Real Estate Report for Eastern Shore Shows Signs of Recovery

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Coldwell Banker Chesapeake Real Estate just released January 2015 monthly real estate market data for the Eastern Shore Of Maryland – including Caroline, Talbot Dorchester, Queen Anne’s, Kent, and Cecil Counties.

Highlights include:

Sold Dollar Volume: Sellers on the Upper Eastern Shore closed $61,386,729 in real estate sales in January– up 13.95% from the $53,873,985 closed in January last year. This is a positive sign for recovery. Another good sign are the 140 new pending contracts booked in January 2015, a 29.63% improvement over the previous year. Taken together these two metrics bode well for a stronger 2015 in all Eastern Shore real estate markets.

Our Guidance: there has never been a better time to buy. We have the bottom of the market in our rearview mirror and demand is starting to strengthen. Long –term mortgage rates are under 4% and the national economy is heating up. Our agents look for this trend to slowly accelerate in 2015 and thereafter as national economic fundamentals and consumer confidence continues to improve and waterfront buyers return to the shores of the Chesapeake Bay.

Average Sold Price: The average sold price of an Eastern Shore residential property in January 2015 was $290,932 – down from $297, 646 achieved in January 2014 down marginally (- 2.26%) year-over-year. The low average sold price illustrates the continued absence of luxury and waterfront buyers from the Eastern Shore markets but the marginal decline points to stabilizing prices. Look for this number to increase as we go into the spring. The average sold price is sensitive to periodic outliers in individual markets.

Median Sold Price – The median sold price in January 2015 of $185,000 continues to hover near the bottom of its 10-yr range and is a decline of 7.5% from January 2014. This reflects the continued high number of foreclosures and short sales in the market and the previously mentioned absence of luxury buyers. The median Sold Price will improve in 2015 and thereafter as the inventory of foreclosures declines and luxury buyers return to the market.

Absorption Rate – The inventory of properties on the market on the Eastern Shore (2,696 properties) at the end of January 2015 is at the bottom of its five-year range. In January 2015, 221 properties were SOLD up 11.8% from the 181 closed in January of 2014. This absorption rate suggests a 10.5 month inventory of properties, still well above the 6 month inventory considered to be a market in equilibrium but well below the 5 year average of 13.2 months. This inventory will continue to decline to healthier levels as spring progresses. Look for this trend to continue as gas prices continue to fall in 2015 and the Washington/Baltimore metroplex becomes more congested and expensive for first-time and first move-up buyers

Average Days On Market – the average of 172 Days On Market (DOM) for all sold listings in January 2015 is an improvement of 1.15% over the January 2014 (174 DOM). Look for this trend to continue in 2015 as value conscious buyers recognize the good values to be found in most Eastern Shore markets. A rising interest-rate environment will also prompt buyers to jump off the fence in 2015.

Average List Price For Solds – The average list price for solds in January 2015 of $322,306 is 8.43% below the $351,969 noted in January 2014. This metric has experienced considerable downwards pressure from short sellers and sellers will to make significant concessions to achieve timely sales for lifestyle reasons. Look for this trend to continue through 2015 as excess and shadow inventory continues to be absorbed.

Shore Bancshares Changes to “Living Wage” Base for Employees

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Easton, Maryland. Shore Bancshares, Inc. announced to its employees in December that they will be adopting a living wage increase beginning January 1, 2015. In April of 2014, Governor Martin O’Malley signed a bill to increase the minimum wage in Maryland from $7.25 to $10.10 by 2018. “To provide employees with a sufficient salary that will help meet the basic needs of our employees and their families, we went a step above the minimum wage to a living wage increase in 2015”, says President & CEO Scott Beatty. The living wage is the minimum hourly wage that is sufficient to meet the basic living needs of a single employee working full-time. The living wage is not required by the state unless a company has a working contract with a local government agency or if they receive subsidies from them. Because taxes and expenses vary from county to county and state to state so does the living wage.

