Economic Conditions for the Las Vegas Valley September 2009

Economic Conditions for the Las Vegas Valley August 2009

 Housing Conditions:

• Foreclosure/Short Sale Listings (9/15/2009): Total Listings 11018; Short Sales: 4718, 43% of all listings; Bank Owned Listings: 2379, 22% of all listings. Short sale and REO listings consume 65% of total listings
• New Home Sales (August 2009, units sold): 396 Year Change -47.8% (excl condo conversions, highrises)
• New Home Sales (August 2009, median price): $206,123 Year Change -18% (excl condo conversions, highrises)
• Existing Home Sales (August 2009, units sold): 3833 Year Change +25.6%
• Existing Home Sales (August 2009, median price): $122,000 Year Change: -39%
• New Home Permits (August 2009): 413 Year Change -17.6%
• Rental Rate (MLS Monthly Average August 2009): $1255/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 (August 2009): 5140, Year Change -8.6%
• Total Employment (August 2009): 846,900 Year Change -6.7%
• Unemployment Rate (August  2009) 13.4%, Year Change +91.4%

My analysis: The tourism, gaming and convention numbers need to improve before these numbers improve.  New Resident Count will go down 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 -80,000 jobs since April 2008.  I am not optimistic that City Center can pull us out of this slump.  (see Tourism/Gaming conditions below!)Unemployment rate is painful.

Tourism/Gaming Conditions:

• McCarran Airport Total Passengers (July 2009): 3,557,509 Year Change -9.3%
• Gaming Revenue (July 2009): $729,888,886, Year Change -10.9%
• Visitor Volume (July 2009): 3,520,400, Year Change -2.2%
• Convention Attendance (July 2009): 249,692, Year Change  -5.5%
• Hotel/Motel Occupancy (July 2009): 84.2% Year Change -3.4%

My analysis:   There is marked improvement in this sector from last month HOWEVER there is a dispairity with gaming numbers = people are coming but not playing!  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.

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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© 2009 Renee Burrows AHWD - SRES - SRS - Las Vegas Real Estate Market Report Blog

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