1

PulsePulseprince george’s

M-NCPPC Prince George’s County Planning Department OCTOBER 2015 • Vol. 1, Issue 3

CONTENTS

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

Total EmploymentFourth Quarter EmploymentTotal WagesAverage Wage Per WorkerBusiness EstablishmentsEmployment

Real Estate ...................................... 4Housing Market

Median Home Sales PriceHousing Market TransactionsForeclosure EventsIncrease in Median Sale PricesDays on the MarketMultifamily RentsMultifamily Units Under Construction

Commercial MarketCommercial Market CompositionVacanciesNet Absorption (Space Leased)Rental Rates

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

Sales and Use TaxesChanges in Revenues

• Transportation and Warehousing, Retail Trade, and Healthcare and Social Assistance saw the largest increases in employment between the fourth quarters of 2013 and 2014. More than 62 percent of the total increase in employment in the County occurred in these three sectors.

• Two other sectors also recorded significant gains in employment during the period—Arts, Entertainment, and Recreation and Accommodation and Food Services. Together, the two sectors added 1,069 jobs, representing 19 percent of the total increase in the County.

• The Finance and Insurance sectors recorded the highest loss of employment in the County between the fourth quarter of 2013 and the fourth quarter of 2014. The 689 job losses accounted for 50 percent of the County’s total.

• Information and Wholesale also recorded significant losses in employment during the period—294 and 189 jobs respectively—representing 21 percent and 14 percent of the total losses in the County.

1,269 1,2531,034

543 526

-689

-294-189 -113 -44

Leading Employment Gain and Loss Sectors4th Quarter 2013 to 4th Quarter 2014

Transportation and WarehousingRetail TradeHealthcare and Social AssistanceArts, Entertainment, and Recreation

Accommodation and Food ServicesFinance and InsuranceInformationWholesale Trade

Professional and Technical ServicesAgriculture, Forestry, Fishing and Hunting

1,269 1,2531,034

543 526

-689

-294-189 -113 -44

Leading Employment Gain and Loss Sectors4th Quarter 2013 to 4th Quarter 2014

Transportation and WarehousingRetail TradeHealthcare and Social AssistanceArts, Entertainment, and Recreation

Accommodation and Food ServicesFinance and InsuranceInformationWholesale Trade

Professional and Technical ServicesAgriculture, Forestry, Fishing and Hunting

1,269 1,2531,034

543 526

-689

-294-189 -113 -44

Leading Employment Gain and Loss Sectors4th Quarter 2013 to 4th Quarter 2014

Transportation and WarehousingRetail TradeHealthcare and Social AssistanceArts, Entertainment, and Recreation

Accommodation and Food ServicesFinance and InsuranceInformationWholesale Trade

Professional and Technical ServicesAgriculture, Forestry, Fishing and Hunting

1,269 1,2531,034

543 526

-689

-294-189 -113 -44

Leading Employment Gain and Loss Sectors4th Quarter 2013 to 4th Quarter 2014

Transportation and WarehousingRetail TradeHealthcare and Social AssistanceArts, Entertainment, and Recreation

Accommodation and Food ServicesFinance and InsuranceInformationWholesale Trade

Professional and Technical ServicesAgriculture, Forestry, Fishing and Hunting

Changes in Employment

2

89,616 84,503 88,781

31,892 32,022 31,362

187,205 186,701 183,296

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

4th Quarter 2014 3rd Quarter 2014 4th Quarter 2013

4th Quarter Average Employment

Government Sector Private Sector Goods Private Sector Service

$1,365.8

$501.0

$2,063.1

$1,558.3

$508.7

$2,007.5

$1,478.0

$545.3

$2,197.6

$0.0 $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0

Government Sector

Private Sector—Goods

Private Sector—Service

(in millions)

3rd Quarter Total Wages

4th Quarter 2014 3rd Quarter 2014 4th Quarter 2013

$1,269

$1,418

$1,183$1,315

$1,222 $1,229

$903$827 $866

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

4th Quarter 2014 3rd Quarter 2014 4th Quarter 2013

Average Weekly Wage per Worker

Government Sector Private Sector Goods Private Sector Service

Employment and Wages

TOTAL EMPLOYMENTQuarterly average employment increased by nearly 5,300 between fourth quarters of 2013 and 2014. Nearly 85 percent of the employment gains were in private sector. There were modest increases in average wages as well.

FOURTH QUARTER EMPLOYMENTDuring the fourth quarters of 2013 and 2014, nearly 61 percent of workers were employed in private sector service industries while the remaining were employed in public sector and private sector goods production. Also during the period, the public sector added 835 jobs. In addition, there were 4,439 job gains in the private sector led by 3,909 service- and 530 goods-producing jobs.

