grand strand economic quarterly report 2013 - q1

E. Craig Wall Sr. College of Business Administrations Center for Economic & Community Development

Grand Strand Economic Quarterly Report First Quarter - 2013

Regional Employment

Georgetown County Unemployment Rate Horry County Unemployment Rate

Occupancy Rate

Average Daily Rate

RevPar

Airport Deplanements

Fee & Tax Revenue

Grand Strand Indicators Employment

Real Estate

Tourism

%

1.5

11.7%

5.8%

5.8%

1.7

Inventory

Sales

Median Sales Price

SFR Condo/Townhome

SFR

Condo/Townhome

SFR Condo/Townhome

3.3%

13.1%

48.4% SFR

Building Permits

The information in this report is compiled and produced by SiteTech Systems LLC and the Coastal Carolina University Wall College of Business through the E. Craig Wall Sr. College of Business Administrations Center for Economic & Community Development. Readers are advised that the authors do not represent the data contained to be definitive. Neither should the contents of this report be construed as recommendations on policies or actions.

13.8%

Welcome to the fifth issue of the new Grand Strand Economic Quarterly report, a combined effort of SiteTech Systems and the Wall College of Businesss Center for Economic and Community Development at Coastal Carolina University. We are pleased to provide the quarterly economic report of the overall economic climate of the Grand Strand economy, specifically Horry and Georgetown Counties. Employment gains in the region have been modest as the unemployment rate continues to fall, resembling the fact that unemployed people are leaving the labor force faster than jobs are being created. Consumer spending has been stable to moderately growing, at a pace in line with inflation. The unusually cold winter and early Easter had a negative impact on the tourism economy, but the summer quarter should compare favorably with last year, with some growth year-over-year. Opposing forces from a national perspective will play out over the coming year. On one hand, the continued growth in the stock market has positively affected household wealth, particularly for the retiree demographic, which could have positive effects in tourism and housing. On the other hand, fiscal uncertainty associated with the budget debate as well as the expiration of the 2 percentage point reduction in the payroll tax will weigh on investor and consumer confidence throughout the year. The national housing market recovery has been the big economic news of the last quarter. The S&P/Case-Shiller home price index of the 20 largest metropolitan areas showed over 9 percent year-over-year price appreciation in residential homes. However, percentage change ranged from a high of 23 percent in Phoenix to a low of 1.9 percent in New York City. Locally, permits for new single family homes have surged 52 percent in Horry County, year-over-year, while Georgetown County permits are up 14 percent on much lower volume.

5.8% 9.4%

6.6%

4.6%

8.2%

4.6%

5.1%

3.0%

7.0%


09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3

History 133.6 143.1 152.2 139.1 130.8 142.1 151.8 138.9 129.8 140.8 150.9 138.9 130.4 142.4 152.6 142.5 136.4

Forecast 147.0 155.9

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50.0

100.0

150.0

200.0

History

Forecast

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13

Horry

Georgetown

Employment Horry County

9.4% Unemployment Georgetown County

8.8% Unemployment

Source: SC Department of Employment & Workforce

Horry countys unemployment rate was 9.4% in March 2013. This is a year over year decrease of 1.5 points from 10.9% in March 2012. The 12-month moving average minimizes this variation and provides a clearer picture of the movement of unemployment overall. At the end of the first quarter of 2013, the unemployment rate measured by this moving average stood at 9.87%. The overall unemployment rate is generally declining from its peak in 2010.

Georgetown Countys unemployment rate was 8.8% in March 2013. This is a decrease of 1.7 points from the rate of 10.5% in March 2012. The unemployment rate in Georgetown County measured by the 12-month moving average stood at 9.3% at the end of the first quarter of 2013. The overall unemployment rate in Georgetown County is also generally declining from its peak in 2010. Georgetown County continues to maintain a lower unemployment rate than Horry County due to its heavy manufacturing base.

Regional Employment (Thousands)

Unemployment Rate By County (12-Month Moving Average)

Regionally, the first quarter has a higher unemployment rate due to the end of seasonal employment for the winter holidays. The unemployment rate has continued to decline since 2010 in both Horry and Georgetown Counties quarter over quarter as regional employment continues to increase. Regional employment increased to 136,400 workers in the first quarter of 2013. This is an increase of 6,000 employed (4.6%) from the 130,400 workers in the first quarter of 2012.


