Company and the benefits to trade and distribution granted by trade flows through regional ports. Thus, while its employment growth rates and totals trail Seattle’s, Tacoma is also on its way to economic recovery.

According to data provided by the U.S. Bureau of Labor Statistics (BLS), total non-farm employment in the Tacoma Metropolitan Division (Pierce County) as of August was up 6,700 jobs (2.4%) over 12 months and was up 8,200 jobs (3.0%) since August 2010. With orders pouring in from both domestic and foreign carriers, Boeing’s resurgence post recession seems to promise good times ahead for regional manufacturing and related business (Boeing has several assembly facilities in the region but builds some of its aircraft elsewhere as well—in South Carolina, for example). In the largest deal in the firm’s history, one among numerous others, Southwest Airlines ordered 208 Boeing 737s, including 150 of the fuel-efficient Max design in December. As described by The News Tribune (Tacoma) at the time, the Max aircraft will be built in Seattle’s Renton plant (some 25 miles north of Tacoma). Regional benefits are expected. Employment in Tacoma area Manufacturing as of August, meanwhile, was up 700 jobs (4.1%) from 12 months prior and was up 1,200 jobs (7.3%) over 24 months.

Other sectors also see gains. Employment in Trade, Transportation, and Utilities was up 1,400 jobs (2.5%) over 12 months, the Professional and Business Services sector saw a 900-job (3.8%) August-to-August increase and the Education and Health Services sector saw a same-period gain of 2,200-jobs (5.2%). Even the Construction sector, among the chief victims of the recession, enjoys the return of growth: employment therein as of August was up 800 jobs (4.5%) year-over-year. A closer look, however, reveals much ground to be made up. Employment in Construction per the latest August remained down 8,500 jobs (32.2%) from August 2007. Similarly, total non-farm employment as of August 2012 remained down fully 11,200 jobs (4.1%) from five Augusts prior. Seattle, for its part, has made greater progress in its return to pre-recession employment numbers.

Improvement, meanwhile, is indicated for the local housing market. According to an October report in The News Tribune citing Northwest Multiple Listing Service data, “signs of hope” may have appeared for the local home sellers. As part of an even stronger regional trend, “a lean supply of homes and condominiums for sale coupled with a healthier supply of buyers helped drive up average residential sale prices… 4.6% in Pierce County” in September. The median selling price for “a residence” in the county for the month was $200,500. Other favorable news includes a 13.36% increase in pending sales year-over-year, alongside a 27.79% decline in inventory for sale. The number of closed sales, meanwhile, declined 4.09% to 773 units. This may not be an unwelcome turn: according to brokers, notes the report, “the tight supply situation means that buyers can no longer make low-ball offers and expect to buy a home.”