prince george's pulse quarterly report - april 2015

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PulsePulseprince george’s M-NCPPC Prince George’s County Planning Department APRIL 2015 • Vol. 1, Issue 1

CONTENTS

Employment and Wages ........ 2

Quarterly Average EmploymentPrivate Sector GoodsPrivate Sector ServicesWages

Real Estate .............................. 4

Housing Market

Median Home Sales PriceHousing Market TransactionsIncrease in Median Sale PricesDays on the MarketRent and Household Size

Commercial Market

Commercial Market CompositionVacanciesNet Absorption (Space Leased)Rental Rates

County Revenues ................... 7

Sales and Use TaxesChanges in Revenues

Welcome to The Prince George’s Pulse, the first of a new series of business reports poised to provide quarterly updates on the economy, housing and commercial real estate markets, and current conditions and trends in the County.

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5724,996 in Second Quarter 201424,939 in Second Quarter 2013

TOTAL GOODS PRODUCING 31,800 in Second Quarter 2014 31,941 in Second Quarter 2013141

MANUFACTURING 6,649 in Second Quarter 2014 6,806 in Second Quarter 2013157

NATURAL RESOURCES AND MINING 155 in Second Quarter 2014 196 in Second Quarter 201341

Source: Maryland Department of Labor, Licensing and Regulation, 2015, www.dllr.state.md.us

Employment and Wages

QUARTERLY TOTAL EMPLOYMENT

Quarterly average employment in Prince George’s County increased slightly, by less than 1 percent, between the second quarter of 2013 and the second quarter of 2014. Only the private sector recorded gains in employment.

QUARTERLY PRIVATE SECTOR EMPLOYMENT

Goods Producing IndustriesTotal employment in goods producing industries declined slightly (by 141 jobs) between the second quarters of 2013 and 2014. The majority of the decline occurred in two minor activities—Manufacturing, which lost 157 jobs, and Natural Resources and Mining, which lost 41 jobs. Construction, a critical activity in the County, offset some of these losses with a gain of 57 jobs.

1%

Quarterly Average Employment in Prince George’s County

Comparing Second Quarters 2013 and 2014

n 2nd Quarter 2013 n 2nd Quarter 2014

Total Employment

Private Sector(Total All Industries)

Government Sector(Total)

Private Sector(Service)

Private Sector(Goods)


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Service Producing IndustriesThere was an increase of approximately two percent in the quarterly average employment in service producing industries between the second quarters of 2013 and 2014. The bulk of the increase occurred in Education and Health Services industries followed by Trade, Transportation and Utilities, and Leisure and Hospitality. There were declines for Financial Activities, Professional and Business Services, Information, and Other Services categories.

2%


TOTA

LTr

ade,

Tra

nspo

rtatio

n,an

d Ut

ilitie

s

Prof

essi

onal

and

Busi

ness

Ser

vice

s

Leis

ure

and

Hosp

italit

y

Educ

atio

n an

dHe

alth

Ser

vice

s

Fina

ncia

l Act

iviti

es

Othe

r Ser

vice

s

Info

rmat

ion

180,96

4

184,33

8

56,340

58,630

4,77

0

4,51

8

11,756

11,238

37,847

37,587

20,550 31,610

30,094

31,173

9,60

7

9,58

3

Quarterly Average Private Sector Employment in Service Producing IndustriesComparing Second Quarters 2013 and 2014


WAGES

During the second quarter of 2014, the average weekly wage per worker in the County—$1,001, up $22 from the second quarter of 2013—was slightly lower than the State of Maryland and the Washington metropolitan region, but higher than Charles and Calvert Counties. A comparison between the average wage in the government and private sectors during the same period shows that, while overall wages increased, government sector wages were higher than private sector wages—wages for the private sector goods industry being closer to government sector wages.

1,001TOTAL

TOTAL

$1,243

$1,267

$870

$892

$1,097

$1,151

800

400

1200

1600

$830

$848Source: Maryland Department of Labor, Licensing and

Regulation, 2015, www.dllr.state.md.us


Government Sector

Private Sector—All Industries

Private Sector—Goods

Private Sector—Services

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Real EstateHOUSING MARKET

Median Home Sales PriceThe median sales price for all homes sold during the third quarter of 2014 in Prince George’s County was $242,250, reflecting a 10.1 percent increase over the median sales price of $220,000 during the third quarter of 2013. The largest percentage increase in price was for single-family attached units at 18.9 percent.

Housing Market Transactions

The total number of all units sold dropped from 3,521 units in the third quarter of 2013 to 2,711 units in the third quarter of 2014. The decline was mostly due to a reduced number of foreclosure sales. For single-family detached units, foreclosure sales made up 21.4 percent of all sales in the third quarter of 2013, but only 3.7 percent in the third quarter of 2014. Similarly, foreclosure sales for single-family attached units declined from 33.8 percent of all sales to 8.8 percent, while foreclosure sales of condominiums dropped from 32.9 percent to 5.0 percent.

