The Stat Pack
The Reno-Sparks trend lines for this month’s metrics look good in every regard except for gas prices. Fuel prices in western states continue to be the highest in the U.S., with every state in the region landing on the top ten list of most expensive markets. Nevada has the sixth highest gas prices behind Hawaii, California, Alaska, Washington, Oregon. Will rising fuel rates put a damper on regional travel to the Silver State? Will changing trade policies affect the Nevada economy, both north and south? We’ll be watching.
The RCG Employment Index 12-month moving average (“12MMA”) for Reno-Sparks ticked up by 0.2 points in December to 98.2 and was up 1.2 points from the 97 recorded in December 2015. The Index is now less than 2 points off from the peak. We expect the general upward trend will continue, maintaining the trajectory that started in 2011. The index peaked 11 years ago in December 2005 at 99.8, essentially 100. The trough of 89.6 occurred in January 2010.
Reno-Sparks job growth on a 12MMA in December remained at 4%. The rate of growth is up 0.2 points from December 2015, when it was recorded at 3.8%. The lowest rate of growth in the last 10 years occurred in December 2009 (-9.3%). The region has surpassed its previous high mark of 3.7% achieved in December 2006.
Additionally, the 12MMA of the headline unemployment rate again fell by 0.1 points to 5.1% in December. When compared to the December 2015 headline unemployment rate of 6.3%, this November’s rate was 1.2 percentage-points lower. The unemployment rate continues to improve steadily and is approaching rates seen before the Great Recession.
The U-3 and U-6 unemployment rates for Nevada were both down in the 4th quarter of 2016. The U-6 rate fell by 0.3 points from 12.5% in Q3 to 12.2% in Q4. The U-3, or headline rate, also fell by 0.3 points from 6.2% to 5.9%. Nevada still has the third highest U-6 rate in the nation, beating only New Mexico and Alaska. In terms of the U-3 rate, Nevada is not doing much better, but is out of the bottom five. It is now tied with Illinois for the 7th highest U-3 rate in the nation.
Out of 76,850 construction jobs recorded for December in the state of Nevada, 14,008 are in the Reno-Sparks MSA (12MMA). This is 8.8% more than the 12,875 jobs recorded the previous year in December 2015. The latest stats show that 6.3% of the region’s job-base was in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. At that time, the industry accounted for 11.1% of all jobs. The construction sector continues to recover since bottoming out in February 2012 when there were only 8,792 construction jobs.
In December the 12MMA visitor total for Reno-Sparks fell by -0.05% from November. However, on a YOY basis, visitation is up 3.1%. When compared to Las Vegas, visitation to the Reno market continues lagging. The region has now seen YOY growth in visitor volume every month for 2 straight years at an average rate of 2.3%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe County. The highest annual growth rate occurred in January 2013, when visitor volume grew 5.8%. Though there has been some improvement, the Reno-Sparks hospitality industry continues to face challenges.
Washoe County’s 12MMA YOY gross gaming revenue has improved every month for 2 consecutive years with growth in December of 4.3%, bringing total revenue up to $67.5 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.
The Q4, 2016 median sales price of $307,500 for single-family home resales in the Reno-Sparks area represents a 7% jump YOY, but a -1.4% decrease compared to Q3, 2016. The Q4 median price is now approximately $9,028 (3%) greater than the $298,472 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year.
MLS home resales in the Reno-Sparks area increased to 542 units in December on a 12MMA basis. After reaching record-high territory, home sales now appear to have leveled off. The median sales price rose to $303,742 (12MMA) in December, an 8.4% jump from December 2015. By comparison, the Las Vegas median resale price in December increased by 6.4% to $202,774.
According to Colliers International, Reno-Sparks Office vacancy continued its steady decline to 14% in Q4, 2016 on a 4QMA basis, its lowest value since Q4, 2007. The Reno-Sparks Spec Office market has been improving, albeit slowly. By comparison, the Las Vegas Spec Office vacancy rate was 6.2 percentage-points higher at 20.2% in Q4, on a 4QMA basis.
The Q4, 2016 Industrial vacancy rate of 9.7% is a drop of 0.6 points from Q3, 2016 (10.3%). After five consecutive quarters of increasing vacancy, decreases in Q3 and Q4 brought the Industrial vacancy back below the 10% stabilized rate. Although a large amount of new product has recently come to market, there appears to be healthy demand in the Reno-Sparks MSA for Industrial space. Still, the Las Vegas Industrial vacancy rate is significantly lower at 5.2% in Q4 on a 4QMA basis.
As of February 2, 2017, the average price per gallon for regular unleaded gasoline in Reno-Sparks saw an increase of $0.37 from $2.38 a year prior to $2.75. When compared to the previous month the price of unleaded fuel increased by $0.06 (2.2%).
According to AAA, “Continual growth in the number of U.S. oil rigs and the increased drilling it implies are raising expectations for a climb in domestic oil production. Additionally, increased U.S. crude oil production coupled with lower driving demand has kept downward pressure on the national average price at the pump, which has fallen for 21 consecutive days.
Gas prices on the West Coast continue to be the highest in the country, with every state in the region landing on the top ten list of most expensive markets: Hawaii ($3.07), California ($2.80), Alaska ($2.74), Washington ($2.73), Oregon ($2.52) and Nevada ($2.47).”
Per the World Gold Council, the end-of-month spot price of gold (ounce of pure gold) rose by 0.54% in January to $1,254 on a 12MMA basis. On a YOY basis, the price of gold increased by 10.1%, the largest YOY increase since September 2012. The price of gold peaked in December 2012 at $1,678. The price of gold had been increasing on a YOY basis for the past 6 consecutive months.
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