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prince george’s

Contents

Pulse QUARTERLY REPORT

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

Third Quarter 2016 • Vol. 2, Issue 3

Employment Private Sector Employment Total Wages Average Wage Per Worker Business Establishments Real Estate............................................4 Housing Market Median Home Sales Price Housing Market Transactions Foreclosure Events Increase in Median Sale Prices Rents for Multifamily Units Multifamily Units Under Construction Commercial Market Volume of Industrial Space Vacancies Net Absorption (Space Leased) Rental Rates Changes in Rental Rates County Revenues.................................7 Changes in Revenues

Prince George’s County Population Estimates* First Quarter 2017 Estimated Demographics Total Population 922,435 Total Households 324,664 Median Household $79,469 Income Second Quarter 2017 Estimated Demographics Total Population 912,206 Total Households 320,784 Median Household $79,938 Income

Changes in Employment • From the third quarter of 2015 to the third quarter of 2016, the County gained 5,969 private sector jobs. Professional and Technical Services, Construction, Accommodation and Food Services, and Health Care and Social Assistance, saw the largest increases in employment. More than 69 percent of the total increase in employment in the County occurred in these four sectors. • Two other sectors also recorded significant gains in employment during the period—Wholesale Trade and Retail Trade. Together, the two sectors added 1,157 jobs, representing 19 percent of the total increase in the County. • The Other Services, except Public Administration sector, recorded the largest loss of employment in the County between the third quarter of 2015 and the third quarter of 2016. The 476 job losses accounted for 54 percent of the County’s total job losses. • The Arts, Entertainment, and Recreation sector also recorded a significant loss in employment during the period—195 jobs representing 22 percent of the total losses in the County.

Top Ten Changes in Employment Third Quarter 2015 to Third Quarter 2016 1,158 1,051

987

939 632

525 394

333

301

-476

Source: Neustar, Inc. 2017.

* The change in population and households is the result of a change in estimation methodology and revised Census Bureau estimates.

M-NCPPC Prince George’s County Planning Department

Source: United States Department of Labor Bureau of Labor Statistics.


Employment and Wages Third Quarter Average Employment

EMPLOYMENT There was a significant increase in the quarterly average employment (7,849 or 2.6 percent) between the third quarter of 2015 and the third quarter of 2016. Increases occurred in all three sectors. The government sector reported an increase of 2,178 jobs, private goods sector 1,387, and private service sector led the way with 4,284. PRIVATE SECTOR EMPLOYMENT Most of the increase in private sector employment (4,284 or 76 percent) occurred in the service sector. The remaining 24 percent occured in the private goods sector. TOTAL WAGES Overall, total wages in the County during the third quarter of 2016 were $4,520.0 million, which was 7.6 percent higher than the third quarter of 2015. The government sector experienced an increase of $74.9 million, representing 4.7 percent increase in total wages. The private service sector, saw an increase of $191.4 million (9.2 percent). Total wages in the private goods sector also showed strong growth increasing by $52.9 million (10 percent). AVERAGE WAGE PER WORKER Overall, the average weekly wage per worker in the County increased by 4.5 percent from the third quarter of 2015 to the third quarter of 2016. The largest increase of $69 occurred in the private goods sector industries followed closely by an increase of $58 in the private service sector. The government sector saw the average weekly wage increase by $30 during the period.

89,121

85,541

87,719 34,286

33,270

32,899

3rd Quarter 2015 Government Sector

2nd Quarter 2016 Private Sector Goods

Third Quarter Total Wages (in millions) $2,264.5 $2,125.7 $2,073.1

Private Sector - Service

$580.3 $524.5 $527.4

Private Sector - Goods

$1,675.4 $1,478.0 $1,600.5

Government Sector 3rd Quarter 2016

2nd Quarter 2016

3rd Quarter 2015 Source: Maryland DLLR.

Third Quarter 2016 Average Weekly Wage per Worker $1,469 $1,267

$1,233 $853

3rd Quarter 2015

2

3rd Quarter 2016 Private Sector Service Source: Maryland DLLR.

