Green, Baby, Green!

Southern Nevada is looking good in just about every economic metric. We’ve got charts galore this month, so scroll down and don’t hesitate to contact us with questions.
stat highlights

positive

emp index
After an uncommon pause in July, the RCG Employment Index’s 12-month moving average (“12MMA”) saw the usual 0.1-point monthly increase in August and, as expected, is back on the same trajectory we have been seeing since 2011. On a YOY basis, the Index is up 1.2 points from August 2016. It is now just 1.3 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate dropped 0.1-points to 5.1% in August 2017. The rate is 1.1 points below last August’s 6.2%. It reached its lowest level in October 2006 when it was just 4%. The region is hypothetically at “full employment”.
Last month the 12MMA rate of job growth in the Las Vegas MSA experienced an undesired change, dropping 0.1 points to 3.2% after 7 straight months at 3.3%. In August it fell no further, holding at 3.2% for the month. Job growth at the regional and national levels has been suffering from the same effect: According to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
adult working
Various sources often report employment-to-total population ratios, but that metric muddles the true ratio of workers to working-age population, because U.S. society is aging and the share of non-retirees is shrinking. Therefore, we present the employment-to-adult-working-age population ratio. This relates jobs the population cohort that is actually expected to work. It more accurately describes the employment situation in the region.
This chart shows that the region’s employment-to-adult-working-age population ratio for 2016 increased slightly from 2015. The most recent ratio is just short of the 2006 peak. It went as low as .49 during the depths (2010) of the Great Recession.
yoy construction
A strong housing market AND a recovering commercial market are bolstering construction in Las Vegas, leading to more construction jobs. In August 2017 the number of Southern Nevada construction workers rose by 6,342 (12MMA) from August 2016, an 11.7% increase that puts total construction jobs over 60,000. That makes 62 straight months (just over 5 years) and counting of construction job growth.
Construction jobs now represent 6.8% of the region’s job-base, a 0.2-point increase in the industry’s share from last month. August’s jobs are still well below the November 2006 peak of 108,833, when they accounted for 11.4% of all MSA jobs. However, the number of construction jobs was pushed to an artificial high during the real estate bubble. And, we are not likely to see those pre-recession construction job numbers in the foreseeable future. On the bright side, the industry is much more stable today than it was then.
visitor volume
On a 12MMA basis, the number of visitors to Clark County in August fell -0.17% from the previous month. When compared to August 2016, there was -0.3% YOY growth. This is the first time we’ve seen negative YOY visitor growth since April 2010. 2017’s eight-month visitor total of approximately 28.5 million is still just barely higher than 2016’s 28.4 million, with the differential continuing to shrink. Visitor growth has slowed considerably in 2017 with a YOY visitor growth rate average through August of only 0.4%.
The average rate of growth over the same period in 2016 was much better at 3.1%. We believe we have now entered a sustained period of slower but steadier growth. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
In August, Clark County’s convention attendance (on a 12MMA basis) saw a 0.21% monthly increase, leading to a new high of 540,568 attendees for the Las Vegas MSA. Compared to August 2016, convention attendance was up 3.1%. The previous 12MMA monthly peak attendance of 529,185 was in January 2007.
Convention attendance saw significant gains in 2016 with 10 months of greater than 10% YOY growth. However, YOY growth has been steadily slowing since the recent high in July 2016 of 20.2%. This is primarily due to facility capacity issues controlling the demand growth. The good news: In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center.
avail room
In August 2017, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $115.57, an increase of $0.17 (0.15%) from the previous month. Compared to August 2016, RevPAR is up $5.56 (5.1%), which continues its streak of YOY growth that began in December 2010. RevPAR is nearing a new high, now representing 97% of the RevPAR 12MMA peak of $119.43, which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was up for the 6th month in a row with an increase of 1.03% from July to $731.2 million in August. YOY growth in August of 4.6% was up (1 point) from the 12-month period ending in July, the biggest YOY gain since September 2007. This makes 31 months straight of positive YOY growth. July’s gaming revenues net of baccarat were nearly 88% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because there has finally been some improvement with the issue of constrained disposable income.
home sales
According to Home Builders Research, in August, total (new and resales) Clark County home closings were up 1% from the previous month, surpassing last month’s peak of 4,798 sales and reaching a new high of 4,848 sales (12MMA). On a YOY basis, total home sales were up a considerable 10.1% compared to August 2016. New home sales continue their hot streak with YOY growth of 21.2%, the 7th month in a row that annual growth in new home sales has been over 20%. Existing home sales, which are not nearly as strong, are nonetheless growing steadily with a YOY growth rate of 8.3%.
home price
Per Home Builders Research, the 12MMA median home price (new and resale) in August 2017 was $234,169, an 8.3% gain over August 2016. The peak of $305,333 was recorded over 10 years ago in February 2007. August’s estimate was nearly 77% of the peak price.
The median new home price was up 4.8% from the previous year, reaching a new peak in August of $334,033. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $215,982 in August, an 8.2% increase during the last 12 months. The peak of $286,833 occurred over 10 years ago in April 2007. This means that the current resale price has recovered approximately 75% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was $323,939 (12MMA).
The rate of home appreciation for new and resale homes most recently peaked in March 2016 at 10.2% YOY growth, but was down to 6.4% in December of that year. Since then it has risen steadily and is now back up over 8%, averaging 7.4% for the year through August. The annual peak of 35.8% growth occurred in February 2005.
30 yr
The 12MMA 30-year fixed rate mortgage in the Western Region increased by 0.05 points to 3.88% in September. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 156.4 in July 2017, a rise of 6.3% compared to July 2016. The US index in July was 195, an increase of 5.5% for it compared to the previous year. The Las Vegas index peaked at 233.2 in December 2006. The latest index is 67% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
apartment
The Las Vegas Valley’s 12MMA apartment vacancy rate ticked up by 0.1 points in Q2 2017, though the general trend since 2011 has been down. This quarter was the first increase in vacancy since Q3, 2013. Apartment vacancies are slowly recovering. Over the last 9 years, the apartment vacancy rate peaked at 10.8% in Q2, 2010. It hit its lowest mark of 5.1% in Q1, 2007.
commercial mtg
The 10-year treasury rose to its highest levels since the end of July, at 2.33%. Many analysts are forecasting continued escalation to approximately 2.4 or 2.5%, with the Fed bumping prime rates to 4.5% by the end of 2017. On September 20th, the Federal Reserve announced it will begin to unwind its $4.5 trillion balance sheet filled primarily of treasuries and mortgage-backed securities it acquired during quantitative easing. The Fed views inflation running close enough to its 2% target to forge ahead with its rate and balance sheet normalization program. The cuts will happen modestly before gradually increasing in an attempt to avoid drastic changes in the markets.
In reference to equity markets, all four major U.S. equity indices (S&P 500, NASDAQ, Dow Jones, and Russell 2000) ended September with year-to-date gains of at least 9%. They have endured mounting tension with North Korea, a deadly U.S. hurricane season, and escalating political turmoil.
Due to the fear of rising interest rates, CommCap has received a flurry of loan requests by borrowers trying to lock in long term fixed rates.
taxable retail
Despite slowing visitor growth, increased local resident and business spending in Nevada and Clark County continues to fuel rising taxable retail sales. We believe much of this growth is largely due to the volume of construction activity combined with vigorous visitor spending. (Another record high was reached in July with over $3.41 billion in sales, a healthy 4.2% increase from last year. The increase from the previous month was 0.18%. The YOY growth rate for taxable retail sales averages 4.4% through July.
July’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region.
Note: It will be interesting to see how adult-use marijuana sales will pan out relative to the taxes it will generate. The first of month of reporting occurred this July. While still small relative to Nevada’s revenue-base, starting next month, we will begin tracking the contribution that these sales is making to the base.
weekly earnings

The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) went up by $3 in August, continuing a streak of growth started nearly 3 years ago in September 2014. On a YOY basis, the 12MMA was up $32 (4.4%) from August 2016.

 
On an inflation-adjusted, YOY basis, earnings rose by 2.4% in August 2017 compared to July 2016, reaching $665 (in 2007 dollars). This was an increase of $2 from July. Las Vegas’ average weekly real wage is now $86 (11.5%) below the most recent inflation-adjusted peak of $751 that occurred 10 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still much closer to the trough than the peak.
weekly hours
The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, rose by 0.1 points for the second consecutive month, reaching 33.7 in August. Weekly hours had been increasing by just 0.1-points every 2 months since January, so this increasing pace may be a sign that employers are beginning to provide more full-time jobs. On a YOY basis, average weekly hours are up 0.5 hours from August 2016, a good sign considering they were either down or unchanged YOY through all of 2016. In Q2-2017, the U-6 unemployment rate recorded another 0.4 point drop, which is another indicator that business reliance on part-time workers is decreasing. The 7-year peak of 36.9 hours occurred in October 2008.
Implication: Despite decreasing headline and U-6 unemployment rates, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers) remains the nation’s 3rd highest at 11.5% as of Q2, 2017. However, the decreasing U-6 rate does seem to be having a salutary effect on weekly hours. In 2016, the net gain in weekly hours was 0. Already in 2017 weekly hours have increased 0.5 hours.
fuel
As of October 13, Las Vegans are feeling a little relief at the pump with the price of regular unleaded gasoline in the Las Vegas MSA decreasing $0.06 (-2.3%) from the month prior, resulting in a per gallon price of $2.67. The price of regular unleaded has gone up $0.22, or 9.1%, from a year ago.
According to AAA, “Gasoline inventory levels reached a 4-month high, according to EIA’s latest report, growing to 29.3 million bbl. The increase is a surprise given planned maintenance at various refineries and healthy exports in the region that were expected to keep inventory growth low. Additionally, despite dropping from last week, the refinery utilization rate of crude remains high at 88.3 percent in the region. The utilization rate is likely to climb back up, as more refineries return to typical production rates when scheduled maintenance is completed.”
metro product
Gross metropolitan product (“GMP”) figures for 2016 were released in the last few weeks and Las Vegas posted a 2.1% gain in inflation-adjusted, or real, GMP. This makes six years in a row of growth. Because it is adjusted for inflation, positive growth in this measure of GMP is always a good sign. Average job growth is also up 2.1%. Both these figures beat their 12-year averages. These results also bode well for 2016’s numbers.
employment permit
A well-known housing market indicator is the employment-to-housing permit ratio, or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. The E-P Ratio for Clark County is back up the 0.2 points it lost last month, from 1.4 in July to 1.6 in August on a 12MMA basis. Relative to August 2016 the E-P Ratio is down 0.3 points from 1.9. The general consensus among real estate analysts is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range since October 2016.

