Continuing with Washoe County’s economic indicators for October 2011, we now look at residential and commercial real estate data.
Washoe County’s residential market has been heavily impacted by the recession. With Nevada leading the nation in the number of foreclosed and distressed properties, Washoe County saw its share of lost home values and “underwater” properties. While the rest of the nation may be recovering, latest Washoe County residential indicators show no improvement.
New home sales, however low; have declined over the last year, along with sales of existing homes. With this also came a decline in closing prices for single family homes and an increase in the number of days both single family and multifamily properties spend on the market. The only positive change was in the price of condos and townhomes which increased by 4% from September 2011.
It is difficult to draw conclusions regarding notice of default and REO listing data as this portion of the market has been subject to changing legislation, which may explain the significant decrease in the number of default notices.
Washoe County’s commercial market has also been impacted by the recession, though it took longer for this impact to materialize. Similar to the residential market, with little new construction, it is the existing properties that indicate the health of this market.
Washoe County’s office and industrial properties show a lower vacancy rate compared to the same quarter last year. Industrial properties rental rate increased slightly from the previous year and previous quarter, which coupled with the decreasing vacancy rate, may be a good sign for the industrial market, provided this trend continues.
Some of the office property vacancy rate decrease may be attributed to the declining rental rate, which decreased slightly from the previous year and remained the same compared to the previous quarter.
For the retail component, vacancy rate increased between the first and second quarter of 2010, but remained lower than the rate during the same quarter in the previous year. A decline in the rental rate for retail properties may be responsible for some of the vacancy rate change.
Overall, the employment and commercial real estate markets are two areas where Washoe County saw positive growth in October 2011. Sustained positive employment growth can help ease areas of concern for Washoe County by increasing the amount of disposable income in the region and improving consumer confidence. Visitation, purchasing and home purchase decisions will benefit from additional area and national income and confidence that the economy is improving.
Though far from a total recovery, long-term employment growth can be a step in the direction of improvement of the current economic situation. It is likely, however, that major changes, including tax system and industry diversification may be needed to achieve a meaningful economic recovery in the future.