m-ncppc prince george’s county planning department august ... · 1 prince george’s pulse...
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PulsePulseprince george’s
M-NCPPC Prince George’s County Planning Department AUGUST 2015 • Vol. 1, Issue 2
CONTENTS
Employment and Wages ........ 2Third Quarter EmploymentTotal WagesAverage Wage Per WorkerQuarterly Total EmploymentGross Domestic Product
Real Estate .............................. 4
Housing MarketMedian Home Sales PriceHousing Market TransactionsForeclosure EventsMedian Sale PricesDays on the MarketRent and Household Size
Commercial MarketCommercial Market CompositionVacanciesNet Absorption (Space Leased)Rental Rates
County Revenues ................... 7
Sales and Use TaxesChanges in Revenues
The Prince George’s County Planning Board of The Maryland-National Capital Park and Planning Commission (M-NCPPC) is pleased to introduce The Prince George’s Pulse, a quarterly business report that highlights the state of the County’s economic condition.
The newest in our resource family, The Prince George’s Pulse features quarterly briefs on the County’s economy, job market, housing and real estate markets, business developments, and revenue streams. Each issue includes easy-to-understand infographics, color-coded layout for each brief, and a comparison report for the corresponding quarter in the previous year.
As you read this business report, you will find a wealth of information, including performance of various business sectors and industries, employment and wages, construction, vacancy and rental rates, sales and foreclosures, and any noteworthy business and residential developments. The Prince George’s Pulse will not only provide a multifaceted view of the County’s progress, but demonstrate how everyone plays a role in stimulating the economy and improving our quality of life!
Visit www.pgplanning.org/Resources/Publications/PG_Pulse.htm for future editions! We hope The Prince George’s Pulse will keep you informed and involved in planning an even GREATER future for Prince George’s County.
Sincerely,
Elizabeth M. HewlettChairman, Prince George’s County Planning Board
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2013 and 2014 Third Quarter Average Employment
82,9
82
32,2
91
182,
850
298,
122
87,6
69
31,8
00
184,
338
303,
807
84,5
03
32,0
22
186,
701
303,
226
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Government Sector Private Sector Goods Private Sector Service
Average Employment in All Industries
2013 and 2014 Quarterly Average Employment
3rd Quarter 2013 2nd Quarter 2014 3rd Quarter 2014$1
,463
.8
$482
.6
$1,9
26.6
$3,8
73.0
$1,4
44.4
$475
.9
$2,0
31.1
$3,9
51.5
$1,5
58.3
$508
.7
$2,0
07.5
$4,0
74.5
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Government Sector Private Sector Goods Private Sector Service Total Wagesfor All Industries
2013 AND 2014 Quarterly Total Wages(in millions of dollars)
3rd Quarter 2013 2nd Quarter 2014 3rd Quarter 2014
$1,3
57
$1,1
50
$811 $9
99
$1,2
67
$1,1
51
$848 $1
,001
$1,4
18
$1,2
22
$827 $1
,034
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Government Sector Private Sector Goods Private Sector Service Average Weekly Wagefor All Industries
2013 and 2014 Quarterly Average Weekly Wages
3rd Quarter 2013 2nd Quarter 2014 3rd Quarter 2014
TOTAL WAGESBetween the third quarters of 2013 and 2014, total wages increased overall in the three employment areas. The largest increase in total wages ($94.5 million) occurred in the government sector, representing 6.5 percent, followed by $80.9 million in private service sector industries, also representing 4.9 percent. Total wages in the private sector goods industries increased by $26.1 million (5.4 percent).
2013 and 2014 Third Quarter Total Wages(in millions of dollars)
2013 and 2014 Third Quarter Average Weekly Wage(per worker)
Source, all of this page: Maryland DLLR, (http://www.dllr.maryland.gov)
Employment and Wages
THIRD QUARTER EMPLOYMENTDuring the third quarters of 2013 and 2014, 61 percent were employed in private sector service industries while the rest were employed in the public sector and private sector goods production. Also between quarters, the public sector added more than 1,500 jobs. There were also 3,851 additional jobs in the private service sector, while private goods sector had 269 fewer jobs.
