Washoe County Economic Indicators-October 2011-Part 2

Continuing with Washoe County’s economic indicators for October 2011, we now look at residential and commercial real estate data.

Residential

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.

Commercial

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.

Conclusion

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.

Washoe County Gaming Revenue Grew in November

According to today’s press release from the Nevada Gaming Control Board, Washoe County gaming win increased by 1.95% in November 2011 from the previous November (2010).  Gaming win is estimated at $53.5 million in November 2011 and $52.5 million in November 2010.

November 2011 Reno gaming win increased by 0.68% from November 2010, while Sparks win increased by 6.26%.  North Lake Tahoe saw a drop in gaming win of 0.4% during this period, while the balance of Washoe County grew by 5.28%.  Fiscal year-to-date (July 1, 2011 to November 30, 2011) gaming win for Washoe County shows a 3.37% decline over the previous period.

Statewide, gaming win increased by 7.06%, with Clark County’s gaming win growing by 7.83% over November of previous year.  The biggest statewide growth was in the Boulder Strip area of Clark County, which increased by 12.44% over previous November.  South Lake Tahoe saw a decline in its gaming win of 6.92%.  Statewide fiscal year-to-date gaming win increased by 1.09% over the previous period.

Washoe County taxable gaming revenue, which is based on adjusted gaming win numbers, increased by 1.4% during the same period.  This is the highest monthly gaming revenue increase since October 2010, when gaming revenue grew by 3.11% as shown in the graph below (click on the graph for details).

Graph: Washoe County Gaming Revenue-% Increase over Same Month Previous Year

Given some growth in taxable sales and other sectors, the sign that the gaming industry in Washoe County has reached bottom and will experience some positive growth in the future would be welcomed by all.

For more information, visit the Nevada Gaming Control Board website at http://gaming.nv.gov/.

Washoe County Economic Indicators-October 2011-Part 1

After a bit of a break, EEC’s economic indicators for Washoe County are back.  As in previous posts, the indicators are for Washoe County (unless otherwise indicated as NV or US).  Indicators include general, tourism, employment, and residential and commercial real estate areas.  Data is provided for the latest available period, the period immediately prior to the latest period and the data for the same period the year before. For example, Visitor Count data, available for October 2011 (current period) is compared to September 2011 data (previous period) and October 2010 (same period previous year).

General

General Washoe County indicators show a decrease in population from 2010, which is in part due to the outmigration of unemployed workers from the area in search of employment.  This decrease is lower than the 3.5% drop in population from 416,632 in 2009 to 402,001 in 2010.

State personal income increased from the same period last year (third quarter of 2010), but fell slightly between the second and third quarters of 2011.  Taxable gaming revenue continues to decrease, falling between October 2010 and 2011 and September to October 2011.  Assessed values also decreased from the previous year (fiscal year 2010-11).

Consumer price index increased between October 2010 and 2011 and September to October 2011.  This increase means that goods and services are becoming more expensive, which coupled with a decreasing personal income has a negative impact on local households.  This, however, did not stop local purchasing, as taxable sales in Washoe County increased by almost 15% from October of previous year and almost 6% from September 2011.

Tourism

Washoe County’s tourism outlook as of October 2011 was also less than encouraging.  Visitor counts, occupied rooms and resulting occupancy rates were down both from the same period last year and the previous period (September 2011).  The number of available rooms increased slightly between September and October, but this increase had an insignificant impact on the tourist market.  The average room rate did increase slightly from October 2010, but fell by a large amount from its September 2011 level.

Note: Tourism indicators are highly seasonal, changing from month to month.  As a result, comparing the current period to the previous period may not be a good indicator of growth or decline, the comparison of the same period in current and previous year is more accurate.

Employment

Employment in October was a bright spot in Washoe County’s economy.  While Washoe County lost some of its labor force (this could be related to outmigration of County residents), the number of unemployed persons and the resulting unemployment rate fell considerably since October 2010.  Similarly, new unemployment claims statewide also decreased from August of the previous year.

Another positive change was the growth in the average weekly wage, which increased by 1% from the second quarter of 2010 and 2.4% from the first quarter of 2011.

Washoe County’s real estate market has also experienced some significant changes during this period.  These indicators will be discussed in the next post, along with a summary of all economic indicators.