Washoe County Economic Indicators-January 2015

Reno/Sparks MSA[1] Employment

Monthly Reno-Sparks MSA employment trends (year over year) have seen consistent positive employment growth since March 2012.  According to preliminary estimates from Department of Employment, Training, & Rehabilitation (DETR), November 2014 employment is 206,200, a 1.6% increase (3,300 jobs) over November 2013.  The November 2014 employment is higher than for any November employment total since 2008, but the November 2014 employment is 300 jobs less than the peak month (September) in YTD 2014.

The November 2014 employment level of 206,200 represents an increase of 21,400 jobs since the lowest level of employment post-2005 (January 2011, 184,800 jobs), but remains 21,900 jobs less than the region’s peak employment (December 2006, 228,100 jobs).

Industries with the largest employment gains between November 2014 and November 2013 include Professional & Business Services (3,200 jobs); Education & Health Services (500 jobs); State Government (200 jobs); Leisure & Hospitality (100 jobs); Transportation, Warehousing, & Utilities (100 jobs); and Financial Activities (100 jobs).

Industries with a reduction in jobs during this period are Wholesale (-300 jobs), Retail (-200 jobs); Manufacturing (-100 jobs), Construction (-100 jobs); Federal Government (-100 jobs), and Other Services (-100 jobs).

empl jan

Washoe County Gross Gaming Revenue

Despite the downturn in Washoe County gaming industry’s performance in recent years gaming remains an important employer and revenue generator.  Of the top 20 employers in Washoe County, eight are Casino Hotels.  Excluding government, school districts, and higher education, three of the top five employers are Casino Hotels.

After six years of gross gaming revenue decline between 2007 and 2012 (year over year), gaming revenues increased in 2013 by 3.5%.  Through November 2014, however, gaming revenue has declined 1.3% compared to the same period in the previous year, and down 0.2% year-over-year for the month.  Emphasizing the unpredictable nature of gaming revenue, the year-over-year change for October is +6.8%.

gam jan

Washoe County Taxable Sales

Washoe County taxable sales have now experienced 22 straight months of positive year-over-year growth since January 2013.  During this period taxable sales have increased between 3.6% (between August 2013 and 2014) and 13.1% (between December 2012 and December 2013), with six of the months posting gains in the double-digits including October 2014 (10.8%).

The industries with the largest taxable sales in Washoe County continued to report growth in sales between October 2013 and October 2014.  These include Food Services and Drinking Places with sales of $81.59 million (10.5%); Motor Vehicle and Parts Dealers with sales of $70.68 million (1.0%); and General Merchandise Stores with sales of $58.23 million (3.7%).

sale jan

Washoe County Single-Family Home Values and Sales

According to the Northern Nevada Regional MLS, the existing single-family median home value of $264,450 (November 2014) represents a 17.3% increase over November 2013, and a 0.6% increase over October 2014.  November’s median value of $264,450 is the highest median since April 2008 ($275,000), but is almost $100,000 less than the peak of January 2006 ($360,000).

Average appreciation rates for the Reno-Sparks region (calculated between 1990 and 2001) are 1% per quarter, or 4% per year.  At this average appreciation rate, the median home value in the 4th Quarter 2014 would have been $276,235.  As a result, the current home value of $264,450 remains under-valued by more than $10,000, although the comparison is somewhat skewed by the lack of homes currently sold in the higher price ranges compared to the mid-2000s.

According to the Northern Nevada Regional MLS, 470 existing single-family homes were sold in the Washoe County in November 2014, compared to 468 homes sold in November 2013 and 492 homes in October 2014.

Through November, a total of 5,391 single-family homes have been sold in 2014, compared to a slightly higher number of 5,522 during the same period in 2013.

The largest amount of existing single-family homes sold through MLS occurred in 2012 (6,016), almost double than those sold in 2007 (3,307) when the Great Recession began.

homes jan

Reno-Sparks MSA Commercial Market Vacancies

As vacancy data are reported quarterly, no new data has been published since our December blog.  As a result, the below entry is a copy of the December information for the 3rd Quarter 2014.

Using quarterly data available from Collier’s International Reno office, vacancy rates for office space are available starting in the 1st quarter 2002; vacancy rates for industrial properties are available starting 1stquarter 2006.  As data are shown using a 4-quarter moving average (4QMA), the below graph shows office vacancy rates starting 4th quarter 2002 and industrial vacancy rates starting 4th quarter 2006.

The office market vacancy rate peaked in the 3rd quarter 2010 with a 4QMA of 21.6%.  Office vacancy rates declined to a post-recession low of 18.0% in the 3rd quarter 2012 before climbing to 19.2% by the 3rdquarter 2013.  A year later, by the 3rd quarter of 2014, vacancy rates fell to a 4QMA level of 17.4%.

The industrial market vacancy rate peaked in the 2nd quarter of 2010 with a 4QMA level of 13.7%.  Rates fluctuated during the next few years before reaching a new peak in the 4th quarter of 2012 with a 4QMA level of 13.4%.  By the 3rd quarter 2014, 4QMA levels fell to 8.0%, compared to the 4QMA level of 11.8% a year prior, 3rd quarter 2013.  This is driven by the increased demand for industrial space and supported by increases in manufacturing employment.

Dec-comm

Again, we would like to thank the Center for Regional Studies at the University of Nevada, Reno for help with data and analysis.

[1] The Reno/Sparks MSA includes Washoe and Storey Counties.

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