Although the minimum wage increase of $10.10 for the state of Maryland does not go into effect until 2018, Shore Bancshares made the increase to base salaries in January 2015. “In all cases our employee’s hourly wage is well above the minimum wage”, says PJ Dill, Chief Human Resources Officer of Shore Bancshares, Inc. “As part of our annual compensation review, we have made a conscious decision to set our base wage to above the average of the two highest counties (Talbot and Queen Anne’s) at $11.06”, says Scott Beatty President and Chief Executive Officer of Shore Bancshares, Inc. At Shore Bancshares, we believe it is important to not only support our employees who are our most valuable asset but to also support the growth in our communities where we live and work.

Shore Bancshares, Inc. is a $1.1 billion asset financial holding company headquartered in Easton Maryland who employs over 300 employees. It is the largest independent financial services company on the Delmarva Peninsula that offers banking, insurance and wealth management services through its community of companies. Two full service community banks, The Talbot Bank of Easton MD and CNB, headquartered in Centreville MD. Wye Financial & Trust a division of CNB located in Easton, MD who offers wealth management and trust services and personal, business, benefits, trucking and marine insurance solutions through Avon-Dixon Agency, Elliott Wilson Insurance, Freestate & Son, located in Easton and Centreville, MD and Jack Martin & Associates, headquartered in Annapolis, MD.

Local Real Estate: Eastern Shore Holds Promise for 2015

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The real estate market looks positioned for a good year according to an overview put together by Coldwell Banker Chesapeake Real Estate.

They just released their “Eastern Shore Real Estate market 2014 Year End Numbers” with a forecast for a climb back to normal to continue through 2015.

“We’re bullish on both Kent and Talbot markets for 2015, ” says Hugh Smith, broker/owner of Coldwell Banker Chesapeake. “If you look at economic indicators in the national economy like lower unemployment, we’re seeing this as a tipping point for an upswing in Kent and Talbot sales. Even a stock market correction can be a good thing as people start to look for different kinds of investments and the possibility of an interest rate increase will probably knock some people off the fence from watching to buying,” he added.

The study and projection include Caroline, Dorchester, Talbot, Queen Anne’s, Kent and Cecil Counties:

Sold Dollar Volume: Sellers on the Upper Eastern Shore closed $890,448,394 in real estate sales in 2014 – down 42% from the peak of the last boom market in 2005. This represents only a marginal improvement year-over-year and but a 45% improvement over the bottom of the market which was achieved in 2011. Every year since 2011 has shown a slow but steady improvement in this metric. Look for this trend to slowly accelerate in 2015 and thereafter as national economic fundamentals and consumer confidence continue to improve and waterfront buyers return to the shores of Chesapeake Bay.

Average Sold Price: The average sold price of an Eastern Shore residential property was $282,772 in 2014 – down from a high of $383,488 achieved in 2007 and down marginally year-over-year. The average sold price continues to suffer for the continued absence of luxury and waterfront buyers from the eastern shore markets. Look for this number to improve as the tax climate for high net-worth buyers improves with the new administration in Annapolis.

Median Sold Price – The median sold price of $210,000 continues to hover near the bottom of its 10-yr range. This reflects the continued high number of foreclosures and short sales in the market and the previously mentioned absence of luxury buyers. The median Sold Price will improve in 2015 and thereafter as the inventory of foreclosures declines and luxury buyers return to the market.

Units Sold – The absorption rate of Eastern Shore real estate was still off its 2005 highs (when 4,411 units were sold) but at 3,149 units it is a vast improvement over the low of 2,050 units posted in 2008. Look for this trend to continue as gas prices continue to fall in 2015 and the Washington/Baltimore metroplex becomes more congested and expensive for first-time and first move-up buyers.