0102030405060708090

100

52-Week Moving Average of Hotel, Condotel and Campground Rentals

Occ. Rate

Avg. Daily Rate

RevPar

Tourism

ADR

Occupancy Rate

RevPar

The Average Daily Rate (ADR) for vacation accommodations is a seasonally sensitive measure owing to the fluctuation in tourism activity from summer to winter months. For first quarter of 2013, the ADR, excluding beach house rentals, averaged $52.20. This is a decrease of $2.00 (3.7%) from the 1st quarter of 2012 ADR of $54.20. For measuring the strength of the economy, a more suitable long-term measure of this activity is the 52-week moving average. At the end of the first quarter of 2013, the 52-week moving average for ADR equaled of $94.03. This is $6.14 (7.0%) higher than the first quarter of 2012 ADR of $87.89.

The occupancy rate for vacation accommodations excluding beach house rentals is similarly a seasonally sensitive measure. In the 1st quarter of 2013, the occupancy rate averaged 27.6%. This is a decrease of 0.7 basis points from the occupancy rate of 28.3% in the first quarter of 2012. 2013s first quarter 52-week moving average of 53.6% is 330 basis points (6.6%) higher than the average of 50.3% in the first quarter of 2012.

The Revenue Per Available Room (RevPar) for vacation accommodations measures the average revenue per room night based on the average occupancy rate and average daily rate. Also a seasonally sensitive measure, RevPar for accommodations, excluding beach house rentals, averaged $127.60 in the first quarter of 2013. 2013s first quarter 52-week moving average for RevPar stood at $50.29, an increase of $6.08 (13.8%) over the $44.21 average for the first quarter of 2012.

Source: CCU Clay Brittain Jr. Center for Resort Tourism


There were 104,900 deplanements at the Myrtle Beach International Airport (MYR) in the 1st quarter of 2013. This is down 3,500 deplanements (3.3%) from the 1st quarter of 2012. The 4-quarter moving average reduces the variation in number of deplanements as it seasonally-adjusts the data, providing a better depiction of activity at the Myrtle Beach International Airport. The 4-quarter moving average shows an average of 185,475 deplanements at the end of the first quarter of 2013. This is a decrease of 34,975 (15.9%) from the average of 220,450 deplanements at the end of the first quarter of 2012.

09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3History 109.2 208.7 248.8 174.1 108.4 230.6 309.5 220.1 110.7 239.4 337.2 196.8 108.4 200.5 264.3 172.2 104.9

Forecast 214.2 282.9

0.0

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MYR Airport

Source: Horry County Department of Airports Myrtle Beach International Airport

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

2008 -Q4

2009 -Q1

2009 -Q2

2009 -Q3

2009 -Q4

2010 -Q1

2010 -Q2

2010 -Q3

2010 -Q4

2011 -Q1

2011 -Q2

2011 -Q3

2011 -Q4

2012 -Q1

2012 -Q2

2012 -Q3

2012 -Q4

2013 -Q1

220,450

185,475

MYR Deplanements (4-Quarter Moving Average)

MYR Deplanements (Thousands)


09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3History $1.2 $2.9 $3.8 $2.1 $1.1 $2.5 $4.0 $1.8 $1.0 $2.6 $4.3 $2.0 $1.2 $2.9 $4.0 $1.7 $1.2

Forecast $2.8 $4.1

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

History

Forecast


Forecast 1.2 4.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

History

Forecast


Forecast 3.7 7.9

0.02.04.06.08.0

10.012.014.016.0

History

Forecast

Tourism Tax Revenue

5% State Admissions Tax ($ Millions)

Accommodations Tax ($ Millions)

Horry 1.5% Hospitality Fee Revenue ($ Millions)

We monitor three separate taxes on tourism activity in the Grand Strand: the Horry County-wide 1.5% hospitality fee, the state accommodations tax assessed in Horry and Georgetown Counties, and the state admissions tax assessed in Horry and Georgetown Counties. Revenue from these three sources totaled $6.6 million in the 1st quarter of 2013, an increase of $500,000 (8.2%) from the 1st quarter of 2013.