Las Vegas Economic Metrics

 
stat highlights

positive

 employment
The RCG Employment Index’s 12-month moving average (“12MMA”) has been steadily increasing since 2011; however, in this July it took another rare pause. This was the first month in just over a year that did not see the Index increase. Compared to July 2016, the Index is up 1.2 points, though it remains 1.4 points below the November 2006 peak of 100. We expect the Index will continue on the same trajectory that we have been seeing since 2011.
unemployment
After falling by 0.1 points every month for more than a year, the 12MMA of Clark County’s headline unemployment rate halted at 5.2% in July 2017. The rate is 1.1 points below last July’s 6.3%. It reached its lowest level in October 2006 when it was just 4%. The region is hypothetically at “full employment”.
After 7 straight months at 3.3%, the 12MMA rate of job growth in the Las Vegas MSA experienced an undesired change, dropping 0.1 points to 3.2% in July. Job growth in the region and at the national level has been suffering from the same effect: according to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
yoy construction
A strong housing market AND a recovering commercial market are bolstering construction in Las Vegas, leading to more construction jobs. There were 59,383 construction workers in Southern Nevada in July 2017 (12MMA), up 5,708 (10.6%) from July 2016. That makes 61 straight months (just over 5 years) and counting of construction job growth. These jobs now represent 6.6% of the region’s job-base, a small 0.1 point increase in construction’s share. July’s jobs are still well below the November 2006 peak of 108,833, when they accounted for 11.4% of all MSA jobs. We are not likely to see pre-recession construction job numbers in the foreseeable future; and yet, while the number of construction jobs was pushed to an artificial high during the real estate bubble, the industry is much more stable today than it was then.
visitor volume
On a 12MMA basis, the number of visitors to Clark County in July fell -0.09% from the previous month. When compared to July 2016, there was no YOY growth. 2017’s seven-month visitor total of approximately 25 million is still just barely higher than 2016’s 24.9 million, with the differential continuing to shrink. Visitor growth has slowed considerably in 2017 with a YOY visitor growth rate average over the first half of the year of only 0.6%. The average rate of growth over the same period in 2016 was better at 1.7%. We believe we have now entered a sustained period of slower but steady growth. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
In July, Clark County’s convention attendance (on a 12MMA basis) saw its biggest monthly increase in over a year and reached a new high, growing 1.9% to 533,668 attendees from 523,890 the previous month. Compared to July 2016, convention attendance was up 2.2%. The previous 12MMA monthly peak attendance of 529,185 was in January 2007.
Convention attendance saw significant gains in 2016 with 10 months of greater than 10% YOY growth. However, YOY growth has been steadily slowing since the recent high in July 2016 of 20.2%. This is primarily due to facility capacity issues controlling the demand growth. In June 2017, the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center.
hotel rev
In July 2017, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $115.40, an increase of $0.61 (0.53%) from the previous month. Compared to July 2016, RevPAR is up an even $6.00 (5.5%), which continues its streak of YOY growth that began in December 2010. RevPAR is nearing a new high, now representing 97% of the RevPAR 12MMA peak of $119.43, which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was up for the 5th month in a row with an increase of 0.12% from this past June to $723.8 million in July. YOY growth in July of 3.6% was down slightly (-0.3 points) from the 12-month period ending in June, but maintains a 30 month streak of positive YOY growth. July’s gaming revenues net of baccarat were nearly 87% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials under 35 have caused a decrease in slot revenues, they are now recovering because there has finally been some improvement with the issue of constrained disposable income.
home sales
According to Home Builders Research, in July, total (new and resales) Clark County home closings, which were up 0.96% from the previous month, have now surpassed the most recent monthly peak in July 2012 of 4,777 sales and reached a new high of 4,798 sales (12MMA). On a YOY basis, total home sales were up by 9.8% compared to July 2016. New home sales continue their hot streak with YOY growth of 22.5%, the 6th month in a row that annual growth in new home sales has been over 20%. Existing home sales, which are not nearly as strong, are nonetheless growing steadily with a YOY growth rate of 7.8%.
home price
Per Home Builders Research, the 12MMA median home price (new and resale) in July 2017 was $232,086, a 7.8% gain over July 2016. The peak of $305,333 was recorded just over 10 years ago in February 2007. July’s estimate was 76% of the peak price.
The median new home price was up 4.2% from the previous year, reaching a new peak in July of $331,526. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $213,899 in July, a 7.7% increase during the last 12 months. The peak of $286,833 occurred over 10 years ago in April 2007. This means that the current resale price has recovered approximately 75% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was $320,606 (12MMA).
Toward the end of 2016 the combined rate of home appreciation for new and resale homes declined from an average 10.1% YOY growth during the first four months to 6.4% in December of that year. It grew slightly to start off 2017 and over the last five months has held above 7%. The annual peak of 35.8% growth occurred in February 2005.
30 year fixed
The 12MMA 30-year fixed rate mortgage in the Western Region increased by 0.05 points to 3.83% in August. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 155.5 in June 2017, a rise of 6.1% compared to June 2016. The US index in June was 194.1, an increase of 5.5% for it compared to the previous year. The Las Vegas index peaked at 233.2 in December 2006. The latest index is 67% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
housing opp
The Housing Opportunity Index (“HOI”) for the Las Vegas MSA has now declined for 2 straight quarters after 7 quarters of increases, reaching 66.3 points on a 4-quarter moving average basis, or 77% of its peak. It dropped 0.6 points from 67.7 in Q1, and fell another 0.8 points in Q2. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 67.8.
The U.S. index dropped from 62.9 in Q3, 2016 to 62.1 in Q4, 2016. Housing prices nationally appear to be stabilizing.
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.
commercial vacancy
In Q2, 2017 the vacancy rate for the commercial markets was up in Industrial, down in Spec Office, and unchanged in Anchored Retail. On a 4-quarter moving average basis the results were nearly the same with the only difference being Anchored Retail experienced a small 0.1 point decline in vacancy.
The Industrial market vacancy rate increased by 0.5 points to 6.0% in Q2. On a 4-quarter moving average basis the increase was only 0.2, from 5.3% to 5.5%.
The Spec Office vacancy rate decreased by 1.1 points to 19.2% in Q2. On a 4-quarter moving average basis the vacancy rate was down 0.2 points from Q1.
Anchored Retail saw vacancy remain at 10.8%; however, on a 4-quarter moving average the Retail rate actually fell 0.1 points to 10.8%.
On a 4-quarter moving average basis, this is the 3rd increase in a row for Industrial, though its vacancy rate remains well below the other markets. Anchored Retail market vacancy is nearly double the Industrial market, while the average Spec Office market vacancy rate nearly doubles Anchored Retail.
commercial mortgages
The 10-year treasury continued its descent in August, falling to a low of 2.12% on the 31st. Despite countless forecasts anticipating interest rates to rise with each increase from the Fed, long term rates have consistently remained at low levels throughout the majority of 2017. Potential reasons long term interest rates continue to fall include: the view of U.S. Treasuries as international “safe harbor” investments amid geopolitical uncertainties, the current outlook for inflation remaining low, and the greater value received by global investors choosing from the 2.07% yield from the 10-year U.S. Treasury, 0.38% for the 10-year German Bund and .05% from Japan’s 10-year bond. Additionally, the Labor Department stated U.S. employers added 156k jobs in August, slightly less than analysts expected. Investors viewed the relatively weak jobs report for August as a likely reason to help keep interest rates low.
The 10-year U.S. Treasury continues to remain favorable for those looking for long term, fixed rate financing.
Source: CommCap Advisors.
taxable retail
Despite slowing visitor growth, increased local resident and business spending in Nevada and Clark County continues to see rising taxable retail sales. We believe much of this growth is due to the volume of construction activity in the market today. Another record high was reached in June with $3.41 billion in sales, a healthy 4.2% increase from last year, though the increase from the previous month was just 0.03%. The YOY growth rate for taxable retail sales averages 4.5% over the first half of the year.
June’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region.
weekly earnings
The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) continues to climb steadily and in July 2017 rose $5 to $767. On a YOY basis, the 12MMA was up $30 (4.1%) from July 2016.
On an inflation-adjusted, YOY basis, earnings rose by 2.2% in July 2017 compared to July 2016, reaching $663 (in 2007 dollars). This was an increase of $3 from June. Las Vegas’ average weekly real wage is now $88 (12%) below the most recent inflation-adjusted peak of $751 that occurred almost 10 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still much closer to the trough than the peak.

weekly hours

The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, ticked up 0.1 points to 33.6 in July after having remained stagnant the month before. This 0.1-point increase every 2 months has become a pattern that began in January 2017. On a YOY basis, average weekly hours are up 0.4 hours from July 2016. The 7-year peak of 36.9 hours occurred in October 2008. Weak average hours worked continue to be accompanied by a declining headline unemployment rate. In Q2-2017, the U-6 unemployment rate recorded another 0.4 point drop, which may be an indication that business reliance on part-time workers is decreasing. The pace at which weekly hours are increasing, though still very slow, does appear to be picking up.
Implication: Despite decreasing headline and U-6 unemployment rates, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers) remains the nation’s 3rd highest at 11.5% as of Q2, 2017. However, the decreasing U-6 rate does seem to be having a salutary effect on weekly hours. In 2016, the net gain in weekly hours was 0. Already in 2017 weekly hours have increased 0.4 hours.
unleaded
As of September 6, the price of regular unleaded gasoline in the Las Vegas MSA increased $0.15 (6.0%) from the month prior, resulting in a per gallon price of $2.70. The price of regular unleaded has gone up $0.30, or 12.4%, from a year ago.
According to AAA, “Hurricane Harvey may no longer be raining down on the Gulf Coast, but the storm’s impact continues to drive up gas prices across the country. At $2.65, the national gas price average is 27 cents more expensive on the week. Motorists in 26 states are paying 25 to 44 cents more for a gallon of unleaded compared to seven days ago. In fact, every state in the country has seen gas prices increase except four (Alaska, Idaho, Hawaii and Utah), where prices remain stable. Overall, gas prices are pennies away from topping the highest price ($2.67, August 15-18, 2015) Americans have paid for a gallon of gas in more than two years…. As Texas dries out from Harvey, all eyes are on Hurricane Irma, now a Category 5 hurricane. 
Despite being the region with the smallest gas price increases on the week, the West Coast continues to sell the most expensive gas. Gas prices on the West Coast increased as much as 12 cents on the week: California (+12 cents), Arizona (+9 cents), Nevada (+9 cents), Washington (+7 cents), Oregon (+6 cents), Alaska (+4 cents) and Hawaii (+3 cents)… the West Coast does not typically draw gasoline from the Gulf Coast and is not experiencing price spikes as compared to the East Coast.”
meter hookups
Electric meter hookups’ 12MMA in July 2017 reached 804,360. Total hookups were up 1.8% from July 2016. Over the last 21 months the annual growth rate for electric meter hookups has slowly fluctuated between 1.7% and 1.9%. This hints at stable population growth and business growth, and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.
permit
A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. The E-P Ratio for Clark County fell 0.2 points from 1.6 in June to 1.4 in July on a 12MMA basis. Relative to July 2016 the E-P Ratio is down 0.9 points from 2.3. The general consensus among real estate analyst is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range since October 2016.

