Economic Conditions for the Las Vegas Valley October 2009
Housing Conditions:
- Foreclosure/Short Sale Listings (11/15/2009): Total Listings 10393; Short Sales: 4475, 43% of all listings; Bank Owned Listings: 2243, 22% of all listings. Short sale and REO listings consume 65% of total listings
- New Home Sales (October 2009, units sold): 441 Year Change -44.7% (excl condo conversions, highrises)
- New Home Sales (October 2009, median price): $205,000 Year Change -16.0% (excl condo conversions, highrises)
- Existing Home Sales (October 2009, units sold): 4328 Year Change +35.5%
- Existing Home Sales (October 2009, median price): $125,000 Year Change: -30.6%
- New Home Permits (September 2009): 396 Year Change -14.1%
- Rental Rate (MLS Monthly Average August 2009): $1265/month
My analysis: Distressed listings (foreclosures and short sales) are 65% of total listings. Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Resale sold units and pendings remain impressive. Builders cannot compete with bank owned listing prices, thus sales remain lackluster. 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 (October 2009): 4705, Year Change -16.2%
- Total Employment (October 2009): 848,300 Year Change -6.7%
- Unemployment
Rate (October 2009) 13.0%, Year Change +68.8%
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 -78600 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.
Tourism/Gaming Conditions:
- McCarran Airport Total Passengers (September 2009): 3,336,007 Year Change -3.5%
- Gaming Revenue (September 2009): $774,055,720, Year Change -9.3%
- Visitor Volume (September 2009): 3,350,862, Year Change -3.7%
- Convention Attendance (September 2009): 401,319, Year Change 12.2%
- Hotel/Motel Occupancy (September 2009): 83.2% Year Change -1.3%
My analysis: Convention attendance rose in the double digits this month after a -58% year over year for month prior. We shall see if this is a fluke or sustainable. 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 and convention business is big business and those numbers MUST increase for jobs to increase and for our entire economy to stabilize. Any convention attendance decrease of over 10% is extremely painful to this economy and all the overbuilt convention space. It will be interesting to see what hotel/motel occupancy boils down to after city center opens with almost 6,000 new rooms online. Anyone else seeing price corrections in store for the Las Vegas Strip?
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
Fantastic analysis.
That 64% distressed SOLD statistic speakes to the market.
Opportunity for some home buyers and lost homes for many others.
Lenn: Thanks for your comment! That number is for listed. Wanna hear sold percentages - 82% is short (16%) and REO (66%). While we see positive things like no inventory and sales going through the roof, it's all price driven. Have we hit bottom? IDK!
Hi Renee, I'm hoping we've hit the bottom and this coming year we'll make a strong comeback. It's either that or starve right. LOL By the way, nice presentation.
Renee,
Pretty hard figures; here's hoping the employment oppotunities increase soon.
Great stats. Its nice to see whats going on in other areas.
Renee - The employment stats are hard to look at. The presentation however is excellent. 35% increase in single family is amazing
Renee, I have heard that Los Vegas was hard hit. Looking at your numbers, I would say so. You did a great presentation. I am going to keep the faith that 2010 is going to be a better year.
Nathan (can I call you TLS?) I hope that we ALL have hit bottom. I have certainly grown weary of the economy and our market!
Tom: I will definitely drink to that!
Trisha: THanks!
Claude: Very difficult to look at! It is definitely reality and it's stuff that investors need to know!
Diane: Hard hit is an understatement, eh? Pretty much all sectors have received or are in the midst of a "correction"
Renee - you certainly have a handle on your Las vegas market conditions. We see similar percentages of distressed sales in a couple of communities inland adn to the south of where I am - less so along the coast.
Jeff
Wow, those stats are amazing, and a bit disturbing. I'm here in sleepy old Pittsburgh and last week we were ranked 2nd in the nation for Home Price and 5th for Home Sales Rank by Forbes Maagzine. 4th fastest-recovering city in the nation. Things here are looking pretty bright. I can't promise the same amount of sunshine but we have plenty of water and the summers are beautiful and green.
