The Stat Pack
The 12-month moving average (12MMA) of the Reno-Sparks headline unemployment rate dropped to 6.1% in February, inflation-adjusted wages are now at their highest ever recorded levels, and February marked 58 consecutive months with rising retail sales on a year-over-year (YOY) basis.
The Reno-Sparks MSA has now seen 12 straight months of YOY visitation growth, and Washoe County 12MMA Y-O-Y gross gaming revenue saw growth in February of 2.9% which represents the 14th consecutive month of improvement.
The issue of housing affordability in the region may be one that soon needs addressing if development does not catch up with demand. The median resale price in Reno-Sparks rose again in February and reflected a 13.6% jump compared to February 2015.
The Reno-Sparks office vacancy rate declined to 15.5% in Q4, 2015 on a four-quarter moving average basis, its lowest value since Q1, 2008. This indicates that the Reno-Sparks Spec Office market is improving but continues to be a bit sluggish.
The RCG Employment Index 12-month moving average (“12MMA”) for Reno-Sparks increased 0.2 points to 97.2 in February, a 1.2-point rise from 96.0, recorded in February 2015. February’s index continues the upward trajectory started in 2011 and we expect this trend to continue. It peaked at 99.8 in December 2008 and the trough of 89.6 occurred in January 2010.
Reno-Sparks job growth on a 12-Month Moving Average (“12MMA”) declined to 3.8% in February. However, the rate of growth was up from 3.4% recorded in February 2015. The rate’s lowest level in the last 10 years occurred during the 3-month period ending in December 2009 (-9.3%). The highest was 3.7% back in December 2006.
The 12MMA of the headline unemployment rate dropped to 6.1% in February compared to 7.2% in February 2015. The unemployment rate has been steadily improving for 4 years.
Total construction jobs in the Reno-Sparks MSA increased to 13,033 in February, on a 12MMA basis, and was up a significant 10.6% from the 11,783 jobs recorded in February 2016. In February, construction jobs represented 5.8% of the job-base. Construction jobs in the MSA peaked at 24,042 in August 2006 on a 12MMA basis, when the industry accounted for 11.1% of all jobs.
February’s 12MMA visitor total for Reno-Sparks increased by 1.2% Y-O-Y to 395,461. Visitation to the region has dramatically lagged what has happened in Las Vegas, but has picked up. It has now seen 12 straight months of YOY growth. The 12MMA peak occurred in May 2004, when 467,904 visitors came to the region. The highest annual grow rate occurred in January 2013, when visitor volume grew 5.8%. The Reno-Sparks hospitality industry continues to face challenges.
Washoe County 12MMA Y-O-Y gross gaming revenue growth in February (+2.9%) represents the 14th consecutive month of improvement, with total revenue at $65.1 million.
Gaming revenues peaked in June 2006 at $89.4 million. On an annual growth rate basis, growth peaked at 5.5% in June 2006.
Like Clark County, retail sales in Washoe County have been steadily climbing, reaching $596.9 million in January, up 7.6% on a 12MMA basis compared to January 2015. Taxable sales are steadily moving back to their peak on a nominal basis (not inflation-adjusted). This makes 58 (4.8 years) consecutive months with rising retail sales on a Y-O-Y basis. As the chart shows, Washoe’s taxable sales growth is beating the state average on a percent growth basis.
MLS home resales in the Reno-Sparks area declined to 521 units in February on a 12MMA basis. This metric has risen in 11 of the last 15 months and home sales are in record-high territory, but may be leveling off. The median price rose to $283,935 (12MMA) in February. That was a 13.6% jump compared to February 2015. By comparison, the Las Vegas median resale price in February increased by 10.9% to $193,166. The issue of housing affordability may be a looming one that market and policy makers will have to start addressing.
The Housing Opportunity Index for the Reno-Sparks MSA declined in Q4, 2015 from 55.9 in Q3 to 55.1, on a four-quarter moving average basis. The U.S. index increased from 63.7 to 63.8 during the same period. On a Y-O-Y basis, the Reno-Sparks index fell 2.5 points from 57.6 in Q4, 2014.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 58.4.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in Clark County, assuming standard mortgage underwriting criteria.
According to Colliers International, the Reno-Sparks office vacancy declined to 15.5% in Q4, 2015 on a four-quarter moving average basis, its lowest value since Q1, 2008. This indicates that the Reno-Sparks Spec Office market is improving but continues to be sluggish. By comparison, the Las Vegas Spec Office vacancy rate was 18.7% in Q4, on a 4QMA basis.
The Q4, 2015 industrial vacancy rate of 9.6% increased from Q3, 2015 (9.2%), but remains under the 10% stabilized rate. In comparison, the Las Vegas Industrial vacancy rate was 5.2% in Q4, on a 4QMA basis.
The 12MMA of the average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA reached $823 in February, up by 11.2% from $740 in February 2015. Additionally, the inflation-adjusted 12MMA wage of $728 recorded in February represented a jump of 10.9% over the $657 recorded in February 2015. In February, Reno-Sparks’ average weekly real earnings were 12.9% higher than the Las Vegas average of $645. Inflation-adjusted wages are now at their highest ever recorded levels in the Reno-Sparks MSA.
Average weekly hours worked in the Reno-Sparks labor market are bucking the state and national trends and have sharply turned up over the last year. This is the result of the “Tesla-effect” and the region’s ongoing and focused economic development efforts. Weekly hours reached 34.8 in February, up 1.7 hours compared to 33.1 hours in February 2015. The 8-year peak occurred in October 2008 at 37.1 hours, while the trough (8-year) of 32.5 hours occurred in September 2014.
According to AAA, on March 30, 2016, the average price per gallon for regular unleaded gasoline in Reno-Sparks had declined by 12.5% from $2.97 a year prior to $2.60. The price has increased $0.37 (16.6%) compared to February 30.
The most recent population estimates from the Nevada State Demographer were released for 2015. They show that the region’s employment-to-population ratio for last year rose 1 percentage-point over 2014. The current E-P ratio still remains 1.3 points below the 2008 peak.
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