Economic Conditions for the Las Vegas Valley May 2010
Housing Conditions:
- Foreclosure/Short Sale Listings (6/15/2010): Total Listings 10548; Short Sales: 4559, 43% of all listings; Bank Owned Listings: 2146, 20% of all listings. Short sale and REO listings consume 63% of total listings
- New Home Sales (May 2010, units sold): 426 Year Change +18.3% (excl condo conversions, highrises)
- New Home Sales (May 2010, median price): $186,784 Year Change -12.7% (excl condo conversions, highrises)
- Existing Home Sales (May 2010, units sold): 3513 Year Change -2.3%
- Existing Home Sales (May 2010, median price): $125,000 Year Change: -3.8%
- New Home Permits (May 2010): 395 Year Change +28.2%
- Rental Rate (MLS Monthly Average June 2010): $1410/month
My analysis: Distressed listings (foreclosures and short sales) are 63% of total listings. This figure is slowly going up after many months of decline HOWEVER REO is emerging as a new life form (investor trustee sale purchase flips.) Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Resale sold units and pendings remain impressive. New Home Sales & Permits are steadily increasing as inventory in the Las Vegas Valley remains tight. The rental market is softening due to all the investor/first time buyer combination of activity. This adds more supply and creates less demand.
New Residents/Employment Conditions:
- New Residents (May 2010): 3755, Year Change -12.2%
- Total Employment (May 2010): 801,300 Year Change -3.7%
- Unemployment
Rate (May 2010) 14.1%, Year Change +2.8%
My analysis: The tourism, gaming and convention numbers need to improve before these numbers improve. New Resident Count will continue to plummet if no new jobs are created. Economists are hoping that City Center brings tens of thousands of new jobs. The Las Vegas Valley has lost -132,000 jobs since April 2008. I am not optimistic that City Center can pull us out of this slump. (see Tourism/Gaming conditions below!) City Center is expected to draw in anywhere from 10,000-15,000 new jobs. Unfortunately around 8500 construction workers from the project will be unemployed so that really boils down to only 2500-7500 new jobs. Unemployment rate is painful yet again. While these numbers are looking VERY bad, I am seeing some changes in the Tourism/Gaming Sector which will help this sector in the long run if it is sustainable!!
Tourism/Gaming Conditions:
- McCarran Airport Total Passengers (April 2010): 3,385,504 Year Change -5.0%
- Gaming Revenue (April 2010): $689,977,541, Year Change -6.1%
- Visitor Volume (April 2010): 3,496,935, Year Change -0.0%
- Convention Attendance (April 2010): 426,697, Year Change +2.9%
- Hotel/Motel Occupancy (April 2010): 84.0% Year Change -4.0%
My analysis: After rising in double digits for one month, Convention attendance is in the black again. This sector (tourism) needs to see some serious price corrections before we see a comeback. Corporate credit is not coming back any time soon. It will be hard to get convention attendance back up without corporate credit. Glad to see regular tourists are making their way here with the imbalance of the other numbers to replace the convention attendee numbers. Gaming numbers are back in the negative but thankfully not in the double digits like they have been in the recent past.
Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation. Information deemed reliable but not guaranteed. My analysis is my humble opinion
