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.