AVERAGE WAGE PER WORKEROverall, the average weekly wage per worker in the County increased from the third quarter of 2013 to the third quarter of 2014. The largest increase of $72, representing 6.3 percent, occurred for workers in the private sector goods industries, followed by an increase of $61 (4.5 percent) for government sector workers. There was only a $16 (1.9 percent) increase in the average weekly wage of private sector service workers during the period.
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GROSS DOMESTIC PRODUCTThe Gross Domestic Product (GDP) for the County in 2014 was $44.1 billion, slightly more than half that of Montgomery County ($82 billion), but significantly greater than Anne Arundel County ($35.7 billion) and Howard County ($24.6 billion). GDP is the monetary value of all the finished goods and services produced within the County’s borders. The GDP growth rates, which represent the extent to which the value of total economic activity increased from the recent economic recession to 2014, show that the highest rate occurred in Howard County followed by Anne Arundel County. Among the counties being compared, Prince George’s County recorded the lowest GDP growth rate of 0.5 percent.
Tracking the Economies of Prince George’s County and Neighbors
Source: National Association of Counties (http://explorer.naco.org, and Bureau of Economic Analysis)
Prince George’sCounty
MontgomeryCounty
HowardCounty
Anne ArundelCounty
2014
No
min
al G
DP
(in
bill
ion
s)
$80
$90
$70
$60
$50
$40
$30
$20
$10
$0
3.5%
4.0%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
4.5%
� 2014 Nominal GDP (in billions)
� GDP Growth Rate (since Economic Recession of 2007 through 2009)
$44.1(0.5%)
(1.2%)
(3.7%)
(2.9%)
$82.0
$24.6
$35.7
QUARTERLY TOTAL EMPLOYMENTQuarterly average employment increased by more than 5,000 between third quarter 2013 and third quarter 2014. The employment gains were both in public and private sectors. There were modest increases in average wages as well.
5,000 Jobs
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Real Estate
HOUSING MARKETMedian Home Sales PriceThe median sales price for all homes sold during the fourth quarter of 2014 in Prince George’s County was $240,000, reflecting a 9.1 percent increase over the median sales price of $220,000 during the fourth quarter of 2013. The largest percentage increase in price was for single-family attached units at 21.7 percent.
Housing Market TransactionsThe total number of all units sold dropped from 3,208 units in the fourth quarter of 2013 to 2,565 units in the fourth quarter of 2014. The decline was mostly due to a reduced number of foreclosure sales. For single-family detached units, foreclosure sales made up 24.4 percent of all sales in the fourth quarter of 2013, but only 3.4 percent in the fourth quarter of 2014. Similarly, foreclosure sales for single-family attached units declined from 26.4 percent of all sales to 7.0 percent, while foreclosure sales of condominiums dropped from 35.0 percent to 3.6 percent.
Foreclosure Events For the fourth quarter of 2014, the County had 1,411 notices of defaults, the largest share (21.9 percent) of all filings statewide. This was less than the County’s third quarter filings (by 3.1 percent), but was a significant increase (by 48.6 percent) over filings one year prior. However, actual foreclosure sales for the fourth quarter of 2014 decreased (by 11.1 percent) to 929 compared to sales one year ago, representing 12.4 percent—the largest share—of statewide foreclosure sales. Lender (REO) purchases accounted for 579 of the foreclosure sales, 16.3 percent of total lender purchases statewide and the third highest concentration in Maryland. County lender purchases grew by 123.4 percent above the third quarter, and by 73.9 percent over lender purchases a year ago.
up 9.1%M E D I A N
Home Sale Price
2013
Single-Family (Detached) Single-Family (Attached) Condominium
2014 2013 2014 2013 2014
Perc
en
t of U
nits
So
ld
70%
60%
50%
40%
30%
20%
10%
0%
� New � Regular Resale � Foreclosure � REO
Source: Metrostudy, 2015
Percent of Transactions by Unit TypesFourth Quarter Comparison
REO properties are properties that have gone through the foreclosure process and failed to sell at auction and are therefore owned by the bank or lender.