TOTAL WAGESBetween the fourth quarters of 2013 and 2014, total wages increased overall in the three employment areas. The largest increase in total wages ($134.5 million) occurred in the private service sector, representing 6.5 percent, followed by $112.2 million in public sector, representing 8.2 percent. Total wages in private sector goods industries increased by $44.3 million or 8.8 percent.

AVERAGE WAGE PER WORKEROverall, the average weekly wage per worker in the County increased from the fourth quarter of 2013 to the fourth quarter of 2014. The largest increase of $86 occurred for workers in the private sector goods industries and the government sector, representing 7.0 percent and 7.3 percent, respectively. There was a modest $37 (4.3 percent) increase in the average weekly wage of private sector service workers during the period.

5,300 Jobs

1,162

3

51

118

6 5

-22 -14 -11 -11 -9

Top Ten Changes in Establishments 4th Quarters 2013 and 2014

Healthcare and Social A

ssista

nce

Arts, E

ntertainment, a

nd Recreation

Transporta

tion and W

arehousing

Utilitie

s

Management of C

ompanies and Enterp

rises

Retail Trade

Constructio

n

Finance and Insu

rance

Accommodation and Food Serv

ices

Educational S

ervices

1,253 1,269

1,034

543 526

-689 -294 -189 -113 -44

Top Ten Changes in Employment 4th Quarter 2013 to 4th Quarter 2014

Retail Trade

Transporta

tion and W

arehousing

Healthcare and Social A

ssista

nce

Arts, E

ntertainment, a

nd Recreation

Accommodation and Food Serv

ices

Finance and Insu

rance

Inform

ation

Wholesale Trade

Professi

onal and Technical S

ervices

Agraiculture, F

orestry, F

ishing, a

nd...

BUSINESS ESTABLISHMENTSBetween the fourth quarters of 2013 and 2014, the highest gains in business establishments (51) occurred in the healthcare and social assistance sector. Four other sectors recorded modest gains in establishments: Entertainment and Recreation (11), Transportation and Warehousing (8), Utilities (6), and Management of Companies (5). The most losses of establishments ocurred in Retail Trade (-22), Construction (-14), Finance and Insurance (-11), Accommodation and Food Services (-11), and Educational Services (-9).

EMPLOYMENTBetween the fourth quarters of 2013 and 2014, the highest increases in employment occurred in Transportation and Warehousing (1,269); Retail Trade (1,253); Healthcare and Social Assistance (1,034); Art, Entertainment and Recreation (543); and Accommodation and Food Services (526). The highest losses of employment were in Finance and Insurance (-689); Information (-294); Wholesale Trade (-189); Professional and Technical Services (-113); and Agriculture, Forestry, Fishing, and Hunting (-44).

4

Real Estate

HOUSING MARKETMedian Home Sales PriceThe median sales price for all homes sold during the second quarter of 2015 in Prince George’s County was $246,000, reflecting a 4.7 percent increase over the median sales price of $235,000 during the second quarter of 2014. The largest percentage increase in price was for condominium units at 22.6 percent.

Housing Market TransactionsThe total number of all units sold dropped from 3,229 units in the second quarter of 2014 to 2,241 units in the second quarter of 2015. The decline was mostly due to a reduced number of foreclosure sales. Foreclosure sales made up 21.4 percent of all single-family detached unit sales in the second quarter of 2014, but only 2.2 percent in the second quarter of 2015. Similarly, foreclosure sales for single-family attached units declined from 22.0 percent of all sales to 7.5 percent, while foreclosure sales of condominiums dropped from 34.5 percent to 2.6 percent.

Foreclosure EventsRecently, there has been a modest decline in foreclosure events. Records of the most recent three quarters show a clear reduction in the number of foreclosure events—from 2,852 in the fourth quarter of 2014 to 2,293 in the second quarter of 2015. The number of foreclosure events during the second quarter of 2015 was slightly higher than the second quarter of 2014. However, the County’s share of the total events in the State slightly declined by 1.1 percentage points during the period, from 20.1 percent to 19.0 percent.

up 4.7%M E D I A N

Home Sale Price

0

500

1000

1500

2000

2500

3000

3500

Single Family Single FamilyAttached

Condominium Total

Num

ber o

f Uni

ts S

old

Number of Units Sold by Type 2nd Quarter Comparison

2nd Quarter 2014 2nd Quarter 2015

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Single Family Single FamilyAttached

