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LV NV indicators

LV NV numbers

 
 
LV RCG
The RCG Jobs index 12-month moving average (“12MMA”) for Clark County increased 0.1 points between August and September to 96.6 and is up 1.2 points compared to September 2014. The index is steadily moving upward as the Valley’s “headline” jobless rate continues to drop. The peak of 99.8 occurred in December 2005.
 
LV Jobs
The 12MMA in Clark County’s headline unemployment rate did not change in September, remaining at 7.1% compared to August, but it was down 1.1 percentage-points compared to September 2014. However, the region’s Y-0-Y job growth rate declined 0.2 points to 3.2% compared to August, and was down 0.5 points compared to September 2014. The most recent spate of growth peaked at 3.9%, and it has declined for six of the last seven months. However, this is not necessarily a bad sign since the job growth rate is expected to slow as the economy moves toward equilibrium.
 
LV unemployment
The Nevada U-6 unemployment rate fell to 14.8% in Q3, 2015, down 0.4 points since Q2. The U-3, or headline rate, declined by 0.2 points. While this rate is improving, the state’s overall job market (because of Las Vegas) continues to face headwinds compared to the rest of the nation. The Nevada U-6 rate is 1.2 points behind second-worst state, Arizona. In terms of the U-3 rate, Nevada continues to rank last. It was 50th of the states in Q3 trailing #49 West Virginia by 0.1 points.
 
LV construction
Construction jobs in Southern Nevada (Las Vegas MSA) numbered 49,750 in September (12MMA), representing a jump of 5,650 jobs (12.8%) compared to September 2014. Construction activity continues to pick up. Jobs in this sector have now grown for 38 straight months and we hear that the construction industry is having trouble finding workers, especially skilled workers. Southern Nevada construction jobs 12MMA peaked at 108,833 in November 2006.
 
LV Visitor
On a 12MMA basis, Clark County visitor volume rose in September compared to August, to 3.49 million. And it was up 2.6 percent Y-O-Y. We are confident that Southern Nevada’s visitation numbers will continue on a generally upward trajectory for the rest of the year.
 
LV Convention
Clark County convention attendance increased 1.7% in September compared to August (on a 12MMA basis), to 447,682. And convention attendance to Southern Nevada rose by 2.2% from September 2014. This is the highest mark since February 2009. This said, the general trend appears to be increasing at a less than optimal rate.
 
LV Hotel Rev.
The 12MMA hotel revenue per available room (RevPAR) in Clark County rose by $1.15 in September compared to August to $102.62. RevPAR is up 2.8% compared to September 2014 and continues its steady progress. However, the rate of growth has been slowing over the year. Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a gaming resort’s total hotel room revenue by the room count and the number of days in the period being measured.
 
LV Gaming
September’s 12MMA gaming revenue (net of baccarat) of $688.1 million decreased 0.11% compared to August ($688.9 million), but was up 2.6% relative to September 2014. That makes five months of Y-O-Y growth of at least 1.5%. These are the first consecutive months of such growth since May 2012 (13 months). Net of baccarat revenues are largely comprised of slot revenues, which generally reflect typical gaming spending of average Americans. Slot revenue growth continues to be challenged for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35.
 
LV Home
Total (new and resales) Clark County September home sales (closings), which numbered 4,111 (12MMA), rose by 9.4% from September 2014. Resales saw a 9.4% Y-O-Y jump in September to 3,565, while new homes sales increased 9.5% to 546. This marked three straight months of rising Y-O-Y new home sales after 14 months of declines – a good sign for the region’s plodding housing recovery.
 
LV Price
According to Home Builders Research, the 12MMA median home price (new and resale) for September was $201,283, an 8.2% jump over September 2014. The median new home price was $304,816, up 4.6% in the last 12 months. The median resale home price was $185,299 in September, reflecting a 9.2% increase during the last 12 months. – a good sign for the region’s homeowners, developers and brokers, but may be not so much for first time homebuyers. The Reno average resale price for September was much higher at $273,889.
The combined rate of home appreciation for new and resale homes has slowed considerably during the last year. In September 2014, the Y-O-Y price increase from September 2013 was 14.5%. But, it has slowly picked back up after bottoming out at 5.5% growth in April 2015.
 
LV 30
Mirroring the slowdown in home sales over the last year, the 12MMA 30-year fixed rate mortgage in the Western Region was down to 3.80% in October. This rate will remain relatively low as the Federal Reserve continues to try to stimulate consumer and business spending and demand, and while inflationary pressures remain low.
 
LV Case-SHiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 139.8 in August, an increase of 6.6% compared to August 2014. This was about one-third of the 20.5% increase recorded between August 2013 and August 2014. These increases are similar to those reported by Home Builders Research.
 
