COMPREHENSIVE HOUSING MARKET ANALYSIS Salisbury, -

U.S. Department of Housing and Urban Development Office of Policy Development and Research As of October 1, 2017

Summary

Economy Rental Market Housing Market Area The economy of the Salisbury HMA The rental housing market in the has been improving since 2012, after HMA is balanced, with an estimated contracting by an average of 1,800 vacancy rate of 5.2 percent for year- jobs, or 1.2 percent, a year from 2008 round rental housing (estimates by the through 2011. During the 12 months analyst). The vacancy has declined Kent Caroline ending September 2017, nonfarm significantly from an estimated 9.0 Talbot pay­rolls increased by 2,300 jobs, or percent in 2010, in part, because of Sussex 1.5 percent, from a year earlier, to an limited production of year-round rental average of 158,400 jobs. The unem- units. During the forecast period, Dorchester Delaware Maryland Wicomico ployment rate declined 0.2 percentage demand is estimated for 1,625 new point to 5.5 percent during the same market-rate rental units. The 400 units Worcester Somerset time and is down from a high of 9.8 currently under construction and 50 percent in 2010. During the next units in planning will satisfy a majority Atlantic Ocean 3 years, nonfarm payrolls are expected of the demand in the first year of the

Chesapeake Bay Bay Accomack to increase an average of 1.5 percent forecast. The Salisbury Housing Market Area annually. (HMA), coterminous with the Salisbury, Table 1. Housing Demand in the MD-DE Metropolitan Statistical Area, Sales Market Salisbury HMA During the Forecast Period is in and Delaware The sales housing market in the and is part of the known as the Salisbury HMA HMA is currently balanced, with an Delmarva Peninsula that also includes Sales Rental estimated vacancy rate of 2.2 percent, Units Units the Eastern Shore of Virginia. The down from 4.1 percent in 2010. New Total demand 6,425 1,625 HMA includes the of Somerset, and existing home sales increased by Under construction 600 400 Wicomico, and Worcester in Maryland 870 homes, or 8 percent, to 11,800 Notes: Total demand represents estimated and Sussex in Delaware. The HMA is a production necessary to achieve a balanced homes sold during the 12 months popular tourist and retirement destination market at the end of the forecast period. ending May 2017 (CoreLogic, Inc., Units under construction as of October 1, due to its beaches and golf courses and its 2017. A portion of the estimated 83,000 with adjustments by the analyst). The other vacant units in the HMA will likely proximity to the , , average sales price of a home in- satisfy some of the forecast demand. Sales and Washington, D.C. metropolitan areas. demand includes an estimated demand for creased nearly 5 percent to $272,200. 100 mobile homes. The forecast period is During the 3-year forecast period, October 1, 2017, to October 1, 2020. Source: Estimates by analyst Market Details demand is estimated for 6,425 new Economic Conditions...... 2 homes (Table 1). The 600 homes currently under construction will Population and Households...... 6 satisfy some of the demand. Housing Market Trends...... 7 Data Profile...... 12 Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 2 Table 2. Source: U.S.BureauofLaborStatistics averages throughSeptember2016and2017. Notes: Numbersmaynotaddtototalsbecauseofrounding.Based on12-month Sources: Note: Excludeslocal schooldistricts. Table 3. Total nonfarmpayroll jobs Sysco Eastern Maryland,LLC Sysco Eastern Atlantic General Hospital ShoreUniversity ofMarylandEastern The HarrisonGroup, Inc. Wal-mart Stores, Inc. Peninsula RegionalMedicalCenter Bayhealth Mountaire Farms Perdue Goods-producing sectors Service-providing sectors Mining, logging,&construction Government Other services Leisure &hospitality Education &healthservices Professional &businessservices Financial activities Information Transportation &utilities Wholesale &retail trade Manufacturing Economic Conditions Newark Post 12-MonthAverage NonfarmPayroll Jobsinthe

Name ofEmployer HMA, Major Employersinthe bySector “TheDelaware 25;”Maryland Department ofCommerce September Salisbury 134,200 156,100 23,800 27,100 25,100 12,700 27,400 13,800 21,900 2016 12 MonthsEnding Wholesale &retail trade Education &health services Education &healthservices Leisure &hospitality Education &healthservices Wholesale &retail trade Education &healthservices Education &healthservices Manufacturing Manufacturing 6,100 6,600 1,200 4,200 8,100 or 1.7percent,annually. Duringthe payroll growth averaging 2,500jobs, improved since2012,withnonfarm theHMAhassteadily economy of ingly popularamongretirees. The munities, have madetheHMAincreas com numerous marinasandgolf 2017). Thebeaches, alongwiththe Ocean City, Maryland; The Daily Times Update Comprehensive Plan: Town of million visitorsayear combined( drawingMaryland, morethan16 Beach, Delaware, andOceanCity, with beachtowns suchasRehoboth a populardestinationamongtourists, T 12 months ending September 2017, 12 monthsendingSeptember Nonfarm Payroll Sector HMA southern Delmarva Peninsula is DelmarvaPeninsulais southern HMAonthe he Salisbury September 136,000 158,400 23,800 27,600 25,000 13,600 27,600 14,000 22,400 2017 6,300 6,900 1,200 4,200 8,400 Absolute Change 1,800 2,300 – 100 Salisbury 200 500 900 300 200 200 300 500 0 0 0 Employees Number of 1,000 1,100 1,800 2,900 2,900 3,000 2,000+ 4,000+ Change Percent 700 800 – 0.4

