Previously I gave you the Executive Summary of the Tabb Report. We now move on to market overviews as presented by Mike Neal of Colliers International and Michael Tabb of Red Rock Global Real Estate Services Company.
I added emphasis in bold text to a few important lines in the study.
"Economic Market Overview
According to the 2011 State of the City report prepared for the Greensboro partnership in January 2011, “Greensboro appears to have weathered the fiscal storm more effectively than other North Carolina cities.” Although the City continues to lose manufacturing jobs as the City’s industrial base declines, research, education, transportation and health care remain strong employers with positive job growth and wage increase. Overall wages experienced a slight increase (2.4%) and the population grew for both the City (14.4%) and the East Greensboro study area (4.6%).
While most of the economic indicators point to Greensboro’s ability to manage through the Country’s economic crisis, three areas remain critical areas of focus: 1) the City’s increased poverty rate, 2) the decline in home values and the growing shift from home ownership to rental, and finally 3) the continued effort to improve the performance of the Greensboro’s public schools. Nowhere in the City are these three areas more important than in East Greensboro. East Greensboro has experienced a considerably sharper economic decline than any other part of the City.
• The highest population density
• Lowest projected population growth (1.6%)
• Highest poverty rates
• Median HH Incomes of $21,617 versus $42,927
• Largest decrease in home ownership
• Lowest residential rental rates
• 11 of 16 public schools are in the process of working to improve their overall performance
Real Estate Market Overview
As a general statement, Greensboro is over supplied across all sectors of the real estate market. Office, industrial, retail and residential are seeing limited new inventory being introduced while vacancies remain above their historic average high. Nevertheless, rents remain stable, and in the case of office, are increasing
slightly.
Office Market Overview
The Guildford County office market has managed to keep a very consistent quoted office rate in the mid to low $14 range. Since 4th quarter 2010, rents have increased to levels approaching their 2008/2009 peak. Vacancy rates, however, have grown steadily each of the past 10 quarters and remain above 14.5%. Given the size of the office market, this high vacancy translates into approximately 500,000 square feet of unoccupied space in the market, or 35 buildings based upon the market’s average building size of 14,660 square feet. Although office rates appear to be improving, the high vacancy rates will continue to hold back new construction. The Study Area does not include a significant Class A office inventory. Most office space within the Study Area is Class B and C, and is supportive of small business or institutional users.
Industrial Market Overview
The Industrial market in Greensboro has experienced a steady and relatively large (10%) decrease in quoted rental rates since 2007. Vacancy rates have not been a major factor, in part due to a major drop in new and planned construction. In fact, through the first three quarters of 2011, the region is set to have over 1,039,438
square feet of positive net absorption.
The Study Area has a large amount of industrial space available on most major corridors to the south and east. As Greensboro grows and develops new communities off of I - 40/85 and NC - 70, some industrial areas inside the loop will be redeveloped and repositioned. For the purposes of this study, industrial corridors were viewed as positive employment centers and real estate opportunities areas.
Residential Market Overview
Avg Listing Price $236,776 Avg Sale Price $122,000
Average price per square foot for Greensboro NC was $82, a decrease of 2.4% compared to the same period last year. The median sales price for homes in Greensboro for Aug 11 to Oct 11 was $122,000 based on 209 home sales. Compared to the same period one year ago, the median home sales price decreased 1.6%, or $2,000, and the number of home sales decreased 69.6%. There are currently 2,228 resale and new homes in Greensboro on Trulia, including 9 open houses, as well as 653 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Greensboro was $236,776 for the week ending Nov 23, which represents an increase of 3.7%, or $8,424, compared to the prior week. Popular neighborhoods in Greensboro include Old Irving Park and Adams Farm, with average listing prices of $537,684 and $175,327.
Home prices in the Study Area varied greatly from below $50,000 to the mid/high $100’s. In general, East Greensboro’s homes are priced lower than other submarkets, and are older and smaller. The number of new home communities is generally limited to the outer edges of the Study Area and a few redeveloped housing projects such as Willow Oaks.
One of the most difficult challenges the area faces is the large inventory of low and extremely low income housing. These communities of older housing stock have below market rents and offer a mixture of quality levels ranging from the poorly-kept, unsafe renter housing to high quality, market leading Hope VI communities.
In order to see new multi-family housing successfully developed by market rate developers, pricing must increase and housing quality levels must improve across the entire Study Area."
As you can see, the problems faced by Uptown Greensboro and the rest of East Greensboro are daunting.
