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

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Washoe County Economic Indicators-January 2012-Part 1

We are finally moving into 2012 with the majority of our data and the start of 2012 is not acting like an economic recovery.  This blog covers data for General, Tourism and Employment economic indicators, to be followed by the Real Estate indicators next week.

As always, 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 January 2012 (current period) is compared to December 2011 data (previous period) and January 2011 (same period previous year).

General

Data for population, assessed value and personal income is the same as in the previous reports.  Washoe County taxable sales increased by 34.6% between November and December 2011, though much of this increase is likely due to the holiday season.  What is more important is the 6% between December 2012 and 2011 taxable sales, indicating a growth in holiday spending over the previous year.

Taxable gaming revenue continues to decrease, falling by 6.2% between December and January.  Gaming revenue also fell between January 2012 and the same month in 2011, showing a continuing declining trend.  In further negative news, the consumer price index increased slightly between November and December 2011 and also compared to December of previous year, making our purchases a little more expensive.

Tourism

As bright as our tourism outlook was in December, we seemed to have expended our tourism attraction abilities by January.  Tourism data shows declines across all indicators, including visitor counts, available rooms, occupied rooms, room occupancy rates and average room rates when compared to the previous period (December 2011) and the same month last year (January 2012).  Let’s hope this is a one-time occurrence due to the lack of snow or other non-recurring conditions.

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

Compared to the January 2011 (December 2010 for unemployment claims), the Washoe County January 2012 employment picture is much brighter.  While the labor force number decreased slightly, we had a significant decrease in the number of unemployed, unemployment rate and new unemployment claims.  The average weekly wage also increased from the same period last year from $816 to $849 (Q3 2011 to Q3 2010).

Compared to the previous period (December 2011), however, the number of unemployed, unemployment rate and new unemployment claims increased.  The average weekly wage was the only indicator that increased, though this indicator is lagging behind other indicators (latest available for third quarter of 2011).

Washoe County Economic Indicators-November/December 2011-Part 2

Residential

Washoe County’s residential real estate market has seen some positive changes, though the overall outlook is still bleak.  New home sales decreased in December 2011 compared to the previous month and the same period last year.  Existing home sales, however, increased by 75.7% from the previous December and 10.5% from the previous month.  Median single family and condo/townhouse closing price also increased, a 2.6% increase from November for single family homes and 5.8% for condos.  Days single properties remained on the market also increased for single family homes, but decreased for condos/townhouses.

Notice of defaults saw an increase between November and December 2011, as did notices of sales.  Trustees deeds and REO listings decreased during compared to the previous month and previous year.

Note: Notices of default data from the previous year should be disregarded as this data was impacted by restrictions placed on financial institutions regarding issuing these notices.  The number of notices of default is expected to grow as institutions figure out ways to continue issuing these notices.  This may also impact REO listings and notices of sale, as fewer notices of default are issued.  This does not represent the performance of the real estate sector, but rather the impact of these restrictions.

Commercial

The commercial real estate market performed well and poorly, depending on the sector.  The industrial property sector saw a decrease in vacancies, however, this decrease came as a result of reduced rental rates.  The office sector also saw some decrease in its vacancy rates, though not as significant as that for industrial properties.  Office retail rates grew slightly during this time.  Retail properties fared the worst in December.  Retail vacancy rates grew from the previous year and previous month, while retail rental rates declined, a combined negative impact on the sector.

Conclusion

The health of the Washoe County economy remains unclear.  Taxable sales and gaming revenue increased from the previous year, but not from the previous month.  This could be in part due to seasonality associated with the holiday period.  The tourist sector is a bright spot for Washoe County, with positive tourism numbers over the previous year.  This may be due to an improvement in the national economy.  Employment data also shows much improvement from the previous year.

Residential real estate indicators are also monthly positive, though there remains a slowdown in the new homes market.  On the commercial property side, industrial and office sectors are seeing some improvement, while the retail sector continues to struggle.  There is some hope for growth in this sector as taxable sales increase.

Overall, Washoe County is seeing more green numbers than in previous months, and if growth in these indicators continues, it will bode well for our recovery.

Washoe County Economic Indicators-November/December 2011-Part 1

Our last blog focused on data for October 2011.  Since then, both November and December data has become available.  Since the blog attempts to cover latest economic data available, we will skip November data and focus on December values, with the exception of taxable sales and taxable gaming revenue, data for which is available through November 2011 only.

As always, 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 December 2011 (current period) is compared to November 2011 data (previous period) and December 2010 (same period previous year).

General

Data for population, assessed value and personal income is the same as in the previous report; please see the October indicators for a detailed discussion.

County taxable sales decreased by 9.3% from October, but increased by 5.3% from November of previous year.  Taxable gaming revenue continued to decrease, falling between October and November of 2011, though revenue did increase by 1.4% from November of previous year.

Consumer price index increased by 2.75% between December 2010 and 2011, but fell slightly between November and December 2011.

Tourism

Washoe County’s tourism outlook as of December 2011 is bright, with all indicators showing positive growth.  Area visitors, available rooms, occupied rooms, resulting room occupancy rates, and average room rate increased between November and December 2011 and December 2010.

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

The employment picture for Washoe County was less positive.  Labor force numbers continue to decline, the County’s labor force numbers decreased by 2.36% between December 2010 and December 2011.  While the number of unemployed workers has also declined significantly since December 2010, between November and December 2011, this number grew by 2.27%.  This resulted in an unemployment rate of 11.9%, which is 14.4% lower than in December 2010, but 2.3% higher than in November.

No new data for new unemployment claims and average weekly wage is available.

Please see next week’s blog for residential and commercial real estate market indicators and conclusions regarding the meaning of indicator changes.

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 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.

Washoe County Economic Indicators-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.

*Previous period refers to the same period in the previous year.  For example, second quarter 2011 data is compared to second quarter 2010 data.

Washoe County’s retail, office and industrial properties show a lower vacancy rate than during the same quarter last year.  This is likely in part due to the decreasing rental rates which reduce rent costs and allow businesses to expand into larger properties.  Vacancy rates remain high, especially in the office segment, which had a vacancy rate of 12.2% in the second quarter of 2006.