0.0 3.3 1.8 7.1 4.5 0.0 0.0 0.7 1.3 1.4 3.7 2.3 1.5 - 2017

- , increased. Leisureandhospitality 2.5 percent,ashomeconstruction sector added300jobsannually, or The mining, logging, andconstruction tributed togainsduringthisperiod. related toseasonaltourismalsocon alljobgrowth. Sectors percent of annually, accountingfornearly 30 increasing by700jobs, or4.1percent, sectorledthegrowth, health services During thisperiod,theeducationand 2,500 jobs, or1.8percent,annually. payrolls increasedbyanaverage of From 2001through2007,nonfarm percent, fromayear earlier(Table 2). 2,300jobs, or1.5 an increaseof payrollsnonfarm averaged 158,400, 07Cnu fAgriculture 2007 Censusof (U.S. Agriculture, of Department in theHMAaccountedfor3,135 jobs 2007, farming raising chickens. Asof dustry, supplying the feed neededfor in largely onthepoultry dependent Inc.). inthe HMAisalso Agriculture 2007 (Delmarva Poultry Industry, 14,375 in2001to14,822through by 75jobsayear, or0.5percent,from Delaware—increased thestateof of Virginia’s Shore, Eastern andtherest Peninsula—which includestheHMA, company employees ontheDelmarva (Tablethe country 3).Total poultry producersin thetop10poultry 2 of 2 largest employers intheHMA,and Perdue andMountaireFarms, the production,includes HMA, poultry thelargest industriesinthe One of December. end of atthe hostedinSalisbury tournament Challenge high-schoolbasketball Lights, andtheGovernor’s fest of tival inOctober, OceanCity’s Winter­ such astheRehoboth Beach Jazz Fes promoting localnonsummerevents and countiesintheHMAsuccessfully cent, annually, partly duetothe cities payrolls increasedby400,or2.0per­ ).

- - - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 3 Economic Conditions Source: U.S.Bureau ofLabor Statistics Note: Current isbasedon12-month averages through September2017. Figure 1. – 40 – 30 SectorGrowthinthe – 20 – – 10

Continued 0 Salisbury HMA downturn in theeconomy,downturn theleisure crisisand Despite themortgage foreclosures. of the creditmarketandincreasedrate annually inresponsetotighteningof declined by400jobs, or4.6percent, while thefinancialactivities sector 1,100jobs, or11.0percent,ayear,of in thissectordecreasedbyanaverage Jobsdecline inhomeconstruction. for homesplummeted,leadingtoa tion sectorleddeclinesasdemand The mining, logging, andconstruc 1,800 jobs, or1.2percent,annually. the HMAdeclinedbyanaverage of with theGreatRecession, payrolls in From 2008through2011,coinciding weekend inthesummerseason,an 280,000visitors per ed anaverage of 2008 through2011,OceanCityhost budgets andhighgasprices. From tightening tions duringaperiodof making thempopularfamily destina Washington, D.C. metropolitanareas, near theBaltimore, Philadelphia,and Rehoboth BeachandOceanCityare decline from2008through2011. and hospitalitysectorshowed no 10 20 , PercentageChange,2000toCurrent 30 40 50 - - - 60 in enrollmentfrom7,575studentsto 530 to610inresponseanincrease HMA, expanded itstotalfacultyfrom , thelargest university inthe UniversitySalisbury inWicomico local universities. Duringthisperiod, as well asanincreaseinenrollmentat fromtheagingpopulation, services due tocontinued demandforhealth 500 jobs, or2.3percent,ayear, partly to addjobs, albeitataslower rateof sectorcontinued and healthservices Ocean City, Maryland Update Comprehensive Plan: Town of Zoning Commissionestimates, 2001 through2007(Planningand 2,300, or 1.0 percent, from increase of 4.0 percentin2007(Figure2). percent in2010fromanaverage of 9.8 ment raterosetoanaverage of the weak economy, theunemploy Withthe localeconomicdownturn. sector toaddjobsduringeachyear of 2000 (Figure1)andwas theonly largest percentage gaininjobssince sectorhashadthe health services percent annually. Theeducationand 3.2 8,600, anaverage growth rateof 70 Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Education &healthservices Professional &businessservices Financial activities Transportation &utilities Manufacturing Government Other services Leisure &hospitality Wholesale &retail trade Mining, logging,&construction Information ). Theeducation 2017 - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 4 Economic Conditions Continued Economic conditionsintheHMA Poultry Industry, Inc.). production(Delmarva total poultry feedtoincrease40percent,reducing of in theregion,whichcausedprice This declineismostly duetoadrought employment droppedto13,150jobs. on theDelmarva Peninsula, in2011, through 2010,totaling14,900jobs was relativelydustry stablefrom2008 productionin Although thepoultry Source: U.S.BureauofLaborStatistics Note: Unemploymenthasdeclinedsince2010butremainsaboveprerecessionlevels. ber 2017. - during the12months endingSeptem 5.5percent recession toanaverage of HMA hassteadily decreased sincethe tions, theunemployment ratein the and strengtheninglabormarket condi continued economicgrowth result of 500 jobs, or4.1percentannually. Asa growth, averaging the fastestrateof sectorledwith and businessservices 2.8 percentannually. Theprofessional 700jobs,creasing byanaverage or of in totalgrowth duringthisperiod,in payrollspitality sectorlednonfarm 2017. The leisureandhos September jobs duringthe12monthsending or 1.7percentannually to158,400 2,500jobs,increased byanaverage of covery payrolls began,nonfarm have 151,200 jobsin2007.Sincethere theirprevious peakof surpassing farm payrolls fully recovered by 2015, began toimprove in2012,andnon Figure 2. Labor force and resident employment 140,000 150,000 160,000 170,000 180,000 190,000 200,000 ment Rateinthe Trends inLaborForce,ResidentEmployment,andUnemploy 