Average Days On Market – The average of 160 Days on Market (DOM) for all sold listings is a significant improvement over the high of 203 experienced in 2011. Look for this trend to continue in 2015 as value conscious buyers recognize the good values to be found in most Eastern Shore markets. A rising interest-rate environment will also prompt buyers to jump of the fence in 2015.

Average List Price For Solds – The average list price for solds at $302,572 is just off its bottom of 299,425 experienced in 2011This metric has experienced considerable downwards pressure from short sellers and sellers will continue to make significant concessions to achieve timely sales for lifestyle reasons. Look for this trend to continue through 2015 as excess and shadow inventory continues to be absorbed.

The real estate markets of the Eastern Shore are slowly returning to normal market conditions and should continue to improve in 2015 along with consumer confidence and national economic conditions. There is no reason to believe that we will return to the bubble conditions of 2005 anytime soon nor is there any reason to anticipate another bust like 2008-2011. Sellers who position their asking prices well relative to the market should anticipate selling in a reasonable period of time. Buyers who jump in in 2015 should find excellent choice and good values. Buyers who wait until late in 2015 or beyond, risk missing the most pronounced Buyers’ market conditions in a generation.

Mark Calendar: Young Professionals in County Meet Today

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The newly created Kent County Young Professionals Association meeting on January 15  the Chestertown Visitors Center. It’ll be at 7:30pm.

Art As Economic Engine: The A and E District Advantage

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As the town council readies to submit an “Intent to Apply” request to the State to designate Chestertown as an Arts and Entertainment District, the Greater Chestertown Initiative (GCI) committee has identified some of the economic advantages to artists, businesses and individuals living and working within an A & E District:

The 2014 legislature defined a Qualified Residing Artists (QRA) as an individual who: owns or rents residential real property in the state; conducts a business in any A&E district; and derives income from the sale or performance within any A&E district, or any artistic work that the individual wrote, composed, or executed, either alone or with others, in an A & E district.

Income Tax Subtraction Modification: Any QRA who resides in Maryland, creates artistic work in any of the 22 A E districts and sells that work in any of the 22 districts will be eligible for the artist’s income tax incentive. The act took effect July 1, 2014 and is applicable to all taxable years beginning After December 31, 2013.

Exemption from Admission and Amusement: In addition, admission and amusement tax gross receipts for any amusement charge levied by an A&E enterprise or any QRA, are exempt for a period of (1-10) years

Property tax credit: Property tax credits are available for the owner of a building located within the A&E District. The building must be partially built or renovated for the use by a Qualified Residing Artist (QRA), or an A&E enterprise can be eligible for a property tax credit for (1-10) years, as long as the building is used by the QRA or an A&E enterprise.

The owner will work with the State Assessment Office to determine the qualified renovations and previous assessment to determine the amount of the credit. If less than the whole building is used by the QRA, the credit is only for the portion used by the QRA. The town may choose any period of time up to 10 years to determine the credit.

 Examples of Property Tax Credit

(It is important to note that these are possible guidelines and may not be the actual percentages sought during the application process and will depend on how the request is packaged. Lani Seikaly, President of RiverArts and spokesperson for Greater Chestertown Initiative wrote to the Spy that the State recommended asking for the highest percentage of property tax credit. The State pointed out that Leonardtown was granted a 100% incentive for all ten years)

 

100% —1st and 2nd years

80% —3rd and 4th years

60% —5th and 6th years

40% —7th and 8th years

20% —9th and 10th years

0% —after 10 years

 

A 2013 Towson State economic analysis of the 22 A&E districts and their impact on jobs, wages and income, maybe be found here:

Form 501ae lists qualifications needed for tax reduction here.

Compiled with research help from Jeff Grotsky, Greater Chestertown Initiative.

Benchworks Names Melissa Johnston as President

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Melissa Johnston

Melissa Johnston

Benchworks is pleased to announce that Melissa Johnston has been named to the position of President. She will be responsible for all agency functions and executing the company’s vision and strategy, as well as overseeing sales and marketing. Melissa will also support Benchworks’ market development initiatives focusing on the Boston, Washington, DC, and Virginia markets.

