Economic Conditions for the Las Vegas Valley November 2009
Housing Conditions:
- Foreclosure/Short Sale Listings (12/15/2009): Total Listings 10332; Short Sales: 4474, 43% of all listings; Bank Owned Listings: 2253, 22% of all listings. Short sale and REO listings consume 65% of total listings
- New Home Sales (November 2009, units sold): 581 Year Change -4.3% (excl condo conversions, highrises)
- New Home Sales (November 2009, median price): $200,000 Year Change -19.5% (excl condo conversions, highrises)
- Existing Home Sales (November 2009, units sold): 3774 Year Change +46.8%
- Existing Home Sales (November 2009, median price): $126,000 Year Change: -27.5%
- New Home Permits (November 2009): 285 Year Change -58.3%
- 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 (November 2009): 4031, Year Change -9.4%
- Total Employment (November 2009): 843,100 Year Change -6.7%
- Unemployment
Rate (November 2009) 12.0%, Year Change +53.8%
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 -83800 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 (November 2009): 3,234,705 Year Change +0.1%
- Gaming Revenue (October 2009): $673,403,952, Year Change -11.1%
- Visitor Volume (October 2009): 3,449,232, Year Change +1.6%
- Convention Attendance (October 2009): 349,383, Year Change -8.3%
- Hotel/Motel Occupancy (October 2009): 82.6% Year Change -1.4%
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 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
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