SINGLE-FAMILY (Detached) 3.7% $254,000 in Fourth Quarter 2014 $245,000 in Fourth Quarter 2013
SINGLE-FAMILY (Attached) 21.7% $250,750 in Fourth Quarter 2014 $177,350 in Fourth Quarter 2013
CONDOMINIUM 10.1% $95,750 in Fourth Quarter 2014 $87,000 in Fourth Quarter 2013
Number County Share of State Total
% Change from Third
QuarterNotices of Default 1,441 21.9% -3.1%
Notices of Sales 929 21.4% -15.6%Lender (REO) Purchases 579 16.3% 123.4%
Source: Realty Trac, January 2015
Property Foreclosure Events In Prince George’s CountyFourth Quarter 2014
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Increase in Median Sale PricesThe median sale prices for new and regular resale of single-family units increased 8 percent and 6.4 percent, respectively, while Real Estate Owned (REO) prices dropped 7.3 percent. The largest increases in median sale prices were for single-family attached units, with new and regular resale sales gaining above 14 percent. For condominiums, the largest increase in median sale prices of 22.1 percent occurred for regular resale.
Days on the MarketThe average number of days on the market for all types of units increased in the last two months of the first quarter 2015 compared to the first quarter of 2014.
Rent and Household SizeThere was a consistent increase in Median Gross Rent in Prince George’s County in recent years. The Median Gross Rent increased by $189 (18 percent) from $1,052 in 2005 to $1,241 in 2013. Concurrently, the average household size increased during the period. The average household size of renter households increased by 0.14 from 2.55 to 2.69, while the average household size of owner households also increased, but by a smaller margin of 0.06, from 2.83 to 2.89.
Me
dia
n G
ross
Re
nt
2005-2007
$1
,05
2
$1
,10
9
$1
,14
0
$1
,18
0
$1
,24
1
$1
,21
6
$1
,10
9
2006-2008 2005-2009 2006-2010 2007-2011 2008-2012 2009-2013
Ave
rag
e H
ou
seh
old
Siz
e (
in P
ers
on
s)
2005-2007 2006-2008 2005-2009 2006-2010 2007-2011 2008-2012 2009-2013
2.9
2.8
2.7
2.6
2.5
2.4
2.3
� Owner-Occupied � Renter-Occupied
2.55
2.832.8
2.842.87 2.86 2.87
2.89
2.512.53
2.582.62
2.662.69
Source: U.S. Census Bureau, American Community Survey, 3-Year and 5-Year Estimates
Single-Family(Detached)
-5%
-10%
25%
20%
15%
10%
5%
0%
Single-Family(Attached)
Condominium
� New � Regular Resale � REO
Source: Metrostudy, 2015
Percent of Change in Median Sales Price by Transaction and Unit Type
Fourth Quarter 2013 to Fourth Quarter 2014
October
Ave
rag
e N
um
be
r of D
ays
60
50
40
30
20
10
0November December
� 1st Quarter 2014 � 1st Quarter 2015
Source: Real Estate Business Intelligence, 2015
Days on Market Comparison
Recent Changes in Average Household Size and Rental Rates Prince George’s County
6 Source, all graphs this page: CoStar, Accessed in June 2015
Perc
en
t of R
en
tab
le B
uild
ing
Are
a
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
IndustrialB
IndustrialC
30%
35%
25%
20%
15%
10%
5%
0%
Percent of Region’s Commercial Real Estate in Prince George’s County
Perc
en
t Ch
an
ge
in V
ac
an
cy
Rate
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
IndustrialB
IndustrialC
6%
5%
4%
3%
2%
11%
10%
9%
8%
7%
1%
0%
-1%
-2%
-3%
� County � Region
Change in Vacancy Rates: Comparing Prince George’s County and RegionFirst Quarter 2014 versus First Quarter 2015
Squ
are
Fe
et
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
IndustrialB
IndustrialC
200,000
300,000
100,000
-700,000
0
-600,000
-100,000
-500,000
-200,000
-300,000
-400,000
� 1st Quarter 2014 � 4th Quarter 2014 � 1st Quarter 2015
Total Net Absorption in Prince George’s CountyFirst Quarter 2014, Fourth Quarter 2014, and First Quarter 2015
COMMERCIAL MARKET
Commercial Market CompositionThe County is a regional leader in the volume of industrial space of all classes with more than twice as much industrial space (50,380,520 square feet) as its closest competitor for commercial real estate space in the region, Fairfax County, which has 21,796,842 square feet.