Las Vegas Economic Metrics

Visitor growth and related tourism metrics have slowed in Southern Nevada, but everything else is looking pretty good. All the latest, below.
stat highlights

positive

emp index
The RCG Employment Index’s 12-month moving average (“12MMA”) has been steadily increasing since 2011. June 2017 continues the trend with our Index ticking up by 0.1 and reaching 98.6. Compared to June 2016, the Index is up 1.3 points. It is now just 1.4 points below the November 2006 peak of 100. We expect the Index will continue on the same trajectory that we have been seeing since 2011.
job growth
The 12MMA of Clark County’s headline unemployment rate was 5.2% in June 2017. The unemployment rate has been falling by 0.1 points every month for more than a year. That puts the rate 1.2 points below last June’s 6.4%. It reached its lowest level in October 2006 when it was just 4%. The region is hypothetically at “full employment”.
The 12MMA rate of job growth in the Las Vegas MSA has not changed in 7 months, holding firm at 3.3% in June. Job growth in the region and at the national level is suffering from the same effect: According to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
u3 & u6
The U-3 and U-6 unemployment rates for Nevada saw healthy improvement in the 2nd quarter of 2017. The U-3 rate was down 0.6 points, from 5.6 to 5. The U-6 rate fell from 11.9% in Q1 to 11.5% in Q2. Despite the 0.4-point drop in the U-6 rate, 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 doing better than 13 other states, a considerable change from its previous ranking of 6th highest U-3 rate in the nation.
yoy
A strong housing market AND a recovering commercial market are bolstering construction in Las Vegas, leading to more construction jobs. There were 58,642 construction workers in Southern Nevada in June 2017 (12MMA), up 5,350 (10.0%) from June 2016. That makes 60 straight months (5 years) and counting of construction job growth. These jobs now represent 6.5% of the region’s job-base. June’s jobs are still well below the November 2006 peak of 108,833, when they accounted for 11.4% of all MSA jobs. However, we are not likely to see the pre-recession construction job share in the foreseeable future. While the number of construction jobs was pushed to an artificial high during the real estate bubble, the industry is much more stable today than it was then.
visitor volume
On a 12MMA basis, the number of visitors to Clark County in June fell -0.2% from the previous month. However, when compared to June 2016, there was positive YOY growth of 0.3%. 2017’s six-month visitor total of 21.4 million is still slightly higher than 2016’s 21.3, but the differential has been shrinking. Visitor growth has slowed considerably in 2017 with a YOY visitor growth rate average over the first half of the year of only 0.6%. The average rate of growth over the same period in 2016 was better at 1.7%. We believe we are now in a sustained period of slower but steady growth. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
In June, Clark County’s monthly convention attendance (on a 12MMA basis) fell -0.18% to 523,890 attendees from 524,838 the previous month. Compared to June 2016, convention attendance was up 1.1%. The 12MMA monthly peak attendance of 529,185 was in January 2007. June’s attendance represented 99% of the peak.
Convention attendance saw significant growth in 2016 with 10 months of greater than 10% YOY growth. However, YOY growth has been steadily slowing since the recent peak in July 2016 of 20.2%. This is primarily due to facility capacity issues controlling the demand growth. This June the Las Vegas Convention and Visitors Authority’s Board of Directors gave final approval for an expansion and renovation of the Las Vegas Convention Center.
hotel rev
In June 2017, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $114.79, a decrease of -$0.07 (-0.06%) from the previous month. Compared to June 2016, RevPAR is up $6.64 (6.1%), which continues its streak of YOY growth that began in December 2010. It now represents 96% of the RevPAR 12MMA peak of $119.43, which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat was up for the 4th month in a row with an increase of 0.15% from this past May to $722.9 million in June. YOY growth in June of 3.9% was down slightly from the 12-month period ending in May, but maintains a 29 month streak of positive YOY growth. June’s gaming revenues net of baccarat were nearly 87% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to recover for two reasons: constrained disposable income, which is now finally improving, and changing spending patterns, especially among adults under 35. Millennials prefer to spend their money at clubs, pool parties, restaurants, show experiences and shopping rather than gambling.
home sales
According to Home Builders Research, in June, total (new and resales) Clark County home closings, numbering 4,753 (12MMA), were up .94% from the previous month. On a YOY basis, total home sales were up by 8.2% compared to June 2016. New home sales continue their hot streak with YOY growth of 21.2%, the 5th month in a row that new home sales annual growth has been over 20%. Existing home sales are not nearly as strong with YOY growth of 6.2%. Total home sales are closing in on the most recent monthly peak in July 2012 of 4,777 sales. June’s count was 99.5% of the peak.
median home
Per Home Builders Research, the 12MMA median home price (new and resale) in June 2017 was $229,991, a 7.5% gain over June 2016. The peak of $305,333 was recorded just over 10 years ago in February 2007. April’s estimate was 75% of the peak price.
The median new home price was up 4.3% from the previous year, reaching a new peak in June of $330,274. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $211,724 in June, a 7.2% increase during the last 12 months. The peak of $286,833 occurred over 10 years ago in April 2007. This means that the current resale price has recovered approximately 74% of its pre-recession peak. By comparison, the median resale home price in the Reno-Sparks MSA was $317,356 (12MMA).
Toward the end of 2016 the combined rate of home appreciation for new and resale homes declined from an average 10.1% YOY growth during the first four months to 6.4% in December of that year. It grew slightly to start off 2017 and over the last four months has held above 7%. The annual peak of 35.8% growth occurred in February 2005.
30 year fixed
The 12MMA 30-year fixed rate mortgage in the Western Region increased by .06 points to 3.78% in July after holding at 3.73% over the previous two months. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 154.6 in May 2017, a rise of 6% compared to May 2016. The US index in May was 193.2. The Las Vegas index peaked at 233.2 in December 2006. The latest index is 66% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
commerical
The 10-year treasury fell to a low of 2.24% in late July, after rising to 2.39% near the beginning of the month. The 30-Day LIBOR remained primarily unchanged, ending the month .01% higher than June’s finish of 1.22%. Treasury yields declined last month as investors increased their holdings in government paper. The rise comes amid persistent doubt about the President’s pro-growth policy agenda and the failure to garner enough support to repeal and replace the Affordable Care Act. Furthermore, the U.S. Federal Reserve left the benchmark policy rate unchanged this month as Janet Yellen emphasized that she expects to begin shrinking its $4.5 trillion bond portfolio later this year. Finally, Andrew Bailey of the Financial Conduct Authority reported that the LIBOR will be phased out by the end of 2021.  The FCA said a lack of transaction data meant it was no longer possible to determine a reliable rate.
The LIBOR continues to slowly rise while the 10-year U.S. Treasury oscillates near 2.3%. With Treasury Yields remaining relatively stable, it is still a good time to borrow and lock in a long term fixed rate.
Source: CommCap Advisors.
taxable retail
Despite slowing visitor growth, increased local resident and business spending in Nevada and Clark County continues to see rising taxable retail sales. We believe much of this growth is due to the volume of construction activity in the market today. Another record high was reached in May with $3.41 billion in sales, a healthy 5% increase from last year. Over these first five months of the year the YOY growth rate for taxable retail sales is generally trending upward.
May’s taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government revenues and spending. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies, which have driven Southern Nevada’s growth, benefiting all of its sectors. They are also primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region.
average earnings

The Las Vegas MSA’s 12MMA of average weekly earnings (not inflation-adjusted) continue to climb steadily. And in June 2017 rose $2 to $762. On a YOY basis the 12MMA was up $27 (3.7%) from June 2016
On an inflation-adjusted, YOY basis, earnings rose by 1.8% in June 2017 compared to June 2016 to $660 (in 2007 dollars). This was an increase of $1 from May. Las Vegas’ average weekly real wage is now $91 (12.1%) below the most recent inflation-adjusted peak of $751 that occurred almost 10 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still much closer to the trough than the peak.

average hours
The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, remained at 33.5 in June, a pause in the plodding general trend of increasing hours. On a YOY basis, average weekly hours are up 0.4 hours from June 2016. The 7-year peak of 36.9 hours occurred in October 2008. Weak average hours worked continue to be accompanied by a declining headline unemployment rate. In Q2-2017, the U-6 unemployment rate recorded another 0.4 point drop, which may be an indication that business reliance on part-time workers is decreasing.
Implication: Despite decreasing headline and U-6 unemployment rates, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers) remains the nation’s 3rd highest at 11.5% as of Q2, 2017.
unleaded
As of July 31, the price of regular unleaded gasoline in the Las Vegas MSA fell $.04 (-1.7%) from the month prior, resulting in a per gallon price of $2.55. Compared to this time last year, the price of regular unleaded is $0.13, or 5.0%, more.
According to AAA, “After notching the biggest one-week draw in nearly two and a half years, West Coast gasoline stocks are at their lowest level in seven months. Stocks tumbled 1.7 million bbl, bringing the region’s supply level to nearly 27 million bbl, according to the EIA. The tumble in stocks paired with potentially lower West Coast refinery runs, due to ongoing maintenance this week, means the regional decline in gas prices could be short lived and gas prices have the potential to increase in the coming days.”
electric
Electric meter hookups’ 12MMA in June 2017 reached 803,084. Total hookups were up 1.8% from June 2016. Over the last 20 months the annual growth rate for electric meter hookups has slowly fluctuated between 1.7% and 1.9%. This hints at stable population growth and business growth, and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.
emp permit
A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. The E-P Ratio for Clark County increased 0.1 points from 1.7 in May to 1.8 in June on a 12MMA basis. When compared to June 2016 the E-P Ratio is down 0.1 points from 1.9. The general consensus among real estate analyst is that an E-P Ratio between 1.0 and 2.0 indicates a stable market. Clark County’s E-P Ratio has been in this range since October 2016.

Southern Nevada Economic Metrics

From Stat Pack co-publisher RCG Economics, below is the latest data on the SoNev economy. If you have any questions, don’t hesitate to email RCG chief John Restrepo at jrestrepo@rcg1.com. Also, be sure to sign up to receive our Friday Fact Pack (which receives rave reviews from our readers for its winning combination of great information and humor) over there to the right. —–>
stat highlights