Renee what a great job you did...clients will see a lot of value and Good luck!
Jeff: I have kind of noticed that the coastal areas have a little immunity through reading market reports everywhere!
Christa: Believe it or not, I love sleepy old Pittsburgh even though I have never been there. There is a casino out there that is helping keep the place my husband works for afloat during these rough times! That area must be doing well!
Tim: Thanks!
Kyle: While I love unadulterated opinions (as I have my own) that one was just a little unfair, even though it is half true. Plenty of people enjoyed watching the demise of "Sin City" ..........until they realized they owned stocks/bonds/mutual funds/401Ks etcccccc related to gaming, tourism or mortgage backed securities. Unfortunately for your sake, LV will survive in the form of price reductions, much like the real estate market. I would guess that 9/10 people would take a free plane ticket, hotel room, food, and entertainment money for a weekend to LV if they were offered the chance. LV just needs to find that price point where it all balances.
It's a long haul back up the hill for all of us, the real estate market will only turn around when the job market changes for the better. Unfortunately Las Vegas jobs are dependant on people coming to visit you, if the job market remains bad other places they will not becoming to Las Vegas on vacation. I doubt whether the new City Center attraction will change anything....
Unfortunately for Las Vegas and Phoenix you had the biggest and fastest gains in prices when the boom was going on now you are paying the price.
Alan: BINGO in your assessment! The only thing that can change anything is some major price corrections on food, airfare and lodging. As far as paying the price (and I appreciate how you put it so eloquently and diplomatically,) Today I did two CMAs. Both were original owners (rare). One bought in '88 and the other bought in '94. Both were in the hole 30-50K from when they bought brand new from the builder. Falling hard is another understatement!
Hi Renee - You are the market report Queen, this is awesome information and I'm so glad you got featured, Congrats!!!
Amazing numbers....and very impressive analysis. Thanks for the snapshot.
Renee - Real estate investors pay for this type of analysis and information and here you are working hard to let people know free of charge! Folks, if Renee works this hard for the general public, think of hard hard she will work for you in a contract negotiation! Nice job!
Renee, I love your stats! I was in an office meeting this morning and learned abut some new stats I can use in our MLS System. I need to reserach that link you sent on how to do charts. Same instructions for the chart above as for the other charts you have posted? Love them!
Renee, Wow employment really took a dive, looks like conentions are sneak up little by little, hopefully that will change the unemployment situation. Tough times. We are just starting to see positve changes in the market. Hang in there!! Vegas needs you!!
What a report. You are the Las Vegas real estate expert!
....and this week the NASCAR Championship Week in Las Vegas!!!!! Kudos to NASCAR for removing this "crowning of this year's Champion" from NYC and holding it somewhere that appreciates the sport.....
Nice overview of the market. If there is a hope in all of this is that the popluation continues to rise and people need to stay somewhere.
Lets hope the market rebounds to a sustainable level shortly and with your knowledge and information i am sure you are poised to take advantage of this when it does.
Thanks for the stats.
Renee - This is interesting to see the change in the your area.
Renee,
New resident count is still halfway decent. The other thing is that how many people are leaving town because of the weak job market.
Renee - Those figures are unbelievable - 65% of the listings are distressed??? Unreal. I may be coming out to Las Vegas in February. If so, I'd love to get together and have lunch with you!
Great post Renee, it certainly looks like things are looking up for your market. LV has had a rough go of late.
Hi Renee...Love your Visual Stats, easy to understand as the Graph says it all..sales are ahead of Listing :O))
That convention attendance graph certainly is interesting. I would not have thought that it had such ups and downs.
Renee - What a great gathering of killer statistics; perfectly to the point! Though it is a little odd that convention attendance is up over 12%, but room occupancy is down 1.3%... unless people are sharing rooms at the convention to cut down on costs.
Renee:
You are right -- my comment from Dec. 2 was over the top. And now it's gone. I think I was having a bad day or something, although I don't remember specifically what was going on that day. But I do remember a LOT of frustrating conversations with Wells Fargo around that time ... =)