VacanciesThe County experienced a 1.2 and 0.6 percent decrease in vacancy rates respectively for Class A Office and Class B Office, while the region experienced a 0.6 percent increase for both classes. For the County, Class C Flex space saw the largest increase in vacancy of 4.7 percent. Among the other categories of commercial space, Class A Industrial vacancy rate increased by 0.9 percent in the County but decreased in the region by 3.1 percent. The County experienced a significant increase in vacancy rate of 11.6 percent for Class A Flex space. A negative percentage indicates a decline in the vacancy rate. (Office classification descriptions can be found under Endnotes.)
Net Absorption (Space Leased)Leaders in total net absorption include Retail, Class B Office, Class B Flex, and Class B Industrial space. The largest loss in the first quarter of 2015 (200,000 square feet) occurred with Class C Industrial. Negative net absorption indicates that a larger volume of space was vacated than leased for the period.
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Rental RatesFor the fourth quarter of 2014, the average rent per square foot for all types of commercial space was lower in the County than the region due to the high vacancies, especially in all classes of office space. The rate for office space was 40 percent lower, retail was 20 percent, industrial 13 percent, and flex 23 percent lower.
County Revenues
� County � Region
Ave
rag
e R
en
t Pe
r Sq
ua
re F
oo
tOf�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrial
AIndustrial
BIndustrial
C
$30
$35
$40
$25
$20
$15
$10
$5
$0
Rental Rate: Comparing Prince George’s County to the Region
2.9%
3.5%
Perc
en
t Gro
wth
Prince George’sCounty
Maryland
3.0%
3.5%
4.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
Source: Prince George’s County FY 2014 Budget
Second Quarter Sales and Use Tax Growth in Prince George’s CountyCompared to the State—2013/2014 � 2nd Quarter 2013
$39.
9
$40.
8
$41.
7
$42.
3
$41.
4
$43.
6
$123
.1
$126
.6
� 2nd Quarter 2014
Sale
s a
nd
Use
Ta
x C
olle
cte
d (
in M
illio
ns)
April May June TotalSecond Quarter
Source: Comptroller of Maryland, 2015
Sales and Use Tax ComparisonSecond Quarters 2013 and 2014
0.5%
-2.5%
0.5%
-0.6%Property Taxes
Income Taxes
Other Taxes
Other Revenues
Change in General RevenuesFY 2013 TO FY 2014
Source: Prince George’s County FY 2014 Budget
Change in General RevenuesFY 2013 to FY 2014
Source: CoStar, Accessed in January 2015
SALES AND USE TAXESSales and use taxes1 collected during the second quarter of 2014 were $3,525,416, 2.9 percent higher than the second quarter of 2013. The 2.9 percent increase in sales and use taxes collected in the County was slightly less than the overall 3.5 percent increase in the State of Maryland.
CHANGES IN REVENUESFrom Fiscal Year 2013 to 2014, there were modest (0.5 percent) increases in revenues from property taxes and other taxes. These were, however, offset by noticeable declines in income taxes and other revenues.
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�e Maryland-National Capital
Park and Planning Commission
The Maryland-National Capital Park and Planning CommissionPrince George’s County Planning Department, Research/Special Projects Section
14741 Governor Oden Bowie DriveUpper Marlboro, MD 20772
www.pgplanning.org | 301-952-3065 | TTY: 301-952-4366
Endnotes
1 Use Tax: The use tax is imposed on consumers of tangible personal property that is used or consumed. Use taxes are also used to help defray the cost of public services associated with particular types of personal property. The purpose of a use tax is to help recoup the cost of public services directly related to the use of certain types of personal property. The most common use taxes are assessed on motor vehicle and boat licenses. User fees are also charged for docking privileges in airports and harbors.
Office Classifications
Class A Office: In general, a Class A building is an extremely desirable, investment-grade property with the highest quality construction and workmanship, materials and systems, significant architectural features, the highest quality finish and trim, abundant amenities, and first rate maintenance and management. It is normally occupied by prestigious tenants with above average rental rates and in an excellent location with exceptional accessibility.
Class B Office: A Class B building offers more utilitarian space without special attractions. It will typically have ordinary architectural design and structural features, with average interior finish, systems, floor plans, and overall condition. It will typically not have the abundant amenities and location that a Class A building will have.
Class C Office: A functionally or economically obsolete building is one that does not offer a viable alternative for space and does not “compete” with others of similar type for occupancy by businesses seeking a location for operations. These buildings will usually have externally visible physical or structural features as well as internal ones that render it undesirable to be leased and therefore not competitive with any other properties in the market.