Previously, Melissa held the title of Senior Vice President at Benchworks. As a member of the leadership team, she helped manage the company’s daily operations, implementing business procedures and controls, and supervised the project management staff. Melissa also directed Benchworks’ pharmaceutical/life science segment serving clients including Shire, West, and Supernus.

Melissa commented on the appointment, saying “I am looking forward to working closely with Thad Bench (CEO) and Renee Bench (Chairman) to help execute the overarching vision and strategy for the Benchworks marketing business unit. This is an exciting time. With our recent acquisition of Safe Chain Solutions and the creation of our consulting division, we continue to expand our support for our pharmaceutical and life science clients as well as build a solid portfolio of middle-market accounts.”

Benchworks CEO Thad Bench said “Melissa’s impressive accomplishments and dynamic work style have earned her this important role. I am confident that under her leadership, Benchworks will flourish and continue to meet and exceed our clients’ expectations as I shift my responsibilities to managing an expanding number of business units. I look forward to working closely with Melissa in her new position.”

Melissa earned a BA in Business and Economics from Washington College. She also completed the Project Management Certificate Program from the University of Delaware.

Benchworks, a comprehensive marketing services firm headquartered in Chestertown, MD, was founded in 1991. The company specializes in the design, production, and launch of complete marketing and branding services. Additional Benchworks operating units include Benchworks Consulting, Safe Chain, and a licensed products division. Clients include a wide variety of companies in the pharmaceutical, beverage, manufacturing, marine, tourism, and education industries in North America and Europe.

 

For more information, visit www.benchworks.com, or call 800-536-4670.

 

Spy Chat: Downtown Chestertown Association with Kristen Owen

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Like her famed real estate intuition, out-going Downtown Chestertown Association (D.C.A.) president and realtor Nancy Mcguire hit the bullseye with her recruitment of Chesapeake Bank’s Kristen Owen to succeed her last year. As if sent from the central casting office, Kristen combines an almost perfect profile of the new era of leadership the town is experiencing.

Kirsten, who grew up in Chestertown, comes to her volunteer position with ten years of banking experience, a young family, and a first-hand knowledge of the challenges on High Street. That’s a hard combination to beat when being asked to lead an organization dedicated to supporting the downtown merchants in a town of 5,00o.

In her interview with the Spy, Kristen talks candidly about downtown Chestertown and its various challenges, and equally frank about the future of DCA’s I-sign on Cross Street. But in the end, she also expresses as genuine conviction that Chestertown is finding a way to move forward in a very exciting fashion.

This video is five minutes in length

Maryland Film Tax Credits at Risk; No More Wedding Crashers for Shore

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Frank Underwood may be looking for a new base of operations.

Maryland tax credits worth millions have kept “House of Cards” in the state for three seasons, but a real-world budget crunch may mean Kevin Spacey — who plays the political villain — and rest of the cast and crew will head elsewhere.

A state legislative committee held a public hearing Tuesday on the feasibility of Maryland’s film production tax credit, most notably associated with the Netflix series.

Hannah Byron

Hannah Byron,, assistant secretary for the Maryland Division of Tourism, Film and the Arts

Film productions are exempt from state tax when purchasing goods or services related to the production, but the state is reaping only 10 cents for every dollar it gives up, according to a report from the state’s Department of Legislative Services.

The report concludes that the credit does not promote long-term economic growth for Maryland and recommends that the General Assembly allow the film production activity tax to expire as scheduled on July 1, 2016.

Legislative Services staff members who contributed to the report were present at the meeting to defend their recommendations.

“The current funding amount is about $25 million (per year). But is that what optimizes economic benefits to the state?” said Robert Rehrmann, a policy analyst who contributed to the report.

Film production tax credits have become more popular in the last decade, with 37 states and the District offering some form of incentive in 2014.

