Last Month's Report on Las Vegas Valley Economic Conditions
Housing Conditions:
- Foreclosure/Short Sale Listings (12/15/2010): Total Listings 15666; Short Sales: 7817, 50% of all listings; Bank Owned Listings: 3409, 22% of all listings. Short sale and REO listings consume 72% of total listings
- New Home Sales (October 2010, units sold): 305 Year Change -30.8% (excl condo conversions, highrises)
- New Home Sales (October 2010, median price): $208,000 Year Change +1.5% (excl condo conversions, highrises)
- Existing Home Sales (October 2010, units sold): 3266 Year Change -23.2%
- Existing Home Sales (October 2010, median price): $119,000 Year Change: -4.8%
- New Home Permits (SOctober 2010): 280 Year Change -21.6%
- Rental Rate (MLS Monthly Average Dec 2010): $1184/month
My analysis: Distressed listings (foreclosures and short sales) are 72% of total listings up 2% from last month. This figure is slowly going up after many months of decline. Credit markets must be watched as underwriting guidelines continue to tighten. Condos are barely financeable. Resale sold units and pendings remain impressive from the tax credit highs. Inventory IS increasing as pent up demand from first time buyers was exhausted from the tax credit offering that expired June 30, 2010. 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 (November 2010): 4283, Year Change +6.3%
- Total Employment (November 2010): 793,400 Year Change -2.6%
- Unemployment
Rate (November 2010) 14.3%, Year Change +1.8%
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 -133,500 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 still painful however the total employed numbers have remained stable for a year.
Tourism/Gaming Conditions:
- McCarran Airport Total Passengers (October 2010): 3,584,819 Year Change +2.0%
- Gaming Revenue (October 2010): $757,486,673, Year Change +12.5%
- Visitor Volume (October 2010): 3,623,315, Year Change +5.3%
- Convention Attendance (October 2010): 419,076, Year Change +19.9%
- Hotel/Motel Occupancy (October 2010): 84.9% Year Change +2.3%
My analysis: 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 very encouraging.
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
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