Labor force 2000

2001

2002

2003

2004

2005 Salisbury Resident employment

- 2006 ­ - - ­

- 2007

2008

HMA, March 2017. winter season,the3monthsending compared withtheaverage duringthe 19,000jobs, or95percent, increase of hospitality sectoraveraged 39,000,an payrollsnonfarm intheleisureand as the3monthsendingAugust 2017, During thesummerseason,defined the numerous visitors totheregion. tality sectorspikestoaccommodate employment intheleisureandhospi June, July,tourist seasonof andAugust, previous 12months. Duringthepeak 500jobs, or1.8percentfrom the of this sectortotaled27,600,anincrease payrolls 2017,nonfarm September in HMA. Duringthe12monthsending largest employment sectorinthe the leisureandhospitalitysector, the theseasonalexpansion occurs in of February, andMarchsince2000.Most January,jobs inthewintermonthsof payrollaverage nonfarm number of average about20,000higherthanthe June, July, andAugust have beenon jobs duringthesummermonthsof year. payroll Nonfarm the timeof data vary significantly on depending HMA, themonthly payroll nonfarm inthe Due toseasonalinfluences The mining, logging, and construction The mining, logging, andconstruction building activity continues toincrease. structure, residential,andcommercial As thepopulationexpands, infra 2009

2010 2000Through2016

2011

2012

2013

Unemployment rate 2014

2015

2016 10.0 0.0 2.0 4.0 6.0 8.0 ­

Unemployment rate -

-

Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 5 Source: U.S.Bureau ofLaborStatistics Note: Basedon12-month averagesthroughSeptember 2017. Figure 3. Economic Conditions Leisure &hospitality17.4% Education &healthservices15.8% Other services4.0% Current NonfarmPayroll Jobsinthe by Sector 15.0% Government

Continued 7.1 percent,fromayear earlier. The ber 2017,increasingby900jobs, or ­ during the12monthsendingSeptem sector was thefastestgrowing sector The professionalandbusinessservices the past12months. 4.5percentduring jobs, anincreaseof activities sector, whichadded300 have alsostrengthenedthefinancial homebuilding activity andhomesales in homebuildingactivity. Increased Hotel inOceanCity, andanincrease such astheHyatt PlaceOceanfront several new hotels, of construction the becauseof ber 2017,inpart, ­ during the12monthsendingSeptem by300jobs,sector grew or3.7percent, and accounts for 17 percent of alljobs and accountsfor17percentof in theHMAwith27,600employees sector asthelargest employment sector tied withtheleisureandhospitality wholesale andretailtradesectoris zero salestaxandoutletstores. The Delaware’sdestination becauseof The HMAisalsoapopularshopping age throughouttheHMA. expanding wirelessbroadbandcover providers suchasBloosurf, service in thesector, andexisting internet whichhashinderedgrowth the lackof ments intobroadbandinfrastructure, are due, tolocalandstatein inpart, recent large payroll gainsin this sector Mining, logging,&construction5.3% Professional &businessservices8.6% Manufacturing 8.9% Financial activities4.3% Information 0.8% Transportation &utilities2.7% Wholesale &retail trade17.4% Salisbury HMA ,