Source: Horry County Government

Source: South Carolina Department of Revenue

Source: South Carolina Department of Revenue


$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

2008

- Q

420

09 -

Q1

2009

- Q

220

09 -

Q3

2009

- Q

420

10 -

Q1

2010

- Q

220

10 -

Q3

2010

- Q

420

11 -

Q1

2011

- Q

220

11 -

Q3

2011

- Q

420

12 -

Q1

2012

- Q

220

12 -

Q3

2012

- Q

420

13 -

Q1

Horry 1.5% Hospitality Fee

Accommodations Tax

State 5% Admissions

Below we show the three tourism tax revenue metrics using a 4-quarter moving average that includes the current period in addition to the prior three periods to reduce the seasonality while analyzing the data. The 4-quarter moving average shows tax revenues collected totaling $15,475,000 at the end of the 1st quarter of 2013. This is an increase of $1,000,000 (6.9%) from the $14,475,000 at the end of the 1st quarter of 2013. We note that the SC DOR received a revenue ruling in 2011 enabling them to review back ten years to try to collect unpaid taxes owed on vacation rental by owner properties. These collections are applied in the period of receipt, not period of business.

Tourism Tax Revenue

Source: Horry County Government and South Carolina Department of Revenue

Tax Revenues (4-Quarter Moving Average)

$2,450,000 $2,525,000

$5,050,000

$4,375,000

$7,975,000

$7,575,000


PEAK Sept 2005557

LOWEST Jan 2009149

Mar. 2013376

100150200250300350400450500550600

Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13

March 2011 5,033

March 2012 4,656

March 2013 4,869

4,0004,2004,4004,6004,8005,0005,2005,400

# of

Lis

tings

$182,500

$170,740$166,153

2010 2011 2012

817905

1,142

2010 2011 2012

Real Estate

There were 1,004 single family residence sales with a median sales price of $174,945 in Horry and Georgetown Counties in the 1st quarter of 2013. Sales are up 13.1% while the median sales price is also up $5,045 (3.0%) from the same period in 2012. The SFR inventory at the end of the 4th quarter was 4,869 homes, an increase of 4.6% from the same period in 2012.

Historical Sales Activity

SFR Sales Activity 1st Quarter # of Sales

Historical Inventory Levels

Source: CCAR MLS & SiteTech Systems

1st Quarter Median Sales Price

804888

1,004

2011 2012 2013

$172,000

$169,900

$174,945

2011 2012 2013


March 2011 5,105

March 2012 4,789

March 2013 4,231

4,0004,2004,4004,6004,8005,0005,2005,4005,600

# of

Lis

tings

$106,900

$99,000

$104,000

2011 2012 2013

815 754957

2010 2011 2012

821 836

915

2011 2012 2013

Peak July 2005861

Mar. 2013339

50

250

450

650

850

1050

Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13

Lowest Jan. 2009117

Real Estate

There were 915 condo/townhome sales in Horry and Georgetown Counties in the 1st quarter of 2013 with a median sales price of $104,000. The number of sales is up 9.4% while median sales price has increased $5,000 from the same period in 2012. The condo/townhome inventory at the end of the 1st quarter was 4,231 units, a decrease of 558 units (11.7%) from the same period last year.

Historical Sales Activity

Condo/Townhome Sales Activity 1st Quarter # of Sales

Historical Inventory Levels

Source: CCAR MLS & SiteTech Systems

1st Quarter Median Sales Price


09Q1 09Q2 09Q3 09Q4 10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3History 230 378 446 453 388 482 334 317 314 419 461 343 368 582 621 579 546Forecast 621 640

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700

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Forecast

Real Estate Building Permits

Single Family

There were 546 building permits issued in the first quarter of 2013 for single family homes in Horry and Georgetown Counties combined. This is an increase of 48.4% over the 368 permits issued in the 1st quarter of 2012. There were a total of 2,150 permits issued in 2012, an increase of 613 permits (39.88%) over the 1,537 permits issued in 2011 and less than 35% of the 6,484 permits issued at the peak in 2006.

Source: HUD State of the Cities Data System

546

6,484

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Grand Strand Economic Quarterly ReportFirst Quarter - 2013EmploymentTourismMYR AirportTourism Tax Revenue Tourism Tax Revenue Real EstateReal EstateReal Estate

grand strand economic quarterly report 2013 - q1

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