EEC’s Industry Dynamics Reports-Housing Market

This week, we are introducing the Single-Family Housing Index for the Reno MSA.  The full Housing Dynamics Report can be found on our website by following the link provided below.  Some of the findings of the index for 3Q 2015 are summarized below:

-Reno MSA Single-Family Housing Index, based on seasonally and inflation adjusted data, increased by 0.57% between 2Q and 3Q 2015, totaling five straight quarters of continued growth in residential housing activities in the region.

-Year-over-year, the Index increased 4.73% in 3Q 2014 compared to 3Q 2015.

Clink here for the full copy of the Single Family Housing Dynamics Report-Reno MSA for January 2016.

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EEC’s Industry Dynamics Reports-Business Activity

This week, we are introducing the Business Activity Index for the Reno MSA.  The full Business Activity Dynamics Report can be found on our website by following the link provided below.  Some of the findings of the index for 3Q 2015 are summarized below:

-Reno MSA Business Activity Index, based on seasonally and inflation adjusted data, increased 1.51% between 2Q and 3Q 2015, totaling 13 straight quarters of growth in business activities in the region.

-Year-over-year, the Index increased 4.65% between 3Q 2014 and 2015.

Clink here for the full copy of the Business Activity Dynamics Report-Reno MSA for January 2016.

EEC’s Industry Dynamics Reports-Construction

In addition to the Leading Economic Index for the overall Reno MSA economy, we are introducing three specialized indices: Construction, Business Activity, and Single-Family Housing.  These are areas that drive the Reno MSA economy and deserve special attention.  These indices, along with a discussion of index trends, will be updated quarterly as part of our Industry Dynamics Reports.

This week, we are introducing the Construction Index for the Reno MSA.  The full Construction Dynamics Report can be found on our website by following the link provided below.  Some of the findings of the index for 3Q 2015 are summarized below:

-Reno MSA Construction Index, based on seasonally and inflation-adjusted data, decreased by 7.63% between the 2Q and 3Q 2015, indicating a decline in construction activities in the region.

-However, year-over-year, the Index grew by 11.99% for 3Q 2014 and 2015.

-Prior to the recent decline, the Index experienced 11-quarters of growth between 3Q 2012 and 1Q 2015.

Clink here for the full copy of the Construction Dynamics Report-Reno MSA for January 2016.

 

Introducing the Reno MSA Leading Economic Index

Economic indicator data published in our previous blogs is useful in understanding changes occurring in each individual area, but do little to provide a picture of the overall economy and its changes over time.  Economic indices, which combine multiple indicators into a single number, can represent either the current state of the economy (coincident index) or future economic changes (leading index), providing a clearer picture of the economy and its trends.

Ekay Economic Consultants, Inc., in cooperation with the Center for Regional Studies at the University of Nevada, Reno, is pleased to announce the release of its Leading Economic Index and Coincident Economic Index for the Reno MSA area.  The indices are referred to as RLI and RCI, respectively.  Latest results of the two indices are summarized below, along with a graph of their historic changes.  For more details about index indicators, values, and methodology, please click here.

-Reno MSA Leading Index (RLI) increased between September and October 2015 (0.48%), indicating expected growth in the regional economy over the next 6-12 months.  This is the 41st consecutive increase in the index since May 2012.

-Reno MSA Coincident Index (RCI) increased between October and November 2015 (0.24%), (most recent data), verifying that the current economy continues to expand.

Index 1-16

Reno MSA Leading Economic Index and Coincident Economic Index

Washoe County Economic Indicators-March/April 2015

Having missed the March indicator update, our April update combines information for the two months.  Indicators for these periods would have included data for January and February of 2015.  For some indicators, March 2015 data is also available and is also included in this entry.

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 estimates from Department of Employment, Training, & Rehabilitation (DETR), January 2015 employment was 206,942, a 4.9% increase (9,600 jobs) over January 2014.  February 2015 employment was  210,724, a 5.5% increase over February 2014 (11,000 jobs).  March 2015 employment was  211,478, a 5.8% increase (11,600 jobs) over March 2014.

The March 2015 employment level of 211,478 represents an increase of 26,700 jobs since the lowest level of employment post-2005 (January 2011, 184,800 jobs), but remains 16,600 jobs less than the region’s peak employment (December 2006, 228,100 jobs).

Industries with the largest employment gains between March 2014 and March 2015 included Trade, Transportation, and Utilities (1,300 jobs), Education and Health Services (1,000 jobs), Leisure and Hospitality (900 jobs), Government (800 jobs), Manufacturing (700 jobs), and Construction (500 jobs).

Industries with a reduction in jobs during this period were the Professional and Business Services (-100 jobs) industry; and Finance and Insurance (-100 jobs), Retail (-400 jobs), and Miscellaneous Manufacturing (-300 jobs) sub-industries.

employment

[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% and in 2014 by 0.45%.  Gaming revenue increased by 12.4% between January 2014 and January 2015 and 3.4% between February 2014 and February 2015.  With a 9% increase between December 2013 and 2014, we have experienced three consecutive months of gaming revenue growth.

gaming revenue

Washoe County Taxable Sales

Through January 2015, Washoe County taxable sales have now experienced 25 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.  Between January 2014 and January 2015, taxable sales for the County increased by 12.5%.

The industries with the largest portion of taxable sales in Washoe County continued to report growth in sales between January 2014 and January 2015.  These include Motor Vehicle and Parts Dealers with sales of $72.7 million (21.0% increase), Food Services and Drinking Places with sales of $79.9 million (14.7% increase), and General Merchandise Stores with sales of $52.5 million (9.1% increase).

taxable sales

Washoe County Single-Family Home Values and Sales

According to the Northern Nevada Regional MLS, the existing single-family median home value of $255,000 (January 2015) represents a 15.9% increase over January 2014, but a 3.8% decrease over December 2014 value of $265,000. December’s median value of $265,000 was the highest median since April 2008 ($275,000), but is still $95,000 less than the peak of January 2006 ($360,000).

According to the Northern Nevada Regional MLS, 364 existing single-family homes were sold in the Washoe County in January 2015, compared to 352 homes sold in January 2014 and 514 homes in December 2014.

home values

Reno-Sparks MSA Commercial Market Vacancies

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%.  4QMA fell to 17.2% in the 4th Quarter of 2014 and 17.1% in the 1st Quarter of 2015.

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.  4QMA increased slightly to 8.3% in the 4th Quarter of 2014 before a slight decrease to 8.2% in the 1st Quarter 2015.

commercial vacancy

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).

empl

[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.

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.