­vest­ - sector has grown by an average of 600 sector hasgrown byanaverage of 2017,the months endingSeptember 100 jobs, or0.4percent,duringthe12 tor tolosejobs. Despitedecliningby was theonlyand healthservices sec During thepast12months, education additional 13stores. in Sussex Countythatincludean and expansions intheTanger Outlets recentrenovations partly becauseof 2017, 12 monthsendingSeptember 100 jobs, or0.4percent,duringthe retail tradesubsectorincreasedby alljobsinthissector. The percent of nent with23,100jobs, ornearly 84 trade subsectoristhelargest compo in theHMA.Inthissector, theretail since 2012. 1.7percent age annual growth rateof next 3years, slightly below theaver 1.5percentannually duringthe of expected toincreaseatanaverage rate the economy, payrolls nonfarm are retire andanoverall improvement in baby boomergeneration continues to asthe an increaseinnetin-migration sectors areexpected togrow. Due to During the3-year forecastperiod,all 2018. the fallof isexpected tobeginin construction Rehoboth Beach.Thefirstphaseof and buildinganew surgicalcenterin hospital campusinLewes, Delaware million toward thecurrent upgrading Healthcare recently approved $180 complete in2019.Inaddition,Beebe began in2016andisestimatedtobe in Milford,Delaware. Construction $300 millionintoanew healthcampus in theHMA,Bayhealth, isinvesting thelargest healthcareproviders of roll jobsintheHMA(Figure3).One pay nonfarm for nearly 16percentof 2012. Currently, thissectoraccounts jobs, or2.5percent,annually since - - - - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 6 Population andHouseholds estimates byanalyst Sources: 2000and 2010—2000Censusand2010Census; currentandforecast— Notes: Thecurrent dateisOctober1,2017.The forecast dateisOctober1,2020. Figure 4.

Average annual change – 1,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0

HMA, Components ofPopulationChangeinthe 2000 to2010 2000toForecast Net naturalchange per year comparedwith5,900people 3,050people period toanaverage of droppedduringthis Net in-migration or 1.0percent,from2008to2012. 3,700people,declining toanaverage of people, or2.0percent,annually before population growth averaged 6,575 2008, priortotheGreatRecession, 2012. Bycomparison,from2000to 4,725 people, or1.2percent,since with annual populationgrowth of the HMAisestimatedat406,400, October 1,2017,thepopulationof before theGreatRecession. Asof July 2012butataslower ratethan P cities, and accessible healthcare. Sussex living, proximity toother low costof itsrelatively tion forretireesbecauseof The HMAhasbeenapopulardestina­ from 2000totheforecastdate. populationchange intheHMA of older. Figure4shows thecomponents populationgrows and thecurrent as moreretireesmove totheregion, minus(resident births residentdeaths) ingly negative netnaturalchange population growth duetoanincreas 4,850peryear,average outpacing of hasincreasedtoan net in-migration economy begantorecover in2012, per year from2000to2008.Sincethe 2010 tocurrent bury HMAhasincreased since opulation growth intheSalis­ Net migration Current toforecast Salisbury Salisbury - seasonal housingbuiltalongthebays from 2000through2010were for housing developments intheHMA HMA. Approximately 69percentof tothe netin-migration percent of 3,725people,an average or86.6 of annual increasedto netin-migration totheHMA.Since2010, in-migration net accounted for67.8percentof averaged 3,650peopleannually and intoSussexin-migration County tax. From 2000to2010,annual net marinas, andrelatively low property clubs, courses andcountry ous golf group,this demographic withnumer HMA isespecially attractive among the of part County inthenorthern households, or1.2percent,annually 1,775 households, anincreaseof The HMAhasanestimated160,900 from 2010to2014. 250ayearan average increaseof from 2000 to2010, before decliningto 720ayearincreased byanaverage of change natural net com­­­parison, the HMAduringthisperiod.By in occurred more deathsthanbirths annually since2014,indicatingthat 270people averaging adeclineof negative inthepastfew years, tion, netnaturalchange hasbecome 37.9years. With theagingpopula of age higher thanthenationalmedian HMA was estimatedat44.9years, 1-year data).Themedianage inthe American Community Survey [ACS] percent nationally (2013and2016 aged 65orolder, comparedwith15.2 thepopulationwas 22.5 percentof July 2016,nearly population. Asof the accounted for20.4percentof older In 2013,peopleagedand 65 the populationcontinues toget older. As moreretireesmove intotheHMA, amenities andrecreationalactivities. look forcommunities thatoffermore and oceanfronts, asretireesincreasingly - - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 7 Population andHouseholds Housing Market TrendsHousing analyst Sources: 2000and2010—2000Census2010Census;current—estimatesby Note: ThecurrentdateisOctober1,2017. Figure 5. estimates byanalyst Sources: 2000and2010—2000Census2010Census;currentforecast— 2020. is October 1, The forecast date 2017. is October1, Notes: Thecurrentdate Figure 6.

