Coldwell Banker Premier Realty

LAS VEGAS KEY ECONOMIC INDICATORS


COLDWELL BANKER PREMIER REALTY
Posted: March 19, 2015 by Jesse Olive

MARCH 2015

Taxable sales are reading near the prior highs of 2007. December, the most recent observation, posted a very strong, seasonal spike of nearly $3.6 Billion. December 2007 was the prior high.

Many local retailers appear to be greatly improved from the recession era and we even notice some gaps in retail supply in some key areas, providing developers some new opportunities. There have been some major new retail options in the Valley including Downtown Summerlin, Linq and the newly opened Grand Bazaar Shops.

Gross gaming revenue has yet to return to prior highs and is under-performing relative to our other indicators by a signi¬cant amount. Fortunately, local resort operators have adapted quickly to shifting consumer tastes and have diversi¬ed away from a gaming heavy mindset. While we saw a lot of loss leaders in the past on the hotel and food and beverage side in an e ort to court gamblers, the model is to maximize revenues for the total property, including hotel rooms and dining. In addition, nightlife and beach clubs have been massive revenue generators for the strip properties. The challenge with weaker than expected gaming revenues is that the state’s lawmakers are feeling pressured to fill the tax void with other forms of taxes.

2014 set a record for visitors to the region with over 41 million persons. December, the most recent print, was 5.5% above December of 2013.

Clearly, visitor volume has demonstrated a strong recovery from the recession and Las Vegas strip operators continue to grow the market. SLS Las Vegas recently opened on the north end of the strip at the former Sahara Hotel & Casino. The property cost $415 million to complete and contains 1,600 rooms. Genting is also moving forward on it’s massive north strip project.

Employment continues to grind higher and we are up about 2.7% year-over-year. Although we are nearly 5.6% o of our high, we are encouraged by new hotel construction, industrial projects and some very organic growth that we are seeing in both the southwest and northwest valley. We are also aware of some larger ¬rms that are setting up operations in Southern Nevada.

Population has been one of the crazy stories of the past couple of decades. Clark County NV has been one of the fastest growing areas of the United States, with record growth through the 1990’s and into the 2000’s. After a brief decline during the last recession, the Las Vegas area has since returned to positive growth and it is estimated that the Valley broke over 2 million people back in 2012.

The Center for Business and Economic Research, which provides population forecasts for the local governments, expects the Valley to exceed 2.5 million people by 2028.

Clark County Residential Meter Hookups Electric meter hookups are a proxy for new household formation. After taking a pause during the recession, we have observed marked improvement, corresponding roughly with measured population growth. In addition, 6,107 new homes were built and closed in the Valley in 2014.

Single Family Home Vacancy Rate - Clark County NV Vacancy rates are a good indicator of the health of both the local residential market and the general economic health of the Valley. Job loss and foreclosure instigated a major spike in vacancy rates during the recession, which then lingered at historically very high levels. Today, foreclosures are far less frequent and job growth is positive, although we have a long ways to go. Vacancy rates have drifted back down from the high in 2011, a large, noteworthy improvement.

Home ownership rates in the past decade have been artificially high, supported in a major part by easy lending. Investors have filled that void and have purchased and leased at many once, vacant properties. In addition, some home buyers have recovered from Financial strain and are once again engaged in the housing market.

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