$1,439

4.5%

191,187

188,766

186,903

Government Sector

$1,302

$1,213

$911

$866

2nd Quarter 2016 Private Sector Goods

3rd Quarter 2016 Private Sector Service

Source: United States Department of Labor, Bureau of Labor Statistics.


BUSINESS ESTABLISHMENTS Between the third quarter of 2015 and the third quarter of 2016, there were increases in business establishments in some sectors and slight decreases in others. The highest increases occurred in Construction with 43 establishments, followed by Retail Trade with 39 establishments. Three other sectors recorded small increases—Wholesale Trade (14), Accommodation and Food Services (11), and Health Care and Social Assistance (11). The highest losses of establishments occurred in Professional and Technical Services (-39) and Educational Services (-11).

Top Ten Changes in Establishments Third Quarter 2015 to Third Quarter 2016 43 39

14

11

11

9

9

-9

-11

-39 Source: United States Department of Labor Bureau of Labor Statistics.

Percent Change in Labor Force, Employed, and Unemployed Third Quarter 2015 to Third Quarter 2016 5%

Percent Change

0% Labor Force

Employed

Unemployed

-5% -10% -15% -20% County

Maryland Source: United States Department of Labor, Bureau of Labor Statistics.

From the third quarter of 2015 to the third quarter of 2016, the County’s labor force grew by 4,641 (0.94 percent) to 496,674 people. The percent of employed residents in the County also grew faster than the state at 1.94 percent versus 1.33 percent. The number of employed persons grew by 9,044 from 465,547 in the third quarter of 2015 to 474,591 in the third quarter of 2016. Both the County and the state saw significant declines in the number of unemployed persons. The number of unemployed persons in the County declined by 4,402 persons from 26,486 to 22,084 during the period. 3


Real Estate Change in Median Sales Price by Unit Type $300,000

HOUSING MARKET

Median Home Sales Price The median sales price for all homes sold during the third quarter of 2016 in Prince George’s County was $263,000, reflecting a 7.3 percent increase over the median sales price of $245,000 during the third quarter of 2015. Condominium units saw the largest increase in price at 14.3 percent, followed by single-family detached 7.4 percent and single family attached units 4.4 percent.

Median Sales Price

$250,000

$200,000

$150,000

$100,000

$50,000

Housing Market Transactions

Foreclosure Events The total of foreclosure events declined from the previous year’s third quarter. The number of events in the third quarter of 2016 was 1,839, 569 fewer than the 2,408 recorded in the third quarter of 2015. Notice of Default and Notices of Sales declined 24.2 percent and 29.4 percent respectively from the third quarter of 2015 to the third quarter of 2016, and lender purchases (REO) decreased by 15.6 percent from 700 to 519.

$0 Single-Family Single-Family Condominium Detached Attached 3rd Quarter 2015

3rd Quarter 2016

Number of Units Sold by Type 2500 2000 1500 1000 500 0 Single Family Detached

Single Family Attached

3rd Quarter 2015

Quarterly Foreclosure Events in Prince George’s County

All Units

Source: Metrostudy, www.metrostudy.com.

Number of Units Sold

The total number of all units sold decreased from 3,416 units in the third quarter of 2015 to 3,175 units in the third quarter of 2016. The decrease was due to fewer foreclosure sales and REO sales. Foreclosure sales decreased over the period from 491 to 284 units and their percentage of all transactions declined from 14.4 percent to 8.9 percent. REO sales decreased from 700 in the third quarter of 2015 to 591 for the third quarter of 2016 (15.6 percent). New unit sales declined from 295 in the third quarter of 2015 to 269 in the third quarter of 2016. Regular resales jumped from 1,930 units for the third quarter of 2015 to 2,031 units in the third quarter of 2016 (5.2 percent).

Condominium

3rd Quarter 2016

Source: Metrostudy, www.metrostudy.com. 3,000

23.0%

22.1%

22.2% 2,500

22.0%

2,742

2,000

20.1% 1,500 1,000

2,415

2,293

2,408

20.7%

2,741

20.0%

20.1%

19.5%

2,182

19.0%

1,839

500

19.0% 18.0%

-

17.0% 1st Quarter 2015

2nd Quarter 2015

3rd Quarter 2015

Total Foreclosure Events

4

21.0%

4th Quarter 2015

1st Quarter 2016

2nd Quarter 2016

County Share of State Total

3rd Quarter 2016

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.