100,000 120,000 Average annual change 20,000 40,000 60,000 80,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 0

Population andHouseholdGrowth inthe 2000 toForecast 2000 toCurrent Number ofHouseholdsbyTenureinthe 2000 to2010 2000

Population Continued Renter percent, annually from2000to2010. hold growth averaged 2,475,or1.9 since 2010.Bycomparison,house from an8.1-month supply during inven after theforeclosure crisis. The tory excess inven of and theabsorption adecreasein new construction reflects Thedeclineinvacancies this report). April 2010(Table DP-1 attheendof percent, down from4.1percentin 2.2 with anestimatedvacancy rateof HMAarebalanced, the Salisbury Sales housingmarketconditionsin Sales Market 2010 tocurrent 2010 tory of homes forsaledecreased ­tory of Owner Households Salisbury HMA, Salisbury HMA, Current toforecast Current - -

population growth willbeduetonet or 1.4percent,annually. the Allof increase byapproximately 5,675ayear, population intheHMAisexpected to During the3-year forecastperiod,the date.HMA from2000tothecurrent householdsbytenure inthe number of Great Recession. Figure6shows the thedecadedueto beginning of demand forrentalunitssincethe tight creditmarketandanincreased the 73.2 percentin2010becauseof is currently 71.2percent,down from (Figure 5).Thehomeownership rate tion growth between thetwo periods theoverallreflects declineinpopula The declineinhouseholdgrowth of homessold remainedwell below of Although home salesgrew, the number with retireesmoving intotheregion. increased increased asnetin-migration through 2011,homesalesrecently After decliningeachyear from2008 with adjustmentsbytheanalyst). ending May 2017(CoreLogic, Inc., 7.2-month supply duringthe12months the 12monthsendingMay 2016toa suburban town centers. as well asdowntown districtsand the AtlanticOcean,coves, andbays, around regionswitheasyaccessto Growth isexpected toconcentrate annually toapproximately 168,000. 2,375, or 1.5 percent, by anaverage of in theHMAisexpected toincrease negative. households Thenumber of change isexpected tobeincreasingly becausenetnatural in-migration, - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 8 Sales Market Market TrendsHousing Continued the housingmarketbegantorecover 6,875before a 12-monthaverage of from 2008through2011to downturn significantly duringtheeco­ homes sold.Homesalesdeclined 16,400 reaching apeakin2005of home salesaveraged 14,650annually, 2004 through2006,new andexisting son, from duringthehousingboom adjustments bytheanalyst). Bycompari 11,800 homes(CoreLogic, Inc., with from theprevious 12-monthperiodto increased 8percent,orby870homes, townhomes, andcondominiums new andexisting single-family homes, months endingMay 2017,salesof the prerecessionpeak.During12 These properties wereThese properties slow toenter in 2015thatare stillbeingabsorbed. thatenteredthemarket properties REO tothelarge numberpart, of sales. Thishighershareisdue, in of accounted forapproximately 1percent from 2001through2007,whenthey sales remainshigherthanatanytime distressedproperty average shareof all homesalesin2011.However, the 16percentof sales, below thehighof total accounted for nearly 8 percent of estate owned sales) [REO]andshort May 2017, distressedhomesales(real decade. Duringthe12monthsending the atthe beginningof in-migration homes was slow duetoadeclineinnet those Recession, of butabsorption entered themarketduringGreat foreclosedhomes A large number of $249,700in2013. to alow of at $316,000in2006beforedeclining 12-month average salespricepeaked 12-month period.Bycomparison,the cent, or$5,700,duringtheprevious 2per compared withadecreaseof 5 percent,orby$11,850,to$272,100 existing homesalespriceincreased May 2017,theaverage new and in 2012.Duringthe12monthsending nomic

- -

transitioned intoREOstatuswas 3.4 delinquent orinforeclosure)had seriously delinquent(90ormoredays homeloansintheHMAthatwere of May 2017,thepercentage sales asof REO relatively higherpercentage of below thenationalaverage. Despitea to slower homepricegrowth thatwas for aregularresalehome, contributing theaverage salesprice than one-half an REOhomeaveraged $119,900,less ending May 2017,thesalespriceof ricane Sandy. Duringthe12months given tohouseholdsaffectedbyHur foreclosureprotections and becauseof arejudicialforeclosurestates, Maryland the marketbecauseDelaware and or 12percent,a year from 2013through 250homes,increased byanaverage of months. Single-family permitting a smalldeclineduringthepast 12 since2012,despite homes permitted tion, asmeasured bythenumber of ­ has ledtoariseinnew homeconstruc from improved economic­ demand forsecondhomesresulting and Increasing netin-migration percent in2013. 31 ago anddown from apeaklevel of nationally, unchanged fromayear absentee-owner sales consisted of com­ A HanleyWood Company).By 42 percentayear earlier(Metrostudy, months endingMay 2017,down from total salesintheHMAduring12 purchases, comprised38percentof primarily investment orsecondhome Absentee-owner sales, whichare 1.3 percent. the average priortotherecessionof 9.3percent,itisabove 2012 peakof Although thisaverage isbelow the May 4.3percent. 2016average of 3.2percentbutbelowaverage the of percent, slightly above thenational parison, 27 percent of homesales parison, 27percentof conditions - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 9 Table 4. Sources: U.S.CensusBureau,BuildingPermitsSurvey;estimatesbyanalyst Notes: Includestownhomes.CurrentincludesdatathroughSeptember2017. Source: Estimatesbyanalyst this table.TheforecastperiodisOctober1,2017,to 2020. ­demand. Demandfor100mobilehomesduringtheforecastperiodisexcludedfrom 83,000 othervacantunitsinthesubmarketwilllikelysatisfysomeofforecast Notes: The600homescurrentlyunderconstructionandaportionoftheestimated Figure 7. 1,000 2,000 3,000 4,000 5,000 6,000 Sales Market Market TrendsHousing 0