positive

 
employment index
For the past 5 months months the RCG Employment Index’s 12-month moving average (“12MMA) has ticked up by 0.1, reaching 98.4 in April. Compared to April 2016, the Index is up 1.2 points. For nearly 6 years the Index has been steadily climbing and is now less than 2 points below the November 2006 peak of 100.
job growth
In April 2017 the 12MMA of Clark County’s headline unemployment rate was 5.4% after dropping 0.1 every month for a year, putting it 1.2 points lower than the April 2016 rate of 6.6%. It reached its lowest level in October 2006 when it was just 4%.
Again, the April rate of job growth in the Las Vegas MSA did not change, holding at 3.3% (12MMA) for 5 months straight. Job growth in the region and at the national level is suffering from the same effect: According to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
u3 and u6
In Q1 of 2017 Nevada’s U-3 and U-6 unemployment rates have both declined in by 0.3 points for the second quarter in a row. The U-6 rate fell from 12.2% in Q4, 2016, to 11.9% in Q1, 2017. The U-3, or headline rate, fell to 5.6% but is still tied with West Virginia for the 6th highest in the nation. Regarding the U-6 rate, Nevada is the third highest after New Mexico and Alaska.
construction
With housing demand strong, and commercial demand improving, in the Las Vegas MSA, the amount of construction jobs continues to grow. Construction workers in Southern Nevada numbered 57,167 in April 2017 (12MMA), up 4,443 (8.4%) from April 2016. Construction employment has now grown for 58 straight months and represented 6.3% of the region’s job-base at the end of April. April’s jobs are still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all MSA jobs. It is unlikely we will see the pre-recession construction job share in the foreseeable future. The number of construction jobs was artificially inflated due to the real estate bubble. The industry is much more stable today than it was then.
visitor volume
On a 12MMA basis, the number of visitors to Clark County in April hardly changed from the previous month with less than 0.1% growth. When compared to April 2016, the YOY change was only 0.4%. 2017’s four-month visitor total of 14.3 million is slightly higher than 2016’s 14.2 million for the same four months. Visitor growth has slowed considerably in 2017 with a YOY visitor growth rate average over these first four months of only 0.7%. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention
In April, Clark County’s monthly convention attendance (on a 12MMA basis) fell -1.31% to 517,623 attendees from 524,514 in the previous month. Compared to April 2016, convention attendance was up 1.6%, the smallest YOY growth since August 2015. In 2016, YOY growth averaged 14.3%. The 12MMA monthly peak attendance of 529,185 was in January 2007. April’s attendance represented almost 98% of the peak.
Convention attendance saw significant growth in 2016 with 10 months of greater than 10% YOY growth. However, YOY growth has been steadily slowing since the recent peak in July 2016 of 20.2%. This is likely due to capacity issues in the market and convention attendance has now recovered to a stable level.
hotel rev per room
In April 2017, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $114.43, a decrease of -$0.28 (-0.24%) from the previous month. Compared to April 2016, RevPAR is up $6.20 (5.7%) and continues on its streak of YOY growth that began in December 2010. It now represents 96% of the RevPAR 12MMA peak of $119.43, which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
On a 12MMA basis gaming revenue net of baccarat increased from March by 0.42% to $720.4 million in April 2017. YOY growth in April was higher than it has been in over a year at 3.7%. April’s gaming revenues net of baccarat were 86% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income, which is now finally improving, and changing spending patterns, especially among adults under 35. Millennials prefer to spend their money at clubs, pool parties, restaurants, show experiences and shopping rather than gambling.
home sales
According to Home Builders Research, in April, total (new and resales) Clark County home closings, which numbered 4,694 (12MMA), were up 0.27% from the previous month. On a YOY basis, total home sales were up by 9.6% compared to April 2016. While resales are doing well with a YOY increase of 7.4% to 3,980, new homes sales are very strong with a YOY increase of 23.6% to 714. After more than a year of decreasing new home sales, there have now been 22th straight months of growth. The last 3 months have seen new home sales growing by more than 20% from the year before. Total home sales are not far from the most recent monthly peak in July 2012 of 4,777 sales. April’s count was 98% of the peak.
home price
Per Home Builders Research, the 12MMA median home price (new and resale) in April 2017 was $227,393, a 7.7% gain over April 2016. The peak of $305,333 was recorded just over 10 years ago in February 2007. April’s estimate was 74% of the peak price.
The median new home price was up 4.4% from the previous year, reaching a new peak in April of $327,754. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $209,232 in April, a 7.4% increase during the last 12 months. The peak of $286,833 was 10 years ago in April 2007. This means that the current resale price has recovered approximately 73% of its pre-recession peak. For comparison, the median resale home price in the Reno-Sparks MSA was $312,842 (12MMA).
Toward the end of 2016 the combined rate of home appreciation for new and resale homes declined from an average 10.1% YOY growth during the first four months to 6.4% in December of that year. It appears to be back on the rise with steady growth during the last 3 months. The annual peak of 35.8% growth occurred in February 2005.
30 yr mortgage
The 12MMA 30-year fixed rate mortgage in the Western Region increased slightly by 0.04 points to 3.67% in May after 3 consecutive months of decreases to begin 2017. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely to go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 152.9 in March 2017, a rise of 5.8% compared to March 2016. The US index in March was 191.3. The Las Vegas index peaked at 233.2 in December 2006. The latest index is 65% of the peak. The greatest positive annual change (44.5%) in the Las Vegas index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
commercial vacancy
The vacancy rate for the commercial markets was up across the board in Q1, 2017, yet on a 4-quarter moving average basis the results were mixed.
The Industrial market vacancy rate increased by 0.3 points to 5.5% in Q1. On a 4-quarter moving average basis the increase was only 0.1, from 5.2% to 5.3%.
The Spec Office vacancy rate increased by 0.1 points to 20.3% in Q1. On a 4-quarter moving average basis the vacancy rate was unchanged from Q4.
Anchored Retail saw vacancy increase by 0.3 points from 10.5% to 10.8%; however, on a 4-quarter moving average the Retail rate actually fell 0.2 points to 10.9%.
On a 4-quarter moving average basis, this is the 2nd increase in a row for Industrial, though its vacancy rate remains well below the other markets. Anchored Retail market vacancy is more than double the Industrial market, while the average Spec Office market vacancy rate is nearly double Anchored Retail.
commercial mortgage
As of May 1, 2017, the prime rate increased from 3.5% to 4%. The 10-year treasury bond rate fell by 0.12 points to 2.3%. The 30-day LIBOR increased by 0.1 points to 0.99%. Lender rates were mostly down and remain relatively low, which continues to benefit the commercial real estate industry in terms of the cost of borrowing. The challenge for Las Vegas: filling a large amount of vacant space, especially in the office market, when office job growth is moderate; and companies remain hesitant about expanding their space footprint.
retail sales
Despite slowing visitor growth, increased local resident and business spending in Nevada and Clark County keeps pushing taxable retail sales to new highs. March 2017 set another high mark with $3.38 billion in sales, which is still up a healthy 4.7% from last year, but the YOY change is slowing as the local economy reflects a bit of uncertainty due to national and global trends and e-ecommerce continues to spread.
Current taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government budgets. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the health of regional and national economies. They are primary drivers of visitors and convention attendees to Las Vegas, which is ultimately reflected in tourism spending in the region.
weekly earnings

Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) continued to climb steadily in April 2017. It was up another $3 after the previous month’s $4 jump, reaching $759. The 12MMA was up $28 (3.7%) from April 2016.
On an inflation-adjusted, YOY basis, earnings increased 2% in April 2017 compared to April 2016 to $659 (in 2007 dollars). Las Vegas’ average weekly real wage is now $92 (12.3%) below the most recent inflation-adjusted peak of $751 that occurred more than 9 ½ years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still much closer to the trough than the peak.

weekly hours
The number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, stalled again in April at 33.4, though the general trend has hours increasing, albeit slowly. On a YOY basis, average weekly hours are up 0.3 points from April 2016. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, weak average hours worked have been accompanied by a declining headline unemployment rate. In Q1-2017, the U-6 unemployment rate recorded another 0.3 point drop, which means we may see further improvement in weekly hours worked as business reliance on part-time workers decreases.
Implication: Despite decreasing headline and U-6 unemployment rates, many companies continue to depend heavily on part-time workers and independent contractors. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers), remains among the nation’s highest at 11.9% as of Q1, 2017.
fuel
As of June 6, the price of regular unleaded gasoline in the Las Vegas MSA fell $0.02 (-0.6%) from the month prior, resulting in a per gallon price of $2.66. Compared to this time last year, the price of regular unleaded is $0.22, or 9.1%, more.
According to AAA, “Low combinations of gasoline storage and production levels are generating concern in the region (West Coast). In Northern California, planned and unplanned refinery maintenance has negatively affected gasoline production. In May, imports helped the West Coast meet supply demands, but prices could continue to increase in the region until refiners resume normal operations.”
meter hookups
Electric meter hookups’ 12MMA in April 2017 reached 800,569. Total hookups were up 1.7% over April 2016. The annual growth rate has slowly fluctuated up from 1.7% and back down over the last 19 months. This hints at stable population growth and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.

STAT PACK UPDATE: Las Vegas MSA Economic Stats

This month continues an economic trend with no end in sight:  The rate of job growth is holding steady, which is to say that growth is not increasing. Bottom line, Southern Nevada job growth is suffering a bit because of an increasing demand for unskilled labor. You’ll see below that job growth in the Las Vegas MSA did not change in February, holding at 3.3% (12MMA). The national growth level is suffering from the same effect. The reasons are many, including the rapid advancement of automation and technology.
If you have questions on any of the data presented below, don’t hesitate to contact John Restrepo at jrestrepo@rcg1.com
stat highlights