Increase in Median Sale Prices The median sale prices for new and regular resale of single-family detached units increased by 6.0 percent and 6.4 percent respectively. The largest increase in median sale price (20.2 percent) occurred for regular resale condominium sales. Single-family attached median sales price for new units saw an increase of 2.9 percent and regular resales jumped 5.7 percent. The smallest increase in median sales price (1.9 percent) was for REO single-family detached units.

Median Sales Price Percent Change by Median SalesTransaction Price Percent and Change byType Transaction Unit from and Unit Type from Third Quarter 2015 to Third Quarter 2016

Third Quarter 2015 to Third Quarter 2016

25.0% 20.0% 15.0% 10.0% 5.0%

Rents for Multifamily Units The average asking rent for multifamily units increased by $37 (2.9 percent) between the third quarter of 2015 and the third quarter of 2016. The County offers some of the more affordable rents in the region with average rents for a studio apartment $339 less than the region. The average rent in the County was $322 less than the region for a onebedroom apartment, $324 less for a two-bedroom, and $311 less for a three-bedroom apartment.

Multifamily Units Under Construction The number of multifamily units under construction in the County decreased from 2,012 units in the third quarter of 2015 to 200 units in the third quarter of 2016. Deliveries jumped significantly from 736 in the third quarter of 2015 to 955 in the third quarter of 2016.

0.0% Single-Family Detached

Single-Family Attached

Condominium

Regular Resale

New

REO Source: Metrostudy, www.metrostudy.com.

Asking Rent Per Unit

Asking Rent Per Unit

$1,320 $1,310 $1,300 $1,290 $1,280

$1,305

$1,312

$1,270 $1,260

$1,275

$1,250 3rd Quarter 2015

2nd Quarter 2016

3rd Quarter 2016 Source: CoStar.

Multifamily Units Under Construction and Delivered

Multifamily Units Under Construction and Delivered

2,500 2,000

2,012

1,500 1,155 1,000 500

736

857

955 200

0 3rd Quarter 2015

2nd Quarter 2016

Multifamily Units Under Construction

3rd Quarter 2016 Units Delivered Source: CoStar.

5


Real Estate COMMERCIAL MARKET

Percent of Region’s Commercial Real Estate in Percent of Region's Commercial Real Estate in Prince George’s County, Third Quarter 2016 Prince George's County, Third Quarter 2016

Volume of Industrial Space

35%

32.6%

31.7% 27.9%

30%

Percent of RBA

The County is a regional leader in terms of the volume of industrial space of all classes. The existing rentable building area (RBA) of industrial space of all classes during the third quarter of 2016 (51,021,059 square feet) represented 30.5 percent of the total for the Washington D.C. metropolitan region. The County added 764,842 square feet of industrial space from the third quarter of 2015 to the third quarter of 2016.

25% 20%

15.1%

15% 10% 5%

13.7% 14.0%

11.7% 7.0%

4.7%

3.5%

0%

Vacancies

The vacancy rate for Class A Flex and Class C Flex space in the County decreased significantly by 8.2 percent and 3.3 percent respectively during the period. Even though the vacancy rate for Class A Industrial space increased by 0.2 percent in the County during the period, the increase for the region as a whole was greater at 2.1 percent.

Source: CoStar.

Changein inVacancy Vacancy Rates Change Rates Third Quarter 2015 versus Third Quarter 2016 Third Quarter 2015 versus Third Quarter 2016 Percent Change in Vacancy Rate

There was a slight decline in the Class A Office market conditions in the County, but also an improvement for Class B. The vacancy rate for Class A Office increased by 1.6 percent while that for Class B decreased by 1.6 percent. At the same time, the vacancy rate for Class A in the region increased by 0.3 percent while Class B Office space declined by 0.3 percent.