In a letter to Gov. Martin O’Malley last year, Charlie Goldstein, senior vice president of MRC Studios, which produces “House of Cards,” warned that if the show does not receive tax credits, they will look to film in another state.

In total for all productions, Maryland has provided or set aside $62.5 million in tax credits from fiscal year 2012 through 2016.

Supporters of the tax say the film industry promotes economic growth in Maryland by bringing in jobs and more local spending, and that we need to offer at least $25 million in credits each year to be competitive with what other states offer.

“For many small businesses in the state, it has made the difference for keeping their doors open, the difference in hiring new staff, or the difference in making capital improvements to their property, ” said Hannah Byron, assistant secretary for the Maryland Division of Tourism, Film and the Arts.

While some small businesses are reaping the benefits, the Department of Legislative Services’ report estimates that Maryland is only getting a 10-cent return for every dollar of tax credits provided to the film industry.

Byron countered that another independent study calculated a return of $1.03 — or 3 percent — on every dollar in credits, and that the Legislative Services report did not focus enough on indirect benefits of production, such as the potential for film tourism.

Still, the report has a few more criticisms, one being that 96.5 percent of all credits are going to only two productions — “House of Cards” and HBO’s “VEEP.”

The report also points out that a few jurisdictions benefit much more than others, and also that the productions are short-lived and will not add any permanent benefit to the economy because jobs provided will be temporary.

Michael Davis, a scenery builder in Maryland for over 27 years, disagreed with this idea Tuesday in testimony before the committee.

“I worked on project after project, sometimes more than one at a time, and other times no work at all … and the pay is at least 30 percent more per hour and we will work 50 to 60 hour per week during a production,” Davis said.

However, Rehrmann reminded, the report shows less than one-tenth of 1 percent of Marylanders are employed by the film industry.

The decision on whether to extend or modify the current tax credit will have to be made by the General Assembly by July 1 and could be influenced by Gov.-elect Larry J. Hogan Jr.

“We’ll take a look at (the report) and have something to talk about later … there’s one governor at a time,” Hogan said Tuesday.

By Dani Shae Thompson

Benchworks Acquires Safe Chain Solutions

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Thad Bench, CEO; Pat Boyd, Executive Director/Partner; Charles Boyd, President

Thad Bench, CEO; Pat Boyd, Executive Director/Partner; Charles Boyd, President

Benchworks is pleased to announce that it has acquired Safe Chain Solutions, a rapidly growing pharmaceutical drug wholesaler serving hospital pharmacies nationwide, with a combination of cash and stock. Safe Chain Solutions has a pharmaceutical distribution facility in Cambridge, Maryland, a sales office in Miami, Florida, and a digital development office in Nagpur, India. Safe Chain Solutions also has a vibrant Third Party Logistics (3PL) business serving a wide variety of clients in the beverage, apparel, and manufacturing sectors.

“The acquisition of Safe Chain Solutions demonstrates our continued commitment to the life science industry,” said Benchworks CEO Thad Bench. “The pharmaceutical division at Safe Chain which is currently engaged in supplying hospital pharmacies will eventually be able to produce patient starter kits and support Rx sample programs for our existing and new pharmaceutical clients upon regulatory approval. This is a significant step in growing our revenues and adding strategic capacity to our family of companies.”

President of Safe Chain Solutions Charles Boyd commented, saying, “We are excited to be aligned with Benchworks and look forward to continuing our rapid growth and expanding our service offering. We could tell almost immediately that Benchworks’ and Safe Chain’s cultures meshed very well.”

Benchworks, a comprehensive marketing services firm headquartered in Chestertown, Maryland, was founded in 1991. The company specializes in the design, production, and launch of complete marketing and branding services. Clients include a wide variety of companies in the pharmaceutical, beverage, manufacturing, and education industries in North America and Europe. Additional Benchworks operating units include Benchworks Consulting and a licensed products division. For additional information, please visit www.benchworks.com or call 800-536-4670.