Economic Conditions for the Las Vegas Valley July 2008
Housing Conditions:
- Foreclosure/Short Sale Listings (9/22/2008): Total Listings 20,515; Short Sales: 6473, 31.6% of all listings; Bank Owned Listings: 5699, 27.8% of all listings. Short sale and REO listings consume 59.3% of total listings
- New Home Sales (July 2008, units sold): 645 Year Change -48.7% (excl condo conversions, highrises)
- New Home Sales (July 2008, median price): $259,763 Year Change -17.4% (excl condo conversions, highrises)
- Existing Home Sales (July 2008, units sold): 3169 Year Change +50.8%
- Existing Home Sales (July 2008, median price): $210000 Year Change: -24.5%
- New Home Permits (July 2008): 1037 Year Change +20.7%
- Rental Rate (MLS Monthly Average August 2008): $1464/month
My analysis: Resale is in a stable market. New home sales may have a decent pop in upcoming months with the permits being pulled rising 20.7%. The Rental Market is still a landlord's market but units leased and average price went down. Fire sale prices remain attractive to both long term investors and buyers tired of paying rent. Distressed listings (foreclosures and short sales) are 59.3% of total listings. Credit markets must be watched, it's hard to remain optimistic with all the bad news on Wall Street.
New Residents/Employment Conditions:
- New Residents (August 2008): 5621, Year Change -26.2%
- Total Employment (July 2008): 917,400 Year Change -0.3%
- Unemployment
Rate (July 2008) 6.8%, Year Change +33.3%
My analysis: The rising unemployment rate concerns me. New resident count is slightly alarming also. We are not seeing many new jobs on a month to month basis to keep up with new residents so that could be the reason why growth is not as much as normal.
Tourism/Gaming Conditions:
- McCarran Airport Total Passengers (July 2008): 3,923,469 Year Change -8.6%
- Gaming Revenue (July 2008): $819,682,985, Year Change -15%
- Visitor Volume (July 2008): 3,601,022, Year Change -5.0%
- Convention Attendance (July 2008): 264,197, Year Change +0.6%
- Hotel/Motel Occupancy (July 2008): 87.2% Year Change -5.2%
My analysis: Rising gas costs & flight cuts may have hurt our incoming visitor count. Convention attendance has remained stable BUT this is an area that needs to be watched as corporate credit doesn't run as free as it use to. Gaming revenue is a huge concern. When gaming revenue takes hits that big: layoffs happen and corporate bonuses disappear. Gaming revenue is the bread and butter for our economy.
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.
Renee - I would think that the price of oil and it's relationship to the cost of travel has really hurt your city more than some others. My guess is that the unemployment rate is somewhat tied to that cost. You are right, the jobs market and the housing market go together.
Renee - I would think that the price of oil and it's relationship to the cost of travel has really hurt your city more than some others. My guess is that the unemployment rate is somewhat tied to that cost. You are right, the jobs market and the housing market go together.
Renee - this is a greatg analysis, combining statistics and opinions. It's always interesting to see how thing tie together, and to compare what is happening on one city versus another. I was amazed ata how much hew building there was downtown when I was there this past weekend for REBlogWorld.
Sorry we didn't get to meet! :) I arrive late Thursday night and left early Saturday morning. Next time...
Jeff
great analysis Renee! Thanks for your opinion, its refreshing to read your blog
Renee - Excellent posting packed with such incredibly useful information! I think that while we are currently feeling the pinch due to the overall economic climate, I think once the country gets a little more confidence again, this place is going to have a significant boost in business. In these times, people are just itching for the release....and what better place to have that release than the place we're lucky enough to call home!
I don't know....many of the pundits say that the housing recovery will be a slow, gradual process. I just can't help from feeling that once the all important confidence is restored in the economy, I think we're going to see a spike here and I think it's going to be fast. Vegas just seems to be one of those "all or nothing" kind of places sometimes. I have nothing to back that up other than gut feeling.
BTW, I vote that this blog should get a gold star.....just sayin' :-)
Renee, I can't believe gaming revenue is down. I didn't think that was possible. ;o)
Renee I love how you have presented your Las Vegas NV Valley market report. You see so many that provide statistics but do not tell you what all the date means. You have done a great job analyzing the current market.
Finally!
Is it me, or does the free fall always feel longer than the rebound?
Katrina
Great reporting Renee. The lower end of the market is indeed brisk...the high end...on the slow side. The scary thing is that when I talk to these REO agents - their stream of foreclosures being brought to market seems endless.....
Renee, I think there's something hidden in the employment numbers. Yes, unemployment is up, but total employment has only dropped .3%, in spite of the massive economic turmoil. Jobs that had been lost, in hard hit industries like construction for example, are obviously being nearly offset by new jobs here. With over 5500 a month coming in, the unemployment has risen. We haven't begun the hiring peak that starts in the 4th quarter and carries though next year and beyond.
So why are these people still coming here? Could it be they're leaving the many areas much harder hit, that are losing total employment and population, and lining up for those new jobs that are on the way? I would think that's a strong possibility.
Great analysis. Sad to read that 31 percent are short sales.Hope the market improves.