Condominium

Perc

ent o

f Uni

ts S

old

Percent of Units Sold by Type

2nd Quarter 2014 2nd Quarter 2015

3,350

2,278 2,684 2,852

2,415 2,293

26.6%

20.1%

23.1%20.4%

20.1%19.0%

0%

5%

10%

15%

20%

25%

30%

-

500

1,000

1,500

2,000

2,500

3,000

1st Quarter2014

2nd Quarter2014

3rd Quarter2014

4th Quarter2014

1st Quarter2015

2nd Quarter2015

Quarterly Foreclosure Events in Prince George's County

Total Foreclosure Events Share of State Total

5

1285

1290

1295

1300

1305

1310

1315

2nd Quarter 2014 1st Quarter 2015 2nd Quarter 2015

Asking Rent Per Unit

Increase in Median Sale PricesThe median sale prices for new and regular resale of single-family units increased 7 percent and 4.2 percent, respectively, while Real Estate Owned (REO) prices increased 4.3 percent. The largest increases in median sale prices were for condominiums, with new and regular resale sales gaining above 20 percent. For single-family attached units, the largest increase in median sale prices of 18.4 percent occurred for REO sales.

0

500

1000

1500

2000

2500

3000

3500

2nd Quarter 2014 1st Quarter 2015 2nd Quarter 2015

Multifamily Units Under Construction

7.0%

9.0%

23.8

%

4.2%

10.8

%

20.7

%

4.3%

18.4

%

6.4%

Single Family Single FamilyAttached

Condominium

Median Sales Price Percent Change by Transaction and Unit Type 2nd Quarter 2014 to 2nd Quarter 2015

New Regular Resale REO

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.

Days on the MarketThe average number of days on the market for all types of units decreased in the last two months of the second quarter 2015 compared to the second quarter of 2014.

Multifamily RentsThe average multifamily asking rent per unit increased by $14 or 1.3 percent from the second quarter of 2014 to the second quarter of 2015. The County still offers some of the more affordable rents in the region with average rents $378 less than the region for a studio, $310 less for a one-bedroom, $298 less for a two-bedroom, and $191 less for a three-bedroom.

Multifamily Units Under ConstructionThe number of multifamily units under construction in the County increased significantly from 2,507 units in the second quarter of 2014 to 3,316 units in the second quarter of 2015.

6

-3%

-1%

1%

3%

5%

7%

9%

11%

Office A Office B Office C Retail IndustrialA

IndustrialB

IndustrialC

Flex A Flex B Flex C

Perc

ent C

hang

e In

Vac

ancy

Rat

e

Change In Vacancy Rates 2nd Quarter 2014 Versus 2nd Quarter 2015

County Region

-250000

-150000

-50000

50000

150000

250000

350000

Squa

re F

eet

Total Net Absorption 2nd Quarter 2014 Versus 2nd Quarter 2015

2014

2015

COMMERCIAL MARKET

VacanciesThere was a very slight improvement in the Class A Office market in the County, but also a slight deterioration for Class B. (0.4 percent). The vacancy rate for Class A Office reduced by 0.4 percent, while Class B increased by 0.6 percent in the County. Meanwhile, the region experienced increases of 0.1 percent and 0.6 percent for both Class A and B Office, respectively. For the County, Class A Flex space saw the largest increase in vacancy of 11.8 percent. Among the other categories of commercial space, Class A Industrial vacancy rate increased by 1.9 percent in the County but decreased in the region by 2.2 percent. The County experienced its largest decreases in vacancy for Class B Industrial and Flex with declines of 2.7 percent and 2.4 percent, repectively. A negative percentage indicates a decline in the vacancy rate. (Office classification descriptions can be found under Endnotes.)

Net Absorption (Space Leased)Net absorption is equal to the amount occupied at the end of a period minus the amount occupied at the beginning of a period and takes into consideration space vacated during the period. For the second quarter of 2015, leaders in total net absorption include Class A and B Industrial space. Only Retail and Class C Office experienced negative net absorption in the second quarter of 2015. Negative net absorption indicates that a larger volume of space was vacated than leased for the period.

0%

5%

10%

15%

20%

25%

30%

35%

Perc

ent o

f RBA

Percent of Region's Commercial Real Estate In Prince George's County

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.

7

Rental RatesFor the second quarter of 2015, 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

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.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

Aver

age

Rent

Per

Squ

are

Foot

Rental Rate Comparision Prince George's County Versus Washington Region

2nd Quarter 2015

County

Region

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

Compared to the State—2013/2014

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

Sales and Use Tax ComparisonSecond Quarters 2013 and 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

Change in General RevenuesFY 2013 to FY 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

8

�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.