550,000 450,000 350,000 250,000 150,000 Estimated DemandforNewMarket-RateSalesHousingin the SalisburyHMA 2000 Single-Family HomesPermittedinthe to Current From

Price Range($) 2001

2002 Continued

2003 and higher

549,999 449,999 349,999 249,999 2004 To 2005 During theForecast Period 2006

2007

renter households live insingle-family all approximately 48.7percentof July 2016, market-rate units).Asof by theanalyst basedonyear-round (estimates 9.0percent(Figure8) rate of estimated April2010rentalvacancy October 1,2017,adeclinefrom the rate estimatedat5.2percentasof anced, withanoverall rentalvacancy HMAare­ the Salisbury Rental housingmarketconditionsin Rental Market 2008 5 percentcomparedwiththesame homes were adeclineof permitted, 2017,2,500single-familySeptember ted. Duringthe12monthsending 1,550homespermit 2011 toalow of homes, or16percent,annually through 500 before decliningbyanaverage of (Figure7), 5,075 homespermitted homebuilding peakedin2004with 2016. Bycomparison,single-family

Demand 2009 Units of 2,225 2,225 320 630 950 2010

2011 Salisbury HMA, 2012

2013

2014 Percent of Total currently bal 10.0 35.0 35.0 15.0

5.0 2015

2016 2000

2017 - - has a private marina, two golf courses, has aprivate marina,two golf subdivision inWorcester County. It GlenRiddle isasingle-family home one-bedroom unit. at$459,000fora with pricesstarting became available forsalein2017, one tofourbedroomsinsize. Units 54units, rangingfrom consists of the Tanger Outlets. Thedevelopment Rehoboth Beachand3milesfrom in Dewey Beach,Delaware southof condominiumdevelopmentis aluxury The Residences atLightHouseCove are currently underconstruction. An estimated 600 single-family homes data). period ayear earlier(preliminary 3.7 percent in the third quarter of of 3.7 percentinthe thirdquarter 2017,down from of third quarter the 2.5percentasof vacancy rateof market iscurrently tight witha market isbalanced,theapartment Although theoverall rentalhousing 2016 ACS 1-year data). 34.8percent(2013 and average of 2013 buthigherthanthenational homes, down from 51.4percentin and $449,999(Table 4). new homespricedbetween $250,000 thedemandwillbefor 70 percentof thedemand.Approximately tion of willsatisfyapor under construction (Table 1).The600homescurrently HMA, including100mobilehomes expected for6,425new homesinthe During thenext 3years, demandis $380,000. price of are builtastheysoldwithabase aplanned500.Homes homes builtof development, with60 in phase1of Downs. Thesubdivision iscurrently and isneartheCasinoatOcean - Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 Sources: U.S.Census Bureau,BuildingPermitsSurvey; estimatesbyanalyst rent. Excludestownhomes. Currentincludesdata throughSeptember2017. Notes: Multifamily unitspermittedincludesseasonal unitsnotavailableforyear-round Figure 9. 1,000 1,200 1,400 1,600 1,800 2,000 200 400 600 800 Rental Market Market TrendsHousing 0

2000 Multifamily UnitsPermittedinthe Current

2001

2002 Continued

2003

2004

2005

2006

2007 Rents in the third quarter of 2017 Rents of inthethirdquarter hasincreased. while netin-migration the HMAhasdeclinedeachquarter, vacancy2012, theapartment ratein 5.3percent.Ingeneral, since rate of is slightly below the2012vacancy 2016 (Reis, Inc.). rate Thecurrent Sources: 2000and2010—2000Census2010Census;current—estimatesbyanalyst Note: ThecurrentdateisOctober1,2017. Figure 8. 2008 ber 2017,660multifamily unitswere ­ During the12monthsendingSeptem in theHMApriorto2005(Figure9). activity mitting isbelow thelevel of multifamily per­ rateof The current year-round market-raterentalunits. multifamily arenot unitspermitted HMA, asignificantpercentage of role inthehousingmarket Because condominiumsplay astrong $1,126 respectively (Reis, Inc). averagedapartments $798,$941,and for one-,two-, andthree-bedroom or 2percent,fromayear ago. Rents $20, averaged $950,anincreaseof

