Washoe County Economic Indicators-February 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), December 2014 employment is 204,800, a 0.8% increase (1,600 jobs) over December 2013.  The December 2014 employment is higher than for any December employment total since 2008, but the December 2014 employment is 1,700 jobs less than the peak in 2014 (September = 206,500) and 900 jobs less than November.

The December 2014 employment level of 204,800 represents an increase of 20,000 jobs since the lowest level of employment post-2005 (January 2011, 184,800 jobs), but remains 23,300 jobs less than the region’s peak employment (December 2006, 228,100 jobs).

On an average annual basis, 2014’s average of 202,775 is 3.2% higher than 2013’s average of 196,425.  The annual average employment growth of 3.2% in 2014 is the highest growth since 2006 (3.7%).

Industries with the largest employment gains between December 2014 and December 2013 include Professional & Business Services (2,500 jobs), Education & Health Services (600 jobs), State Government (300 jobs), Leisure & Hospitality (100 jobs), and Financial Activities (100 jobs).

Industries with a reduction in jobs during this period are Construction (-600 jobs); Local Government (-500 jobs); Wholesale (-300 jobs), Retail (-200 jobs); Transportation, Warehousing, & Utilities (-200 jobs); Federal Government (-100 jobs), and Other Services (-100 jobs).

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

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%.  Although December 2014 gaming revenues posted a 9.0% increase over December 2013, the annual revenue declined 0.5% in 2014 and emphasizes the unpredictable nature of gaming revenue.

 gaming

Washoe County Taxable Sales

Through November 2014, Washoe County taxable sales have now experienced 23 straight months of positive year-over-year growth since January 2013.  During this period taxable sales have increased between 3.6% (Aug-14/Aug-13) and 13.1% (Dec-13/Dec-12), with six of the months posting gains in the double-digits.

The industries with the largest taxable sales in Washoe County continued to report growth in sales between November 2013 and November 2014.  These include Motor Vehicle and Parts Dealers with sales of $76.53 million (13.4% increase), Food Services and Drinking Places with sales of $75.21 million (5.1% increase), and General Merchandise Stores with sales of $69.18 million (1.7% increase).

sales

Washoe County Single-Family Home Values and Sales

According to the Northern Nevada Regional MLS, the existing single-family median home value of $265,000 (December 2014) represents a 14.2% increase over December 2013, but only a 0.2% increase over November 2014.  November’s median value of $265,000 is the highest median since April 2008 ($275,000), but is still $95,000 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 $265,000 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, 514 existing single-family homes were sold in the Washoe County in December 2014, compared to 487 homes sold in December 2013 and 470 homes in November 2014.

For the year, a total of 5,905 single-family homes were sold in 2014, a 1.7% decrease over 2013 when 6,009 single-family home were sold.

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

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.

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