positive 13

employment index
In each of the previous 6 months the RCG Employment Index 12-month moving average (“12MMA) has ticked up by 0.1 points, arriving in February at 98.0. Compared to February 2016, the Index is up 0.9 points. For nearly 6 years the Index has been steadily climbing and is now 2 points below the November 2006 peak of 100. One of the main reasons for the weakness of this February’s numbers is that last February was a leap year, leaving us one day less to rack up numbers in 2017.
job growth
After dropping 0.2 points to start the year in January, the 12MMA of Clark County’s headline unemployment rate did not budge in February. When compared to February 2016, the headline rate is down by 0.8 points. The rate reached its lowest level in October 2006 when it was just 4%.
The rate of job growth in the Las Vegas MSA did not change in February, holding at 3.3% (12MMA). Job growth in Las Vegas and at the national level is suffering from the same effect. According to the Brookings Institution, the slowdown is mainly due to decreasing demand for unskilled labor.
yoy contruction
Construction jobs in the Las Vegas MSA continue growing at a steady pace as housing and commercial real estate demand are healthy. Construction workers in Southern Nevada numbered 55,983 in February 2017 (12MMA), up 4,017 jobs (7.7%) from February 2016. Construction employment has now grown for 55 straight months and represented 6% of the region’s job-base at the end of February. February’s jobs are still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all MSA jobs. It is unlikely we will see those pre-recession construction job share in the foreseeable future as it was artificially inflated due to the real estate bubble, though this also means that the industry is more stable today than it was then.
visitor volume
On a 12MMA basis, Clark County visitor volume in February was down from the previous month, shrinking by -0.43%, after January’s weak 0.09% increase. When compared to February 2016, the YOY visitor count was up 0.5% in February 2017. 2017’s two month visitor total of 7.15 million is only slightly higher than the previous year’s total of 7.10 million over the same two months. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
After decreasing by -0.51% in January, Clark County’s monthly convention attendance increased by 0.20% in February (on a 12MMA basis) to 517,120. Compared to February 2016, convention attendance is up 4.7%. The 12MMA monthly peak attendance of 529,185 was in January 2007. February’s attendance represented 98% of the peak.
Convention attendance saw significant growth in 2016 with 10 months of greater than 10% YOY growth. However, YOY growth has been steadily getting smaller since the recent peak in July 2016 of 20.2%. This is likely because convention attendance has now recovered to a stable level.
hotel rev pr room
The 12MMA of hotel revenue per available room (RevPAR) in Clark County was $113.86 in February 2017, a decrease of -$0.39 (-0.34%) from the previous month. Compared to February 2016, RevPAR is up $7.06 (6.6%) and continues on its streak of YOY growth that began in December 2010. It is now 96% of the RevPAR 12MMA peak of $119.43, which occurred in December 2007.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev
Gaming revenue net of baccarat decreased slightly from January by -0.14% to $711.7 million in February 2017 on a 12MMA basis. YOY growth in February was 1.7%. February’s gaming revenues net of baccarat were 85% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35. Millennials are preferring to spend their money on the clubs, restaurants and show experiences rather than gambling.
home sales
According to Home Builders Research, in February, total (new and resales) Clark County home closings, which numbered 4,620 (12MMA), were up 0.62% from the previous month. On a YOY basis, total home sales were up by 8.7% compared to February 2016. Resales saw a YOY increase of 6.8% to 3,934, while new homes sales shot up by 20.8% to 686. This was the 20th straight month of increasing YOY new home sales after 14 months of declines and the 17th straight month of YOY gains of over 10%. Total home sales are not far from the most recent monthly peak in July 2012 of 4,777 sales. February’s count was 97% of the peak.
median home
Per Home Builders Research, the 12MMA median home price (new and resale) in February 2017 was $223,144, a 6.6% gain over February 2016. The peak of $305,333 was recorded 10 years ago in February 2007. February’s estimate was 73% of the peak price.
The median new home price in February was $325,369, up 4.2% from the previous year. The peak of $327,066 occurred in February 2007. This means that the current median new home price has recovered to 99.5% of its pre-recession peak.
The median resale home price was $205,232 in February, a 6.2% increase during the last 12 months. The peak of $286,833 was in April 2007. This means that the current resale price has recovered 71.6% of its pre-recession peak. For comparison, the median resale home price in the Reno-Sparks MSA was $308,450 (12MMA).
The combined rate of home appreciation for new and resale homes had slowed considerably in mid-2015, but then started to accelerate again. At the end of 2016 home appreciation again began slowing down and for the first 2 months of 2017 YOY growth was 6.6%. In February 2016, the YOY price increase from 2015 was 10.2%. This is 3.6 percentage-points more than the 2017 figure. The annual peak of 35.8% growth occurred in February 2005.
30 yr fixed
The 12MMA 30-year fixed rate mortgage in the Western Region increased slightly by 0.04 points to 3.58% in March after a 0.01-point decrease the previous month. Though small, this is the first increase after 11 straight months of steady decrease. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely to go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 151.3 in January 2017, a rise of 5.8% compared to January 2016. The index peaked at 233.2 in December 2006. The latest index is 65% of the peak, making the region a competitive housing market. The greatest positive annual change (44.5%) in the index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
housing opp
Q4 of 2016 is the 7th quarter in a row that the Housing Opportunity Index (“HOI”) for the Las Vegas MSA has improved after 7 quarters of decline, reaching 67.7 points on a 4-quarter moving average basis or 79% of its peak. It changed from 67.0 in Q3, 2016 to 67.7 in Q4, 2016. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 66.6.
The U.S. index dropped from 62.9 in Q3, 2016 to 62.1 in Q4, 2016. Housing prices nationally appear to be stabilizing.
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.
apartment vacancies
The Las Vegas Valley’s 12MMA apartment vacancy rate continues to decline gradually, from 7.8% in Q3, 2016 to 7.7% in Q4. This was a 0.6-point drop compared to Q4, 2015. Apartment vacancies are slowly recovering. Over the last 9 years, the apartment vacancy rate peaked at 10.8% in Q2, 2010. It hit its lowest mark of 5.1% in Q1, 2007. The region’s apartment market could be moving toward a supply-constrained market in some areas if this downward vacancy trend continues.
current commercial
As of April 3, 2017, the prime rate remained at 3.5%. The 10-year treasury bond rate fell by 0.07 points to 2.42%. The 30-day LIBOR increased by 0.22 points to 0.98%. Lender rates are expected to shift upward, yet they remain relatively low and continue to benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: filling the excess capacity, especially in the office market, when job growth is moderate and companies remain hesitant about expanding their space footprint.
taxable retail
Increased visitation and increased local resident and business spending in Nevada and Clark County pushed taxable retail sales to a new record highs in 2016, but the YOY change is slowing as the local economy reflects uncertainty due to national and global trends. Sales hit $3.35 billion in January 2017, up 4.3% compared to January 2017 on a YOY basis using a 12MMA.
Current taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government budgets. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the regional and national job markets since they are primary drivers of tourism spending in the region.
average earnings
The Las Vegas MSA 12MMA for average weekly earnings (not inflation-adjusted) in February 2017 was up another $2 after January’s $5 jump, reaching $752. The 12MMA is up $23 (3.1%) from February 2016. On an inflation-adjusted, YOY basis, earnings increased 1.6% in February 2017 compared to February 2016 to $655 (in 2007 dollars). Las Vegas’ average weekly real wage is now $96 (12.9%) below the most recent inflation-adjusted peak of $751 that occurred 9 ½ years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still much closer to the trough than the peak.
average hours
After 6 straight months at 33.2, the number of average weekly hours worked in Las Vegas (Clark County), on a 12MMA basis, ticked up to 33.3 to kick off 2017. However, the improvement was short-lived as it stalled again in February. On a YOY basis, average weekly hours are up 0.1 points from February 2016. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, weak average hours worked have been accompanied by a slowly declining headline unemployment rate. In Q4-2016, the U-6 unemployment rate recorded a 0.3 point drop, so we may finally be seeing the expected increases in weekly hours worked.
Implication: Companies continue to depend heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers), though declining, remains among the nation’s highest at 12.2% as of Q4, 2016.
regular unleaded
As of April 3, the price of regular unleaded gasoline in the Las Vegas MSA continues to rise with a $0.09 (3.5%) increase from the month prior, resulting in a per gallon price of $2.62. Compared to this time last year, the price of regular unleaded is $0.17, or 7%, more.
According to AAA, “Gas prices on the West Coast remain the highest in the country, with six states in the region topping the list of most expensive U.S. markets: Hawaii ($3.05), California ($2.98), Washington ($2.86), Alaska ($2.78), Oregon ($2.72) and Nevada ($2.66).
Although the increase in prices has been moderate, it is possible this trend could continue as refinery maintenance wraps up, more expensive summer-blend gasoline becomes available and driving demand increases this spring.”
electric meter
Electric meter hookups’ 12MMA in February 2017 reached 798,231. Total hookups were up 1.7% over February 2016. The annual growth rate has been steady for the last 18 months. This hints at stable population growth and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.

Southern Nevada Economy is Sunny with a Few Clouds

Many of the Clark County and Las Vegas Valley trend lines continue to show gradual improvement, but not every metric is on the rise. The number of average weekly hours worked remained stagnant for the sixth month in a row and are unchanged year over year from December 2015. The upshot? Southern Nevada companies continue to depend pretty heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers) remains among the nation’s highest at 12.2% as of Q4, 2016.
1

2

employment index
The RCG Employment Index 12-month moving average (“12MMA”) for Clark County again ticked up by 0.1 points to 97.8 in December. The Index is up 0.9 points when compared to December 2015. For nearly 6 years the Index has been steadily climbing and is now 2.2 points below the peak. The Index peaked at 100 in November 2006.
job growth
The 12MMA of Clark County’s headline unemployment dropped to an even 6% in December. When compared to December 2015, the headline rate is down by 0.8 points. The rate reached its lowest level in October 2006 when it was just 4%.
On the other hand, the rate of job growth in the Las Vegas MSA continues to slow. In December, it was unchanged at 2.4% (12MMA). Job growth in Las Vegas is being affected similar to what is occurring at the national level. According to the Brookings Institution, the slowdown mainly due to decreasing demand for unskilled labor.
u3 and u6
The U-3 and U-6 unemployment rates for Nevada have both declined in Q4 by 0.3 points. The U-6 rate fell from 12.5% in Q3, 2016, to 12.2% in Q4. The U-3, or headline rate, fell under 6%, from 6.2% to 5.9%. Regarding the U-6 rate, Nevada is still among the worst in the nation, ahead of only New Mexico and Alaska. In terms of the U-3 rate, Nevada is doing only slightly better. Nevada is now out of the bottom five and tied with Illinois with the 7th highest rate in the nation at the start of 2017.
yoy construction
Construction jobs in the Las Vegas MSA continue growing at a steady pace as housing and commercial real estate demand rebound. Construction workers in Southern Nevada numbered 57,758 in December 2016 (12MMA), up 6,883 jobs (13.5%) from December 2015. Construction jobs have now grown for 53 straight months and represent 6.5% of the region’s job-base at the end of December. The latest number of jobs in the industry is still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all MSA jobs. It is unlikely we will see those pre-recession construction job numbers in the foreseeable future. This should not be cause for concern because construction is not considered a “primary industry” and can be volatile.
visitor volume
On a 12MMA basis, Clark County visitor volume in December was up from the previous month, growing by 0.12% after November’s weak 0.03% increase. When compared to December 2015, the YOY visitor count was up 1.5% in December. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%. 2016’s visitor total of 42.9 million is approximately 600,000 higher than the previous year’s total.
convention attendance
Monthly Clark County convention attendance increased by 0.23% in December compared to November (on a 12MMA basis) to 518,729. Compared to December 2015, convention attendance is up 7.7%. The 12MMA monthly peak attendance of 529,185 was in January 2007. December’s attendance represented 98% of the peak.
Convention attendance grew significantly in 2016. This can be attributed to a stronger national economy and business investment in marketing. The previous peak in YOY growth, eclipsed in the first month of 2016, was in February 2006 when convention attendance rose by 10.5%. The last two months of 2016 were the only ones in which YOY growth did not break 10%.
hotel rev per avail room
The 12MMA of hotel revenue per available room (RevPAR) in Clark County was $113.75 in December, an increase of $2.1 (1.9%) from November. Compared to December 2015, RevPAR is up $8.54 (8.1%) and continues on its streak of YOY growth that began in December 2010. The RevPAR 12MMA peak occurred in December 2007 at $119.43.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming rev net baccarat
Gaming revenue net of baccarat remains weak, decreasing in December 2016 by -0.37% to $707.7 million on a 12MMA basis. YOY growth in December was 2%. Gaming revenue net of baccarat is well below the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35. Millennials are preferring to spend their money on the clubs, restaurants and show experiences rather than gambling.
home sales
According to Home Builders Research, in December total (new and resales) Clark County home closings, which numbered 4,544 (12MMA), were down -0.59% from the previous month. The outlook is better when gauged on a YOY basis, with total home sales up by 7.9% compared to December 2015. Resales saw a YOY increase of 6.6% to 3,886, while new homes sales jumped 16.6% to 658. This was the 18th straight month of increasing YOY new home sales after 14 months of declines and the 15th straight month of YOY gains of over 10%. The most recent monthly peak occurred July 2012 with 4,777 sales.
median home price
Per Home Builders Research, the 12MMA median home price (new and resale) in December was $220,199, a 6.4% gain over December 2015. The peak of $305,333 was recorded in February 2007.
The median new home price in November was $323,340, up 4.0% from the previous year. The peak of $327,066 occurred in February 2007. This means that the current median new home price has recovered to 98.9% of its pre-recession peak.
The median resale home price was $202,774 in December, a 6.4% increase during the last 12 months. The peak of $286,833 was in April 2007. This means that the current resale price has recovered to 70.7% of its pre-recession peak. For comparison, the median resale home price in the Reno-Sparks MSA was $303,742 (12MMA).
The combined rate of home appreciation for new and resale homes had slowed considerably in mid-2015, but then started to accelerate again. It appears that at the end of 2016, home appreciation is again slowing down. In December 2015, the YOY price increase from 2014 was 9.9%. This is 3.5 percentage-points more than the 2016 figure. The annual peak of 35.8% growth occurred in February 2005.
30 year fixed
The 12MMA 30-year fixed rate mortgage in the Western Region increased slightly by 0.01 points to 3.62% in December after a 0.03-point decrease the previous month. Though small, this is the first increase after 11 straight months of steady decrease. The 10-year peak of 6.4% occurred in October 2006. The 30-year fixed rate mortgage should remain relatively low, but will likely to go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 149.2 in October, a rise of 5.7% compared to October 2015. The index peaked at 233.2 in December 2006. The latest index is 64% of the peak, making the region a competitive housing market. The greatest positive annual change (44.5%) in the index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
4 qma
2016 had a lackluster conclusion with 2 of 3 commercial vacancy rates increasing in Q4.
The Industrial market vacancy rate increased by 0.1 points to 5.2% in Q4. The situation was the same on a 4-quarter moving average basis with vacancy increasing by 0.1 points to 5.2% in Q4.
The Spec Office vacancy rate increased by 0.3 points to 20.3% in Q4. On a 4-quarter moving average basis the vacancy rate was up 0.2 points to 20.2% in Q4.
Anchored Retail was the only market to see vacancy decrease in Q4, dropping by 0.6 points to 10.5% in Q4, 2016; however, the 4-quarter moving average Retail rate fell only 0.2 points to 11%.
This is the first increase in vacancy in the Industrial market after 14 quarters of improvement, though it is no cause for concern. It largely reflects the quality of the remaining available space in the market. The vacancy rate is very low and developers continue to bring a large volume of new space to market. The Retail market, on the other hand, has only seen new space come to market in 1 of the last 8 quarters.
current commercial
As of January 3, 2017, the prime rate remained at 3.5%. The 10-year treasury bond rate rose by 0.04 points to 2.49%. The 30-day LIBOR ticked up by 0.14 points to 0.76%. Lender rates are expected to continue shifting upward, yet they remain relatively low and continue to benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: filling the excess capacity, especially in the office market, when job growth is moderate and companies remain hesitant about expanding their space footprint.
average weekly earnings
The Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in December was up by $1 compared to November, reaching $744, and is up $18 (2.3%) from December 2015. On an inflation-adjusted, YOY basis, earnings increased 1.1% in December 2016 compared to December 2015 to $651 (in 2007 dollars). Las Vegas’ average weekly real wage is now an even $100 (13.3%) below the most recent inflation-adjusted peak of $751 that occurred 9 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still closer to the trough than the peak.
average weekly hours
On a 12MMA basis, the number of average weekly hours worked in Las Vegas (Clark County) remained stagnant at 33.2 for the sixth month in a row. On a YOY basis average weekly hours are unchanged from December 2015. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, weak average hours worked have been accompanied by a slowly declining headline unemployment rate. In Q4-2016, the U-6 unemployment rate recorded a 0.3 point drop, so we remain optimistic that we will soon see increases in weekly hours worked.
Implication: Companies continue to depend heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (including discouraged and part-time workers), though declining, remains among the nation’s highest at 12.2% as of Q4, 2016.
unleaded
As of February 1, the price of regular unleaded in the Las Vegas MSA rose $0.04 (1.5%) from a month prior, resulting in a per gallon price of $2.41. Compared to this time last year, the price of regular unleaded is $0.12, or 5.1%, more.
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).”

