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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)
Source: Maryland Department of Labor, Licensing and Regulation, 2015, www.dllr.state.md.us
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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%
Source: Maryland Department of Labor, Licensing and Regulation, 2015, www.dllr.state.md.us
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
n 2nd Quarter 2013 n 2nd Quarter 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
n 2nd Quarter 2013 n 2nd Quarter 2014
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
Source: Metrostudy, 2015
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
Source: Metrostudy, 2015
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
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
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
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
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
Of�ce A Of�ce B Of�ce C Retail Flex A Flex B Flex CIndustrialA
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.