4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0%

The County experienced a decrease in vacancies for Class B Industrial (2.6 percent), Class B Flex (1.4 percent) and Class C Industrial space (0.1 percent). A decline in vacancies is a positive development.

County

Region Source: CoStar.

Net Absorption Total Net Absorption Third Quarter 2015 Total Net Absorption Third Quarter 2015 Versus Third2016 Quarter 2016 Versus Third Quarter 350,000 300,000 250,000

Square Feet

Net absorption is the amount of space occupied at the end of a period minus the amount occupied at the beginning of that period, that is, the space vacated during the period. For the third quarter of 2016, Class A and B Industrial, and Retail, experienced total net absorption of more than 100,000 square feet. Class A Industrial led with 309,807 square feet absorbed in the third quarter of 2016. The only segment to experience negative absorption for the third quarter in 2016 was Class B Office with negative net absorption of 8,862 square feet. Negative net absorption indicates that a larger volume of space was vacated than leased for the period.

200,000 150,000 100,000 50,000 0 -50,000 -100,000

2015

2016 Source: CoStar.

6


Rental Rates

Class A and B Office space experienced increases in rents from the third quarter of 2015 to the third quarter of 2016 of 5.4 and 1.9 percent respectively. Class C Office space saw the largest decrease, 5.4 percent. For the same period Retail jumped 2.9 percent and all classes of Industrial space saw significant increases with Class A Industrial space leading the way with an increase of 9.4 percent. Rental rates for Flex were mixed with Class B and Class C space gaining 3.6 and 14.4 percent, respectively, while Class A Flex space rental rates declined by 3.0 percent.

$45.00

45.0%

$40.00

40.0%

$35.00

35.0%

$30.00

30.0%

$25.00

25.0%

$20.00

20.0%

$15.00

15.0%

$10.00

10.0%

$5.00

5.0%

$0.00

0.0%

County

Region

Percent Difference Region/County

Changes in Rental Rates

Average Rent Per Square Foot

During the third quarter of 2016, the average rent per square foot for all types of commercial space was lower in the County than the region. The rental rates for Office space was 31.3 percent lower than the region, Retail was 19.2 percent lower, Industrial was 10.0 percent lower, and Flex was 20.6 percent lower than the region.

Rental Rate Rate Comparison Comparison Prince George’s Rental George's County County Versus Quarter2016 2016 VersusWashington WashingtonRegion RegionThird 3rd Quarter

% Difference

Source: CoStar.

Prince George’s County Percent Change in Rental Prince George's County Percent Change in Rental Rates Third Quarter 2015 Verses Third Quarter 2016 Rates Third Quarter 2015 Verses Third Quarter 2016

Percent Change

20% 15% 10% 5% 0% -5%

County Revenues

Change in County Source Revenues FY 2014 Actual to FY 2015 Actual 34.3%

CHANGES IN REVENUES There was an overall increase in local taxes from $1.44 billion in FY 2014 to $1.51 billion in FY 2015, reflecting a 4.8 percent increase. The two dominant sources of local taxes—property taxes and income taxes—accounted for 84.0 percent of all local taxes in FY 2015. By far, property taxes have been the leading source of revenues in the County, generating $705.1 million in FY 2014, and $720.9 million in FY 2015. From FY 2014 to FY 2015, there were increases in all four revenue sources. The most noticeable expansion came from Other Revenues (34.3 percent), followed by Other Taxes (9.7 percent), Income Taxes (6.1 percent) and Property Taxes (2.2 percent).

2.2% Property Taxes

9.7%

6.1%

Income Taxes

Other Taxes

Other Revenues

Source: Prince George’s County FY 2017 Budget.

7


Endnotes 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.

The Maryland-National Capital Park and Planning Commission Prince George’s County Planning Department, Countywide Planning Division 14741 Governor Oden Bowie Drive Upper Marlboro, MD 20772 www.pgplanning.org | 301-952-3650 | TTY: 301-952-4366

Prince George's Pulse Quarterly Report 3rd QTR 2016 Vol 2. Issue 3  

Prince George's Pulse Quarterly Report 3rd QTR 2016 Vol 2. Issue 3  

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