Our Preview 2017 Presentation

Billed by the Las Vegas Metro Chamber of Commerce as “the Freakonomics of Las Vegas,” the Stat Pack team this week presented a top-down 2017 economic overview at Preview Las Vegas, the biggest gathering of Nevada business professionals each year.
Sign up to get our Friday Fact Pack in your Inbox over in the upper right hand corner of the site ———->
If you have any questions about the slide show or the Nevada economy, don’t hesitate to contact Stat Pack co-publishers Mike PeQueen, partner and director with HighTower Las Vegas, and John Restrepo, principal economist at RCG Economics.
 
 

Las Vegas Metro Trends Mostly Positive

With another month to go before we see year end (December 2016) data, job growth continues to slow but no major blips to report.
stat highlights

positive

employment index
The RCG Employment Index 12-month moving average (“12MMA”) for Clark County again ticked up by 0.1 points to 97.7 in November. The Index is up 0.9 points when compared to November 2015. The Index peaked at 99.8 in November 2006.
job growth & headline
The 12MMA of Clark County’s headline unemployment rate remained at 6.1% in November. When compared to November 2015, the headline rate is down by 0.8 points. The rate reached its lowest level in October 2006 when it was just 4%.
On the other hand, the rate of job growth in the Las Vegas MSA continues to slow. In November, it fell by 0.1 points to 2.4% (12MMA). Job growth in Las Vegas is being affected similar to what is occurring at the national level. According to the Brookings Institution, the slowdown mainly due to decreasing demand for unskilled labor.
yoy construction jobs
Construction jobs in the Las Vegas MSA continue growing at a steady pace as housing and commercial real estate demand rebound. Construction workers in Southern Nevada numbered 57,017 in November 2016 (12MMA), up 6,608 jobs (13.1%) from November 2015. Construction jobs have now grown for 52 straight months and represented 6.5% of the region’s job-base at the end of November. The latest number of jobs in the industry is still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all MSA jobs. It is unlikely we will see those pre-recession construction job numbers in the foreseeable future. This should not be cause for concern because construction is not considered a “primary industry” and can be volatile.
visitor volume
On a 12MMA basis, Clark County visitor volume in November was nearly unchanged from the previous month, growing by only 0.03% after October’s 0.05% decline. When compared to November 2015, the YOY visitor count was up 1.6% in November. Visitor totals for 2016 are ahead of what they were during the same period in 2015, with 39.7 million from January through November of 2016 compared to 39.1 million in the prior year. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
Monthly Clark County convention attendance decreased by 0.63% in November compared to October (on a 12MMA basis) to 517,536. However, compared to November 2015, convention attendance is up 8.8%. The 12MMA monthly peak attendance of 529,185 was in January 2007. November’s attendance represented 97.8% of the peak.
Convention attendance grew significantly in 2016, nearly equaling the growth of the prior 5-year period in the past 12 months alone. This can be attributed to a stronger national economy and business investment in marketing. The previous peak in YOY growth, eclipsed in the first month of 2016, was in February 2006 when convention attendance rose by 10.5%. November is the first month of 2016 that YOY growth did not break 10%.
hotel rev per avail
The 12MMA of hotel revenue per available room (RevPAR) in Clark County was $111.68 in November, a small increase of $0.23 (0.2%) from October. Compared to November 2015, RevPAR is up $6.74 (6.4%) and continues on its streak of YOY growth that began in December 2010. The RevPAR 12MMA peak occurred in December 2007 at $119.43.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming revenue net bacc
Gaming revenue net of baccarat continues to post meager growth, increasing in November 2016 by 0.1% to $710.4 million on a 12MMA basis. YOY growth in November was 2.4%. Gaming revenue net of baccarat remains well below the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35. Millennials are preferring to spend their money on the club scene, shopping and show experiences rather than gambling.
home sales
According to Home Builders Research, in November total (new and resales) Clark County home closings, which numbered 4,571 (12MMA), were up by 1.94% from the previous month. When gauged on a YOY basis, the improvement is more pronounced, with total home sales up by 11.3% compared to November 2015. Resales also saw a significant YOY increase of 10.6% to 3,926, while new homes sales jumped 15.7% to 645. This was the 17th straight month of increasing YOY new home sales after 14 months of declines and the 14th straight month of YOY gains of over 10%. The most recent monthly peak occurred July 2012 with 4,777 sales.
median home price
Per Home Builders Research, the 12MMA median home price (new and resale) in November was $219,850, a 7.5% gain over November 2015. The peak of $305,333 was recorded in February 2007.
The median new home price in November was $321,152, up 3.8% from the previous year. The peak of $327,066 occurred in February 2007. This means that the current median new home price has recovered to 98.2% of its pre-recession peak.
The median resale home price was $203,274 in November, an 8.3% increase during the last 12 months. The peak of $286,833 was in April 2007. This means that the current resale price has recovered to 70% of its pre-recession peak. By comparison, the Reno-Sparks average resale price for November was $310,950.
The combined rate of home appreciation for new and resale homes had slowed considerably in mid-2015, but then started to accelerate again. In November 2015, the YOY price increase from 2014 was 9%. This is 1.5 percentage-points more than the 2016 figure. The annual peak of 35.8% growth occurred in February 2005.
30 year fixed
The 12MMA 30-year fixed rate mortgage in the Western Region fell 0.03 points to 3.61% in November. The 10-year peak of 6.4% occurred in October 2006. This rate has been steadily decreasing for the last 11 months and should remain relatively low, but will are likely to go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 148.5 in September, a rise of 5.7% compared to September 2015. The index peaked at 233.2 in December 2006. The latest index is 63% of the peak, making the region a competitive housing market. The greatest positive annual change (44.5%) in the index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
multi indicator
Freddie Mac’s 12MMA Multi-Indicator Market index (MIMI) for the Las Vegas MSA increased to 64.3 (43% of the peak, see below) in October, a spike of 13.2% compared to October 2015. However, Las Vegas is still ranked near the bottom of the 100 rated metros. The index peaked at 148.4 in March 2006. The greatest (45.1%) change in the index was in May 2014 and the fastest 12MMA decline (-51.2%) was in December 2009.
The MIMI index measures the stability of local housing activity by combining current local market data with Freddie Mac data; specifically, by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of current mortgage payments in each market (healthy loans vs loans in default), and the local employment picture.
current commercial
As of December 2, 2016, the prime rate remained at 3.5%. The 10-year treasury bond rate rose by 0.62 points to 2.45%. The 30-day LIBOR ticked up by 0.08 points to 0.62%. Most lender rates increased since the start of November. While these rates are expected to continue shifting upward, they remain relatively low and continue to benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, combined with moderate job growth and companies remaining hesitant about expanding their space footprint.
taxable retail sales
Taxable retail sales in Nevada and Clark County continued to rise thanks to increased visitation, as well as local resident and business spending, but the YOY change is slowing as the local economy reflects uncertainty due to national and global trends. Sales hit $3.31 billion in October, up 4% compared to October 2015 on a YOY basis using a 12MMA. This year’s taxable sales through October were approximately $32.6 billion, while in 2015 the total over the same period was approximately $31.2 billion – more than $1 billion less than 2016 and putting taxable sales in Clark County on pace to exceed the previous year’s total.
Current taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government budgets. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the regional and national job markets since they are primary drivers of tourism spending in the region.
average weekly earnings
The Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in November was up by $3 compared to October, reaching $743, and is up $19 (2.5%) from November 2015. On an inflation-adjusted, YOY basis, earnings increased 1.4% in November 2016 compared to November 2015 to $651 (in 2007 dollars). Las Vegas’ average weekly real wage is now an even $100 (14%) below the most recent inflation-adjusted peak of $751 that occurred 9 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still closer to the trough than the peak.
average weekly hours
On a 12MMA basis, the number of average weekly hours worked in Las Vegas (Clark County) remained at 33.2 for the fifth month in a row. On a YOY basis average weekly hours are unchanged from November 2015. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, weak average hours worked have, at least, been accompanied by a slowly declining headline unemployment rate. In Q3-2016, the U6 unemployment rate recorded a 0.6 point drop, so we remain optimistic that we will soon see increases in weekly hours worked.
Implication: Companies continue to depend heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (includes discouraged and part-time workers), though declining, remains among the nation’s highest at 12.5% as of Q3, 2016.
regular unleaded
As of December 28, the price of regular unleaded in the Las Vegas MSA fell $0.05 (2.1%) from a month prior, resulting in a per gallon price of $2.35. Compared to this time last year, the price of regular unleaded is $0.19, or 7.6%, less.
From a national perspective, the national average price of gas has been ticking upward. Heading into the New Year, the average price consumers will pay at the pump is the highest it has been since 2014. According to AAA, “Moving into 2017, retail prices will continue to hinge on the ability of cartel countries to successfully implement production cuts, but retail averages are likely to increase leading up to the summer driving season as seasonal refinery maintenance gets underway this spring.”
electric meter
Electric meter hookups’ 12MMA in October reached 793,901. Total hookups were up 1.8% over October 2015. The annual growth rate has been steady for the last 11 months. This hints at stable population growth and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.

