Washoe County Current Economic Review

Brian Bonnenfant with the Center for Regional Studies recently (April 21, 2015) did a presentation for the Reno City Council providing an economic overview of the region including some impacts of the Tesla project.  The presentation also includes a discussion of various economic indicators for the region, as well as population, housing, and employment projections over the next five years.  A copy of the presentation is below:

Economic Overview-Washoe County 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

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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.

Washoe County Economic Indicators-December 2014

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), October 2014 employment is 205,300, a 2.0% increase (4,000 jobs) over October 2013.  The October 2014 employment is higher than for any October employment total since 2008, but the October 2014 employment is 1,200 jobs less than the September 2014 total.

The October 2014 employment level of 205,300 represents an increase of 20,500 jobs since the lowest level of employment post-2005 (January 2011, 184,800 jobs), but remains 22,800 jobs less than the region’s peak employment (December 2006, 228,100 jobs).

Industries with the largest employment gains between October 2014 and October 2013 include Professional & Business Services (2,500 jobs); Leisure & Hospitality (600 jobs); Education & Health Services (600 jobs); Retail (400 jobs); State Government (400 jobs); Construction (200 jobs); Transportation, Warehousing, & Utilities (200 jobs); and Financial Activities (100 jobs).

Industries with a reduction in jobs during this period are Manufacturing (-400 jobs), Wholesale (-300 jobs), Federal Government (-100 jobs), Local Government (-100 jobs), and Other Services (-100 jobs).

Dec-empl*It should be noted that DETR revised September 2014 job estimates from 210,508 as posted in our November blog to 206,500 as reflected in the above graph.

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 October 2014, gaming revenue has declined 1.3% compared to the same period in the previous year.  Emphasizing the unpredictable nature of gaming revenue, the most recent month-over-month change (October) is +6.8%.

Dec-gamingWashoe County Taxable Sales

*It should be noted that Nevada Department of Taxation had not released September 2014 taxable sales data as of the date of this blog.  As a result, we will again discuss August 2014 data.

Washoe County taxable sales experienced positive growth over a 20-month period since January 2013.  During this period taxable sales increased by as high as 13.06% between December 2012 and December 2013.  August 2014 sales increased by the lowest amount during this period of 3.58% over August 2013.

The largest taxable sales industries in Washoe County continued to report growth in sales between August 2013 and August 2014.  These include Food Services and Drinking Places with sales of $89.15 million in August 2014 and growth of 5.1%; Motor Vehicle and Parts Dealers with sales of $87.99 million and growth of 5.4%; and General Merchandise Stores with sales of $62.84 million and growth of 2.0%.

Dec-sales

Washoe County Existing Single-Family Home Values and Sales

According to the Northern Nevada Regional MLS, the existing single-family median home value of $262,750 (October 2014) represents a 22.2% increase over October 2013, and a 9.9% increase over September 2014.  October’s median value of $262,750 is the highest median since June 2008 ($263,000), 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 and 4% per year.  At this average appreciation rate, the median home value in the 3rd Quarter 2014 would have been $273,574.  As a result, the current home value of $262,750 remains under-valued by $10,000, although 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, 492 existing single-family homes were sold in the Washoe County in October 2014, compared to 546 homes sold in October 2013 and 502 homes in September 2014.

Through October, a total of 4,921 single-family homes have been sold in 2014, compared to a slightly higher number of 5,054 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.

Dec-homes

Reno-Sparks MSA Commercial Market Vacancy

Having combined single-family home sales and values data into a single entry, we were left with room for another indicator.  Since we have been covering the residential real estate market, it made sense to also focus on the commercial market, especially in terms of 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 1st quarter 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 3rd quarter 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.

Signs of Recovery: Washoe County Building Permits Are On the Rise

Even before Tesla announced it will build a giga-factory in Storey County, creating as many as 6,500 direct jobs and possibly 16,000 indirect jobs (according to a report by the Governor’s Office for Economic Development), Washoe County’s real estate market was showing signs of recovery.  One of the biggest indicators of growth in the real estate market is the number and valuation of building permits in the area.  Building permits are required to construct new buildings and to make certain improvements to existing properties.