During 2011 and 2012, there was a significant decline in foreclosure sales that likely resulted from the drop in foreclosure events, especially notices of default and notices of sale. However, data from RealtyTrac show a reversal beginning in 20131. Between the first quarter of 2013 and the third quarter of 2014, the number of foreclosure events increased by 3,222 (63 percent), 2,367 (73 percent) of them being notices of default. This change suggests that the foreclosures may temporarily increase in upcoming months or years.

up 10.1%M E D I A N

Home Sale Price

SINGLE-FAMILY (Detached) 9.2% $264,900 in Third Quarter 2014 $242,000 in Third Quarter 2013

SINGLE-FAMILY (Attached) 18.9% $220,000 in Third Quarter 2014 $185,000 in Third Quarter 2013

CONDOMINIUM 9.4% $96,850 in Third Quarter 2014 $88,550 in Third Quarter 2013

2013

Single-Family (Detached) Single-Family (Attached) Condominium

2014 2013 2014 2013 2014

Perc

en

t of U

nits

So

ld

80%

70%

60%

50%

40%

30%

20%

10%

0%

� New � Regular Resale � Foreclosure � REO

Source: Metrostudy, 2015

Percent of Transaction by Unit TypesComparison of Third Quarters in 2013 and 2014

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.

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Increase in Median Sale PricesThe median sale prices for regular resale and Real Estate Owned (REO) of single-family units increased more than 10 percent with new median sale prices gaining 4.3 percent. The largest increases in median sale prices were for single-family attached units, with all three types of sales gaining above 12 percent. For condominiums, the largest increase in median sale prices of 12.4 percent occurred for regular resale.

Days on the Market

The average number of days on the market for all types of units declined in every month of the fourth quarter of 2014 compared to the fourth quarter of 2013. The reduced days on the market was most likely due to a decrease in supply.

Rent and Household Size

There 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 by a smaller margin of 0.06, from 2.83 to 2.89.

Ave

rag

e H

ou

seh

old

Siz

e (

in P

ers

on

s)

Me

dia

n G

ross

Re

nt

2005-2007

$1,0

52

$1,1

09

$1,1

40

$1,1

80

$1,2

41

$1,2

16

$1,1

09

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

$1,250

$1,200

$1,150

$1,100

$1,050

$1,000

$950

� Median Gross Rent � Owner-Occupied � Renter-Occupied

Source: U.S. Census Bureau, American Community Survey, 3-Year and 5-Year Estimates

Single-Family(Detached)Pe

rce

nt C

ha

ng

e in

Me

dia

n S

ale

s Pr

ice 16%

14%

12%

10%

8%

6%

4%

2%

0%

Single-Family(Attached)

Condominium

� New � Regular Resale � REO


Percent of Change in Median Sales Price by Transaction and Unit Type

Third Quarter 2013 to Third Quarter 2014

October

Ave

rag

e N

um

be

r o

f Da

ys

60

50

40

30

20

10

0November December

� 4th Quarter 2013 � 4th Quarter 2014


Days on Market Comparison

Recent Changes in Average Household Size and Rental Rates Prince George’s County

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Commercial Market Composition

The 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 nearest competitor, Fairfax County, which has 21,796,842 square feet.

VacanciesThe County experienced a 5 percent increase in vacancy rate for Class A Office. For Flex C space, the region as a whole showed a decline in vacancy while the County showed an increase. Among the other categories of commercial space, Industrial A declined the most for the region, and Flex B space for the County. 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 A, B, and C industrial space. All other categories of commercial space saw gains or losses at or under 50,000 square feet. Negative net absorption indicates that a larger volume of space was vacated than leased for the period.

Source, all graphs this page: CoStar, Accessed in January 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


IndustrialB

IndustrialC

6%

5%

4%

3%

2%

1%

0%

-1%

-2%

-3%

-4%

-5%

� County � Region

Change in Vacancy Rates: Comparing Prince George’s County and RegionFourth Quarter 2013 versus Fourth Quarter 2014

Squ

are

Fe

et


IndustrialB

IndustrialC

250,000

200,000

150,000

100,000

50,000

0

-50,000

� 2013 � 2014

Total Net AbsorbtionFourth Quarter 2013 versus Fourth Quarter 2014

COMMERCIAL MARKET

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Rental RatesThe overall 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. Office space was 40 percent lower, retail was 20 percent, industrial 13 percent, and flex 23 percent lower.

� County � RegionA

vera

ge

Re

nt P

er

Squ

are

Fo

ot


IndustrialB

IndustrialC

$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 FY2014 Budget

Second Quarter Sales and Use Tax Growth in Prince George’s County

Compared 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

-2.53%

4.71%

6.22%

-7.68%

Perc

en

t Ch

an

ge

PropertyTaxes

IncomeTaxes

OtherTaxes

Other Revenue

4%

6%

2%

0%

-2%

-4%

-6%

-8%

Source: Prince George’s County FY 2014 Budget

Percent Change in County General Revenues, FY 2012 to FY 2013

Source: CoStar, Accessed in January 2015

County RevenuesSALES AND USE TAXES2

Sales and use taxes collected during the second quarter of 2014 was $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 REVENUES

During Fiscal Years 2012 and 2013, the declines in revenue from property taxes and other sources were offset by reve-nues from income and other taxes.

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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

Endnotes1 http://mdhope.dhcd.maryland.gov2 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, and floor plans, and adequate systems 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.

prince george's pulse quarterly report - april 2015

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