Positive Trends in Southern Nevada

Other than the commercial mortgage rate, which has gone up slightly since October 1, the Southern Nevada metrics are looking strong. The Valley’s biggest challenge is excess commercial capacity, especially in the office market, combined with only moderate job growth. Companies look to be hesitant about expanding their space footprint – and about hiring. Once President-elect Trump has taken office and any immediate economic shifts play out, Nevada employers will have more of the information they need to make decisions.

stat highlights

q over q
rcg employment index
The RCG Employment Index 12-month moving average (“12MMA”) for Clark County ticked up by 0.1 points to 97.5 in September. The Index is up 1.2 points when compared to September 2015. The Index peaked at 99.8 in November 2006.
job growth & headline
The 12MMA of Clark County’s headline unemployment rate fell in September by 0.1 percentage points to 6.3% after 4 straight months stuck at 6.4%. When compared to September 2015, the headline rate is down by 0.8 points. The rate reached its lowest level in October 2006 when it was just 4%.
Though the job growth rate in the Las Vegas MSA had been steadily trending downward for the previous 13 months, in September it held at 2.7% (12MMA). Job growth in Las Vegas has been similar to what is occurring at the national level. According to the Brookings Institution, this is mainly due to decreasing demand for unskilled labor.
u3 and u6
The U-3 and U-6 unemployment rates for Nevada have both declined in Q3. The U-6 rate fell from 13.1% in Q2, 2016, to 12.5% in Q3. The U-3, or headline rate, fell almost as much, from 6.7% to 6.2%. Nevada and New Mexico are tied with the second highest U-6 rate in the Nation, beating only Alaska. In terms of the U-3 rate Nevada is not doing much better, ranking among the bottom five, ahead of Alaska & New Mexico and tied with Louisiana & Mississippi.
yoy construction
Construction jobs in the Las Vegas MSA continue growing at a steady pace as housing and commercial real estate demand rebound. Construction workers in Southern Nevada now number 55,675 in September 2016 (12MMA), up 6,208 jobs (12.6%) since September 2015. Construction jobs have now grown for 50 straight months, and represent 6.4% of the region’s job-base at the end of September. The current number of jobs in the industry is still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all jobs. It is unlikely we will see those pre-recession construction job numbers in the foreseeable future. This should not be cause for concern because construction is not considered a “primary industry” and can be volatile.
visitor volume
On a 12MMA basis, Clark County visitor volume grew in September to 3.57 million, or 0.26%. When compared to September 2015, the YOY visitor count was up 2.4% in September 2016. Visitor totals for this year are ahead of the totals during the same period in 2015 with 32.5 million from January through September of 2016 compared to 31.9 million in the prior year. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
convention attendance
Monthly Clark County convention attendance increased by 0.94% in September compared to August (on a 12MMA basis) to 523,134. However, compared to September 2015, convention attendance jumped markedly – by 15.9%. The 12MMA monthly peak attendance of 529,185 was in January 2007. September’s attendance represented 98.9% of the peak.
Convention attendance has increased significantly over the last 12 months, nearly equaling the growth of the previous 5-year period. This can be attributed to a stronger national economy and business investment in marketing. The previous peak in YOY growth, eclipsed in the first month of 2016, was in February 2006 when convention attendance rose by 10.5%. YOY growth has been above 10% every month in 2016, and has been over 15% since June.
hotel rev per avail room
The 12MMA hotel revenue per available room (RevPAR) in Clark County was $111.20 in September, an increase of $1.19 (1.08%) from August. Compared to September 2015, RevPAR is up $8.58 (8.4%) and continues on its streak of YOY growth that began in December 2010. The RevPAR 12MMA peak occurred in December 2007 at $119.43.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
gaming revenue
Gaming revenue net of baccarat continues to post meager growth, increasing in September 2016 by 0.44% to $702 million on 12MMA basis. YOY growth in September was 2%. Gaming revenue net of baccarat remains well below the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35. Millennials are preferring to spend their money on, club scene, shopping event and show experiences rather than gambling.
home sales
According to Home Builders Research, in September total (new and resales) Clark County home sales (closings), which numbered 4,448 (12MMA), are up by 0.99% from the previous month. When gauged on a YOY basis, the improvement is more pronounced, with total home sales up by 8.2% compared to September 2015. Resales saw a 7.2% YOY increase to 3,821, while new homes sales jumped 14.9% to 628. This was the 15th straight month of increasing YOY new home sales after 14 months of declines and the 12th straight month of YOY gains of over 10%. The most recent monthly peak occurred July 2012 with 4,777 sales.
median home price
Per Home Builders Research, the 12MMA median home price (new and resale) in September was $217,507, an 8.1% gain over September 2015. The peak of $305,333 was recorded in February 2007.
The median new home price in September was $318,955, up 4.6% from the previous year. The peak of $327,066 occurred in February 2007. This means that the current median new home price has recovered to 97.6% of its pre-recession peak.
The median resale home price was $200,715 in September, an 8.3% increase during the last 12 months. The peak of $286,833 was in April 2007. This means that the current resale price has recovered to 70% of its pre-recession peak. By comparison, the Reno-Sparks average resale price for September was $299,079.
The combined rate of home appreciation for new and resale homes had slowed considerably in mid-2015, but then started to accelerate again. In September 2015, the YOY price increase from 2014 was 8.2%. This is 0.1 percentage-point more than the 2016 figure. The annual peak of 35.8% growth occurred in February 2005.
30 year fixed rate
The 12MMA 30-year fixed rate mortgage in the Western Region fell 0.03 points to 3.64% in September. The 10-year peak of 6.4% occurred in October 2006. This rate has been steadily decreasing for the last 9 months and should remain relatively low.
case shiller home price
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 147.8 in August, a rise of 5.8% compared to August 2015. The index peaked at 233.2 in December 2006. The latest index is 63% of the peak, making the region a competitive housing market. The greatest positive annual change (44.5%) in the index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
multi indicator
Freddie Mac’s 12MMA Multi-Indicator Market index (MIMI) for the Las Vegas MSA increased to 62.9 (42% of the peak, see below) in August, a spike of 12.5% compared to August 2015. However, Las Vegas is still ranked near the bottom of the 100 rated metros. Growth is still not quite as much as the 15.8% increase recorded between July 2014 and 2015, much like with the Case-Shiller index. The index peaked at 148.4 in March 2006. The greatest (45.1%) change in the index was in May 2014 and the fastest 12MMA decline (-51.2%) was in December 2009.
The MIMI index measures the stability of local housing activity by combining current local market data with Freddie Mac data; specifically, by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of current mortgage payments in each market (healthy loans vs loans in default), and the local employment picture.
4 qma housing opp
The Housing Opportunity Index (“HOI”) for the Las Vegas MSA improved for the 6th quarter in a row in Q3, 2016 after 7 quarters of decline. It changed from 66.3 in Q2, 2016 to 67.0 in Q3, 2016 on a 4-quarter moving average basis. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 65.3.
The U.S. index dropped from 63.1 in Q2, 2016 to 62.9 in Q3, 2016. Housing prices nationally appear to be stabilizing.
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.
4 qma apartment market
The Las Vegas Valley’s 12MMA apartment vacancy rate continues to decline gradually, from 7.9% in Q2, 2016 to 7.8% in Q3. This is a 0.6-point drop compared to Q3, 2015. Apartment vacancies are slowly recovering. Over the last 9 years, the apartment vacancy rate peaked at 10.8% in Q2, 2010. It hit its lowest mark of 5.1% in Q1, 2007. The region’s apartment market could be moving toward a supply-constrained market in some areas if this downward vacancy trend continues.
4 qma commercial market
Commercial vacancy rates in the Las Vegas Valley mostly fell in Q3, 2016.
The Industrial market vacancy rate fell by 0.1 points to 5.1% in Q3. The situation was the same on a 4-quarter moving average basis with vacancy falling by 0.1 points to 5.1% in Q3.
The Spec Office vacancy fell by 0.2 points to 20% in Q3. On a 4-quarter moving average basis the vacancy rate was unchanged at 20% in Q3.
Vacancy in the Anchored Retail market increased slightly for the quarter, growing by 0.1 points to 11.1% in Q3, 2016; however, the 4-quarter moving average Retail rate fell 0.1 points to 11.2%.
Overbuilding of Office units during the boom continues to prevent the vacancy rate from dropping faster. It will take years of natural growth to get the Spec Office rate under 10%.
current commercial
As of November 2, 2016, the prime rate remained at 3.5%. The 10-year treasury bond rate rose by 0.23 points to 1.83%. The 30-day LIBOR ticked up slightly to 0.54%. Most lender rates increased since the start of October. Still, these rates remain relatively low and continue to benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, combined with moderate job growth and companies remaining hesitant about expanding their space footprint.
taxable retail sales
Taxable retail sales in Nevada and Clark County continued to rise thanks to increased visitation, as well as local resident and business spending, but the YOY change is slowing as the local economy reflects uncertainty due to national and global trends. Sales hit $3.29 billion in August, up 4.3% compared to August 2015 on a YOY basis using a 12MMA. This year’s taxable sales total through August was approximately $26.0 billion, while in 2015 the total over the same period was approximately $24.9 billion, a more than $1 billion less and putting taxable sales in Clark County on pace to exceed the previous year’s total.
Current taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government budgets. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the regional and national job markets since they are primary drivers of tourism spending in the region.
average weekly earnings
The Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in September were unchanged from August at $738, but are up $20 (2.7%) from September 2015. On an inflation-adjusted, YOY basis, earnings increased 1.8% in September 2016 compared to September 2015 to $649 (in 2007 dollars). Las Vegas’ average weekly real wage remains $102 (14%) below the most recent inflation-adjusted peak of $751 that occurred 9 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still closer to the trough than the peak.
average weekly hours
On a 12MMA basis, the number of average weekly hours worked in Las Vegas (Clark County) remained at 33.2 for the third month in a row. On a YOY basis average weekly hours are unchanged from September 2015. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, stagnant and declining average hours worked have, at least, been accompanied by a slowly declining headline unemployment rate. In Q3 of 2016 the U6 unemployment rate recorded a 0.6 point drop, so we remain optimistic that we will soon see increases in weekly hours worked. At this point in the recovery; however, Reno (35.2 hours) is bucking state and national trends and beating Las Vegas.
Implication: Companies continue to depend heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (includes discouraged and part-time workers), though declining, remains among the nation’s highest at 12.5% as of Q3, 2016.
regular unleaded fuel
As of November 10, the price of regular unleaded continues to tick upward, increasing by $0.04 (1.8%) from $2.45 a month before. When compared to the previous year, the average price per gallon for regular unleaded gasoline is down by 10.2%, or $0.28, from $2.77 to $2.49.
According to AAA, “Weighing on the market are the continued negotiations amongst OPEC and non-OPEC members. The Secretary-General of OPEC announced today that the group was still committed to developing an output deal to cut oil production, but no formal agreement has been reached. Traders will keep a close eye on the Colonial Line 1 restart and upcoming OPEC meetings. At the close of Friday’s formal trading session on the NYMEX, WTI was down 59 cents to settle at $44.07 per barrel.”
electric meter hookups
Electric meter hookups’ 12MMA in September reached 792,961. Total hookups were up 1.9% over September 2015. The annual growth rate has been steady over the last 9 months at 1.9%. This hints at stable population growth and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.