These permits are issued by local governments prior to construction and are a good leading indicator of actual construction to take place in the future.  Washoe County’s growth in building permits since the recession is a good sign of the region’s economic recovery.

Single family permits in Washoe County peaked in 2005 with 5,535 permits and a permit valuation of $957.7 million.[1]  As the graph below shows, the number of permits and valuation declined significantly for all areas of Washoe County (Reno, Sparks, and unincorporated Washoe County which includes Incline Village, Sun Valley, Wadsworth, etc.).  The number of permits hit its lowest level in 2010 with 477 permits issued, a 91% decrease in the number of permits over 2005.

Building permits increased by 156% between 2010 and 2013 (the last full year for which data is available), from 477 to 1,221 permits.  Building permit data for 2014 is available through September only; using historical growth in permits between October and December, we estimate approximately 1,450 building permits will be issued in 2014.  This is a 19% increase over 2013.  Building permit valuation followed a similar trend to the number of issued permits.  While the 1,450 permits expected for 2014 is much lower than the peak of 5,535 in 2005 or even the years prior to the real estate boom, four years of growth since 2010 indicate a positive trend for this real estate market component.

 sf permits*2014 data through September 2014 only, full year data is estimated using historical end of year percentages.

While the single family market saw a strong positive growth trend through 2005, followed by a steep decline through 2010, and some recovery to date, the multi-family’s market’s path was a little more varied.  This is due to the less consistent nature of the multi-family market, where large projects in some years can shift trends significantly.  While the number of single family permits grew, multi-family permits dipped in 2003, before reaching the peak of 146 permits in 2004.  Building permit valuation did not peak until 2006 with a value of $103.3 million.

Like the single family market, building permits for multi-family units declined through the recession, though the bottom of the market was not reached until 2011 with only two permits issued in that year.  This was an almost 99% decrease in the number of permits issued over 2004.

The number of building permits issued for multi-family projects showed a consistent positive growth trend since 2011, with approximately 71 building permits estimated through 2014, an over 3,000% increase over 2011.  Building permit valuation is expected to reach $79.3 million in 2014.  While still below peak levels, the market has shown three years of significant positive growth, indicative of recovery.

mf permits*2014 data through September 2014 only, full year data is estimated using historical end of year percentages.

As with the multi-family market, large commercial projects in certain years can skew the market trend, making growth and decline trends less smooth.  However, overall, a trend similar to single family and multi-family markets is shown by the commercial market.  The number of commercial permits issued peaked in 2006 with a total of 457 permits with a value of $509.2 million.  Commercial permits did not hit bottom until 2010 when 99 permits were issued with a value of $53.4 million, a 78% decline in the number of permits over 2006.  Permit valuation decreased further in 2012 to $44.7 million, though a higher number of permits (140) were issued in that year.

The number of commercial building permits issued increased steadily since 2010, with approximately 242 permits estimated for 2014 with a value of $290.1 million.  This is a 144% increase in building permits since 2010.  While this amount is still below the peak number of building permits issued in 2006, the commercial market has experienced positive growth for four consecutive years, indicating a recovery in this market.

 comm permits*2014 data through September 2014 only, full year data is estimated using historical end of year percentages.

Overall, the steady growth in building permits and permit valuation in all three components of the real estate market show the increasing confidence by builders in the recovering economy and the increases in demand for new construction from residential and commercial buyers and lessees.  The growth in the number of building permits can be seen in the remainder of the real estate market.  Construction employment in Washoe County increased by 16% between 2011 and 2014 (1st Quarter) from 8,697 to 10,125.[2]  Median single family home prices also increased from $145,000 in the 1st Quarter 2012 (lowest price through recession) to $248,000 in 3rd Quarter 2014, an increase of 71%.[3]  While it is unlikely pre-recession, boom, construction levels will be reached in the near future, the market is recovering steadily, to the benefit of the region’s economy.

[1] All building permit data in this blog from City of Reno, City of Sparks, and Washoe County websites.