2009 10.0 0.0 2.0 4.0 6.0 8.0

2010 Salisbury HMA,

2011 Rental Vacancy Ratesinthe

2012

2013 2000 5.6

2014 2000 to 2000to 2015

2016

2017

increasing dramatically in2005and averagedpermitted 920ayear, before multifamily units 2004, thenumber of data).From 2000through liminary during theprevious 12months (pre percent fromthe870unitspermitted 210,or24 adecreaseof permitted, the totalstudent populationinthe students, of makingupabetterpart 12,650 a combinedenrollment of Shorehave Eastern Maryland of UniversitySalisbury andUniversity increase inthedemandforapartments. the HMA,contributingto recent young professionals inandaround Center—is appealingtostudentsand ShoreMedical such astheEastern Universitybury andnearby hospitals bars andrestaurants, aswell asSalis­ many amenities—includingnumerous inWicomico Salisbury Countywithits and Wicomico Counties. Downtown due toanincreaseinactivity inSussex activity since2011ispredominantly The growth inmultifamily building family unitswere annually. permitted 850multithrough 2016,anaverage­ of slow populationgrowth. From 2011 by limitedaccesstofinancingand reduceddemandcaused because of inpart, 240unitspermitted, a low of 220units, or36percent,ayear to of in theHMAdeclinedbyanaverage through 2010,multifamily permitting fell to910unitsin2007.From 2008 housing crisis, multifamily permitting tively. the With thebeginningof 2006 to1,900and1,825unitsrespec­ Salisbury HMA, 2010 9.0 2000toCurrent Current 5.2 -

Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 11 Table 5. Source: Estimatesbyanalyst of theestimateddemand.Theforecast periodisOctober1,2017,to2020. utilities or concessions.The400unitscurrently under construction willlikelysatisfy some Numbers maynotaddtototalsbecause ofrounding. Monthly rent doesnotinclude Notes: 1,375 ormore 1,175 to1,374 975 to1,174 Total Monthly Rent One Bedroom Rental Market Market TrendsHousing ($)

Estimated DemandforNewMarket-RateRentalHousing inthe Salisbury HMA

Demand Units of 240 100 120 Continued 25 During theForecastPeriod Total 1,550 ormore 1,350 to1,549 1,150 to1,349 Monthly Rent Two Bedrooms ($)

of unitsavailable forrent.Oceanfront of theoverall inven of ­ and isnotapart thatisseasonal family construction multi­ have asignificantamountof Both Sussex andWorcester Counties seasonal beachfrontproperty. developments inSussex Countyis thegrowth inmultifamily much of Routes 13and9,respectively. However, multifamily developments near Sussex Countyalsohadsomerecent Lewes andSeaford,Delaware in of renter households. Thetown centers all for approximately 5percentof with studenthouseholdsaccounting campusintheHMA, students live off HMA. Approximately 53percentof HMA areseasonalunits. multifamily inthe homespermitted seasonal rentals. About26percentof of which arebuiltforthepurpose two, three, orfour-unitdevelopments, family with homesareoftenreplaced Aside fromcondominiums, single- 60unitssince2008. an average of annually intheHMAcomparedwith 210 condominiumswere permitted From 2001through2007,anestimated than beforetheGreatRecession. althoughatlowerconstructed, rates Beach andOceanCityarestillbeing condominiums inplaceslikeRehoboth Demand Units of 980 290 490 200 Three orMore Bedrooms Total 2,150 ormore 1,950 to2,149 1,750 to1,949 1,550 to1,749 1,350 to1,549 Monthly Rent ($)