Southern Nevada Economy Still Stable

We’re happy to bring you all the latest data from Las Vegas and Clark County, most of it positive. Click through for metrics – and Share!
stat highlights

positive

 rcg employment
The RCG Employment Index 12-month moving average (“12MMA”) for Clark County ticked up by 0.1 points to 97.4 from June to July. The Index is up 0.9 points when compared to July 2015. The Index peaked at 99.8 in November 2006.
 
job growth
The 12MMA of Clark County’s headline unemployment rate again did not change, remaining at 6.4% in July 2016 for the 4th month in a row. When compared to July 2015, the headline rate improved at 0.8 points lower. The rate reached its lowest level in October 2006 when it was just 4%.
Job growth in the Las Vegas MSA continues to decline, again falling by 0.1 percentage-points to 2.8% (12MMA) in July 2016. The YOY job growth rate for the region fell by 1.5 percentage-points from 4.3% in July 2015. Las Vegas job growth has slowed for 11 straight months, similar to what has happened at the national level. According to the Brookings Institution, this is mainly due to decreasing demand for unskilled labor.
 
yoy construction
Construction jobs in the Las Vegas MSA continue growing at a steady pace as housing and commercial real estate demand rebound. Construction workers in Southern Nevada numbered 54,450 in July 2016 (12MMA), up 5,850 jobs (12%) over July 2015. Construction jobs have now grown for 48 straight months, and represented 6.1% of the region’s job-base at the end of July. The current number of jobs in the industry is still far below the November 2006 peak of 108,833 when they accounted for 11.4% of all jobs. It is unlikely we will see those pre-recession construction job numbers for the foreseeable future. This is not necessarily a bad thing since construction is not considered a “primary industry” and can be volatile.
 
visitor volume
On a 12MMA basis, Clark County visitor volume grew in July to 3.56 million, or 0.22%. When compared to July 2015, the YOY visitor count was up 2.7% in July 2016. So far this year, visitor totals are slightly ahead of the totals during the same period in 2015 with 24.9 million from January through July of 2016 compared to 24.1 million in the prior year. The month of greatest YOY growth since October 2005 was September 2011, when visitor volume grew by 4.5%.
 
convention attendance
Monthly Clark County convention attendance increased by 0.8% in July compared to June (on a 12MMA basis) to 516,479. However, compared to July 2015, convention attendance jumped markedly – by 18.9%. The monthly peak attendance of 529,185 was January 2007. July’s attendance represented 97.6% of the peak.
Convention attendance has increased significantly over the last 12 months, nearly equaling the growth of the previous 5-year period. This can be attributed to a stronger national economy and business investment in marketing. The previous peak in YOY growth, now eclipsed, was in February 2006 when convention attendance rose by 10.5%.
 
hotel rev per avail room
The 12MMA hotel revenue per available room (RevPAR) in Clark County was $109.41 in July, an increase of $1.25 (1.16%) from June. Compared to July 2015, RevPAR is up $7.53 (7.4%) and continues on its streak of YOY growth that began in December 2010. The RevPAR peak occurred in December 2007 at $119.43. The yearly rate of growth has generally been around 3% or more since the start of 2011.
Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a resort’s or hotel’s room revenue by the room count and the number of days in the period being measured.
 
gaming rev net baccarat
July’s 12MMA gaming revenue (net of baccarat) of $698.9 million was an increase of 0.45% from June and was up 2% compared to July 2015. The monthly peak ($834.4 million) occurred in October 2007.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering of typical gamblers, especially U.S. gamblers. Slot revenues continue to remain lackluster for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35.
 
home sales
According to Home Builders Research, total (new and resales) Clark County home sales (closings) in July, which numbered 4,369 (12MMA), are down -0.51% compared to June, the first time we have seen a decrease from the previous month since October 2015. When gauged on a YOY basis, total home sales continued to rise, by 7.8% compared to July 2015. Resales saw a 6.9% YOY increase to 3,768, while new homes sales jumped 13.4% to 602. This was the 13th straight month of increasing YOY new home sales after 14 months of declines. The most recent monthly peak occurred July 2012 with 4,777 sales.
 
median home price
Per Home Builders Research, the 12MMA median home price (new and resale) in July was $215,235, an 8.6% gain over July 2015. The peak of $305,333 was recorded in February 2007.
The median new home price in July was $318,086, again up 5.4% from the previous year. The peak of $327,066 occurred in February 2007. This means that the current median new home price has recovered to 97% of its pre-recession peak.
The median resale home price was $198,574 in July, an 8.8% increase during the last 12 months. The peak of $286,833 was in April 2007. This means that the current resale price has recovered to 69% of its pre-recession peak. By comparison, the Reno-Sparks average resale price for July was $295,329.
The combined rate of home appreciation for new and resale homes had slowed considerably in mid-2015, but then started to accelerate again. In July 2015, the YOY price increase from 2014 was 7.6%. This is 1 percentage-point less than the 2016 figure. The annual peak of 35.8% growth occurred in February 2005.
 
30 yr fixed
The 12MMA 30-year fixed rate mortgage in the Western Region fell 0.04 points to 3.71% in August. The 10-year peak of 6.4% occurred in October 2006. This rate has been decreasing for the last 7 months and should remain relatively low.
 
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 146.5 in June, a rise of 5.9% compared to June 2015. The index peaked at 233.2 in December 2006. The latest index is 63% of the peak, making the region a competitive housing market. The greatest positive annual change (44.5%) in the index occurred in March 2005, while the greatest negative change (-31.8%) occurred in August 2009. These trends are similar to those reported by Home Builders Research.
 
multi indicator
Freddie Mac’s 12MMA Multi-Indicator Market index (MIMI) for the Las Vegas MSA increased to 62.0 (42% of the peak, see below) in June, a spike of 12.9% compared to June 2015. However, Las Vegas is still ranked near the bottom of the 100 rated metros. Growth is still not quite as much as the 17.1% increase recorded between June 2014 and 2015, much like with the Case-Shiller index. The index peaked at 148.4 in March 2006. The greatest (45.1%) change in the index was in May 2014 and the fastest 12MMA decline (-51.2%) was in December 2009.
The MIMI index measures the stability of local housing activity by combining current local market data with Freddie Mac data; specifically, by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of current mortgage payments in each market (healthy loans vs loans in default), and the local employment picture.
 
housing opportunity
The Housing Opportunity Index (“HOI”) for the Las Vegas MSA improved for the 5th quarter in a row in Q2, 2016 after 7 quarters of decline. It went from 65.1 in Q1, 2016 to 66.3 in Q2, 2016 on a 4-quarter moving average basis. The Las Vegas HOI peaked at 86.2 in Q1, 2012. It bottomed out at 15.4 in Q1, 2007 at the height of the housing boom. The 10-year average is 63.0.
The U.S. index dropped from 63.4 in Q1, 2016 to 63.1 in Q2, 2016. Housing prices appear to be stabilizing and if the employment situation continues to improve, we may see the index rise in the future.
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.
 
current commercial
As of September 1, 2016 the prime rate remained at 3.5%. The 10-year treasury bond rate rose by 0.02 points to 1.58%. The 90-day LIBOR increased 0.03 points to 0.52%. The Life Company, CMBS, Agency and floating rates saw increases. Despite these small increases these rates remain relatively low and benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, combined with moderate job growth and companies remaining hesitant about expanding their space footprint.
 
taxable retail
Taxable retail sales in Nevada and Clark County continued to rise thanks to increased visitation, as well as local resident and business spending, but the YOY change is slowing as the local economy reflects uncertainty due to national and global trends. Sales hit $3.27 billion in June, up 4.7% compared to June 2015 on a YOY basis using a 12MMA. This year’s taxable sales total through June was approximately $19.4 billion, while in 2015 the total over the same period was approximately $18.6 billion, thus putting taxable sales in Clark County on pace to exceed the previous year’s total.
Current taxable sales are the highest ever recorded by the State of Nevada on a nominal basis (not inflation-adjusted). As such, they have boosted local and state government budgets. Steadily improving local, regional and national job markets are key to this improvement. This is especially true regarding the regional and national job markets since they are primary drivers of tourism spending in the region.
 
average weekly earnings
The Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in July were up $2 from June to $737 and are up $25 (3.5%) from July 2015. On an inflation-adjusted basis, earnings continued to improve as well, increasing by 2.8% in July 2016 compared to July 2015 to $649 (in 2007 dollars). Still, Las Vegas’ average weekly real wage remains $102 (14%) below the most recent inflation-adjusted peak of $751 that occurred in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas is still closer to the trough than the peak.
 
average weekly hours
On a 12MMA basis, the number of average weekly hours worked in Las Vegas (Clark County) ticked up after 4 straight months at 33.1, increasing by 0.1 points to 33.2. Although, on a YOY basis, average weekly hours are unchanged from July 2015. The 7-year peak of 36.9 hours occurred in October 2008. As we’ve noted, stagnant and declining average hours worked have, at least, been accompanied by a dropping headline unemployment rate, implying that more consistent hourly increases may be finally coming. This is perhaps just the beginning of steady growth in average weekly hours worked. At this point in the recovery; however, Reno (35.1 hours) is bucking state and national trends and beating Las Vegas.
Implication: Companies continue to depend heavily on part-time workers. For this reason, Nevada’s U-6 unemployment rate (includes discouraged and part-time workers) remained the nation’s highest at 13.1% as of Q2, 2016.
 
regular unleaded
As of September 1, the price of regular unleaded fuel decreased by $0.02 (-1%) from $2.42 a month before, generally unchanged. When compared to the previous year, the average price per gallon for regular unleaded gasoline declined significantly by -24.8%, from $3.19 to $2.40.
According to the AAA, “Market watchers will continue to monitor possible interest rate increases by the U.S. Federal Reserve and any signs that the Organization of Petroleum Exporting Countries may consider an agreement that would limit production in an effort to influence prices higher. Members of OPEC are due to meet informally in Algeria on Sept. 26-28 on the sidelines of the International Energy Forum. There are few expectations of any real meaningful agreement and the market may not see any changes impacting the cost of crude oil until the meeting has commenced.”
 
electric meter hookups
Electric meter hookups’ 12MMA in July reached 790,418. Total hookups were up 1.9% over July 2015. The annual growth rate has been steady over the last 7 months at 1.9%. This hints at stable population growth and household formations in the Valley. The annual peak growth rate occurred March 1990 at 10.5%.
 
employment permit
A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. It compares monthly job growth to the number of housing permits issued during the same month. The E-P Ratio for Clark County fell 0.1 points from 1.6 in June to 1.5 in July on a 12MMA basis. When compared to July 2015 the E-P Ratio dropped 1.4 points from 2.9. According to the general consensus, an E-P Ratio between 1.0 and 2.0 that is level indicates a stable market.
 
Commercial market vacancy
Commercial vacancy rates in the Las Vegas Valley mostly fell in Q2, 2016.
The Industrial market vacancy rate remained unchanged at 5.2% in Q2. On a 4-quarter moving average basis it dropped by 0.1 points from Q1 to 5.2% in Q2.
The Spec Office vacancy saw a small uptick in vacancy from the previous quarter, up 0.1 points to 20.2% in Q2. On a 4-quarter moving average basis it rose from 19.9% in Q1 to an even 20% in Q2.
Vacancy in the Anchored Retail market decreased for the quarter, declining by 0.3 points to 11.0% in Q2, 2016. The 4-quarter moving average Retail rate fell 0.2 points to 11.3%.
Overbuilding of Office units during the boom continues to prevent the vacancy rate from being from dropping faster. It will take years of natural growth to get the Spec Office rate under 10%.