[2] Nevada Department of Employment, Training, and Rehabilitation.

[3] Center for Regional Studies, University of Nevada, Reno.

Washoe County Economic Indicators-November 2014

Reno/Sparks MSA[1] Employment

Monthly Reno Sparks MSA employment trends (year over year) have seen consistent positive employment growth since March 2012.  September 2014 employment levels reached 210,508, a 5.6% increase (11,208 jobs) over September 2013.  The September 2014 employment level was higher than for any September employment level since 2008, and higher than any monthly employment since October 2008.

The September 2014 employment level of 210,508 represents an increase of 25,708 jobs since the lowest level of employment post-2005 (January 2011, 184,800 jobs), but remains 17,592 jobs shy of the region’s peak employment (December 2006, 228,100 jobs).

Industries with the largest employment gains between September 2014 and September 2013 include Professional Services (3,300 jobs); Retail (1,400 jobs); Construction (1,000 jobs); Transportation, Warehousing, & Utilities (700 jobs); Education & Health Services (600 jobs); Leisure & Hospitality (300 jobs); and Financial Activities (100 jobs).  Industries with a reduction in jobs during this period were Government (-900 jobs); Manufacturing (-400 jobs); and Other Services (-100 jobs).

Nov Inds-Employment

Washoe County Taxable 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 sixteen months of taxable gaming revenue growth between April 2013 and July 2014, gaming revenue declined in August and September 2014 (-0.8% and -0.6% respectively) on a monthly moving average basis.  The recent declines in taxable gaming revenue, however, are much less significant than the monthly declines between 2009 and 2011.

Nov Inds-Gaming

Washoe County Taxable Sales

Washoe County taxable sales experienced positive growth over a 20-month period since January 2013.  During this period taxable sales increased by as high as 13.06% between December 2012 and December 2013.  August 2014 sales increased by the lowest amount during this period of 3.58% over August 2013.  It should be noted that the significant decreases in taxable sales for the balance of the state is likely due to the complexion of a number of large construction projects in smaller counties across the state, which generated taxable sales through the purchases of construction materials.

Nov Inds-Sales

The largest taxable sales industries in Washoe County continued to report growth in sales between August 2013 and August 2014.  These include Food Services and Drinking Places with sales of $89.15 million in August 2014 and growth of 5.1%; Motor Vehicle and Parts Dealers with sales of $87.99 million and growth of 5.4%; and General Merchandise Stores with sales of $62.84 million and growth of 2.0%.

Greater Reno Sparks Single-Family Home Values

The existing single-family median home value of $248,000 (3rd Quarter 2014) represents a 12.7% increase over the same period in 2013, and a 3.3%  increase over the 2nd Quarter of 2014.  On a year over year basis, home values in the Reno-Sparks region have increased for the last ten quarters after decreasing for the previous 23 quarters from the peak of $350,000 in the 4th quarter of 2005.

Average appreciation rates for the Reno-Sparks region (calculated between 1990 and 2001) are 1% per quarter and 4% per year.  At this average appreciation rate, the median home value in the 3rd Quarter 2014 would have been $273,574.  As a result, the current home value of $248,000 remains under-valued by almost $26,000, although comparison is somewhat skewed by the lack of homes currently sold in the higher price ranges compared to the mid-2000s.

Nov Inds-Home Values

The greater Reno-Sparks region differs from Washoe County by eliminating Incline Village (Lake Tahoe) and rural parts of the county.  Existing home values are significantly higher in Incline Village.

Washoe County Single-Family Home Sales

According to the Northern Nevada Regional MLS, 501 existing single-family homes were sold in the Washoe County area in September 2014, compared to 502 homes sold in September 2013.  Through September, a total of 4,429 single-family homes have been sold in 2014, compared to a slightly higher number of 4,508 during the same period in 2013.

Nov Inds-Home Sales

On a monthly basis, the median value for single-family homes is up 6.2%(September over September) with the current value at $239,000.  After peaking at $360,000 in January 2006, the highest recent median value reached $250,000 in June, July, and August 2014.  September values declined slightly from this trend.

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