Demand Units of 410 140 100 40 40 80 tory tory

in 2017,thedevelopment isonthe and $1,500respectively. Completed units. Rents beginat$975,$1,250, two-bedroom, and24three-bedroom 16one-bedroom,32 consisting of Sussex Countyisa72-unitcomplex The Residences atRiver Placein University.Salisbury from downtown and Salisbury isapproximatelyproperty 4miles for three-bedroomapartments. The $1,299 fortwo-bedroom and$1,499 apartments. Monthly at rentsstart two-bedroom and24three-bedroom County. 72 Thecomplex consistsof ment recently builtin2015Wicomico developOcean Aisleisanapartment ­ rate rentalhousingintheHMA. bedroomsfornew market- number of the totaldemandbyrentlevel and theforecastperiod.Table 5shows of rental housingduringthefirstyear thedemandfor will satisfymostof andinplanning under construction Salisbury, Unitscurrently Maryland. and residentialdevelopment in Landing, amixed-use commercial Marina of to beincludedaspart are currently intheplanningstages two-bedroom apartments. Fiftyunits 88studio, one-,and will consistof Beach, aseniorliving community that inRehobothHomestead apartments tion, includingThe Lodge atTruitt Currently, 400unitsareundercon­ market-rate rentalunits(Table 1). demand isexpected for1,625new During the3-year forecastperiod, Blades Marina. Nanticoke MemorialHospitaland acrossfromthe ­ struc Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 12 Data Profile Sources: U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment;estimatesbyanalyst and the12monthsthroughSeptember2017.MedianFamilyIncomeisfor2016.ThecurrentdateOctober1, Notes: Numbersmaynotaddtototalsbecauseofrounding.Employmentdatarepresentannualaveragesfor2000,2010, NA =datanotavailable. Table DP-1. Median FamilyIncome Rental vacancyrate Owner vacancyrate Total housingunits Percent renter Renter households Percent owner Owner households Total households Total population Nonfarm payroll jobs Unemployment rate Total resident employment Salisbury HMA DataProfile, 2000toCurrent 184,923 122,850 312,572 133,800 154,876 30,358 92,492 24.7% 75.3% 2000 5.6% 2.0% 4.5% NA 231,143 108,036 147,605 373,802 144,200 159,818 39,569 26.8% 73.2% 2010 9.0% 4.1% 9.8% NA $66,334 249,000 114,500 160,850 406,400 158,400 176,900 Current 46,350 28.8% 71.2% 5.2% 2.2% 5.5% 2000 to2010 Average AnnualChange(%) 2.3 2.7 1.6 1.9 1.8 0.8 0.3 NA 2010 toCurrent 1.0 2.1 0.8 1.2 1.1 1.4 1.5 NA Salisbury, MD-DE • COMPREHENSIVE HOUSING MARKET ANALYSIS 13 a result,theanalyst, throughdiligent fieldwork, intheresidential buildingpermits.not reflected As are some unitsclassifiedascommercialstructures For buildingpermit. example, a differenttypeof orareissued or createdwithoutabuildingpermit occurs inanHMA.Someunitsareconstructed sarily allresidentialbuildingactivity that reflect Building Permits: donotneces­ Buildingpermits vacant bytheCensusBureau. specifiedas“other” workers; andthecategory recreational, oroccasionaluse;usedbymigrant or soldbutnotoccupied;heldforseasonal, thereforeincludesunitsrented for rent.Theterm all vacant unitsthatarenotavailable forsaleor Development (HUD),othervacant unitsinclude by theU.S. HousingandUrban of Department Other Vacant Units:Inthisanalysis conducted development pipeline. orunitsinthe units currently underconstruction excess vacancies. Theestimatesdonotaccountfor theanalysis, growth, losses, and dateof the as-of the3-year forecastperiodgiven conditionson of needed toachieve abalancedmarketattheend thetotalhousingproduction the estimatesof buildingactivity.are notaforecastof Theyare Demand: Thedemandestimatesintheanalysis 28,2013. the OMBBulletindatedFebruary Management andBudget (OMB)in the Officeof isbasedon thedelineationsestablishedby report The metropolitanstatisticalareadefinitioninthis Forecast period:10/1/2017–10/1/2020— date:10/1/2017—EstimatesbytheanalystCurrent 2010: 4/1/2010—U.S. Decennial Census 2000: 4/1/2000—U.S. Decennial Census Data DefinitionsandSources Estimates bytheanalyst huduser.gov/portal/ushmc/chma_archive.html For onothermarketareas, additionalreports please goto Contact Information CMARtables_SalisburyMD_DE_18.pdf for thisHMA,goto For tothehousingmarket additionaldatapertaining single-family andmultifamily buildingpermits. of theseestimatesareincludedinthediscussions Some of activity. thisadditionalconstruction makes anestimateof on localeconomicandhousingmarketconditions. government officialswhoprovided dataandinformation sourcesandstatelocal appreciation tothoseindustry modified bysubsequentdevelopments. HUDexpresses its national sources. Assuch,findingsorconclusionsmay be datefromlocaland availableinformation ontheas-of aspossiblebased on findings areasthoroughandcurrent Market Analysis Division withinHUD. Theanalysis and guidelines andmethodsdeveloped bytheEconomicand The factualframework forthisanalysis follows the may beunderconsiderationbytheDepartment. insuranceproposalsthat anymortgage of acceptability regardingthe tomakedeterminations does notpurport housing marketconditionsandtrends. Theanalysis builders, mortgagees, withlocal andothersconcerned tion, findings, andconclusionsmay alsobeusefulto HUDinitsoperations. Thefactualinforma guidance of This analysis fortheassistanceand hasbeen prepared [email protected] 215–430–6680 Philadelphia HUDRegional Office Matthew Tieff,Economist huduser.gov/publications/pdf/ .

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