LV Commercial Mortgage
The prime rate remains at 3.25%. However, The 10-year treasury bond rate has increased in the last month, from 2.07% to 2.23%. The 90-day LIBOR remained 0.33. Lender rates were split, though. Also, compared to three months ago, the 90-day LIBOR is up significantly. While, these rates remain historically low, they, and the loan spreads, have increased significantly over the last month.
 
LV Retail
Taxable retail sales in Nevada and Clark County continue to rise, thanks to increased visitation and consumer spending. Taxable sales hit $3.16 billion in August, up 6.3% compared to August 2014, on a 12MMA basis. Retail sales figures are now higher than the pre-recession highs of 2007 and continue to be encouraging for future state and county 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.
 
LV Earnings
Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in September rose to $719, a 3.0% increase over September 2014. On an inflation-adjusted basis, weekly earnings are starting to improve, as well, up 2.7% in September compared to September 2014, to $638 in 2007 dollars. The inflation adjusted peak of $751 occurred in August 2007.
 
LV Hours
On a 12MMA basis, the number of weekly hours worked in Las Vegas (Clark County) in September held steady at 33.2 hours for the fourth straight month, but was down 0.3 hours from the 33.5 recorded in September 2014. As we’ve noted, stagnant and even dropping average hours worked have accompanied a dropping headline unemployment rate. At this point in the recovery, Reno is beating Las Vegas.
Implication: Companies continue to depend heavily on part-time workers. For this reason, the U-6 unemployment rate (includes discouraged and part-time workers) in Nevada remains the nation’s highest at 14.8%.
 
LV Fuel
According to AAA, as of November 2, the average price per gallon for regular unleaded gasoline dropped by 10.1%, from $3.10 a year ago to $2.78. Between October 2 and November 2, the price of unleaded also declined, by $0.20 per gallon, or 6.8%. We expect gas prices to remain less expensive compared to last year through the end of 2015.
 
LV Electric
Electric meter hookups’ 12MMA in August reached 776,848, up 2.0% over August 2014. The annual growth rate has been fairly steady recently, but this marks the first time that growth has hit 2% since December 2007. This hints at increased population growth, household formations and business expansions in the Valley.

Southern Nevada Trends Show Steady Improvement

All but two Las Vegas economic indicators – hotel revenue per available room (RevPAR) and retail market vacancies – are green based on the latest stats and data

Stat & Trend Highlights

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LV VV Oct

On a 12MMA basis, Clark County visitor volume rose in August compared to July, up to 3.47 million. It is up 2.3 percent year-over-year. In general, the upward trend in visitor volumes returned during the last several months. We are confident that Southern Nevada’s visitation numbers will continue on a generally upward trajectory for the rest of the year.
 

LV CA Oct

Clark County convention attendance increased 2.1% in August compared to July (on a 12MMA basis), to 440,105. This represented just a 0.4% rise compared to August 2014. Monthly convention attendance has bounced around between approximately 420,000 and 440,000 for 18 months. The general trend appears to be leveling off, or possibly increasing at an anemic rate.
 

LV Hotel OctThe 12MMA hotel revenue per available room (RevPAR) in Clark County declined slightly by $0.40 in August compared to July to $101.47. RevPAR is up 1.8% compared to August 2014 and continues its steady progress. However, the rate of growth has been slowing over the course of the past year.

Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a gaming resort’s total hotel room revenue by the room count and the number of days in the period being measured.
 

LV Gaming Oct

August’s 12MMA gaming revenue (net of baccarat) of $688.9 million increased 0.51% compared to July ($685.3 million) and was up 2.5% relative to August 2014. That makes four months of Y-O-Y growth of at least 1.5%. These are the first consecutive months of such growth since May 2012. These net baccarat revenues are largely comprised of slot revenues, which generally reflect typical gaming spending of average Americans. However, slot revenues continue to remain lackluster for two reasons:  constrained disposable income and changing spending patterns, especially among adults under the age of 35.
 

LV Home Oct

Total (new and resales) Clark County August home sales (closings), which numbered 4,067 (12MMA), rose by 8.2% from August 2014. Resales saw a 9% Y-O-Y jump in August to 3,550, while new homes sales increased 3.2% to 517. This marked two straight months of increasing Y-O-Y new home sales after 14 months of declines – a good sign for new housing subdivisions.
 

LV Price Oct

According to Home Builders Research, the 12MMA median home price (new and resale) for August was $199,343, a 7.9% jump over August 2014. The median new home price was $303,100, up 5.0% in the last 12 months. The median resale home price was $184,049 in August, reflecting a 9.1% increase during the last 12 months. (As a point of comparison, the Reno average resale price for August was $270,056.)
The combined rate of home appreciation for new and resale homes has slowed considerably during the last year. In August 2014, the Y-O-Y price increase from August 2013 was 16.3%. We believe that resale prices will continue to increase above the rate of inflation through 2015, but that this increase will be substantially less than it was last year on a moving average basis.
 

LV 30 yr Oct

Mirroring the slowdown in home sales, the 12MMA 30-year fixed rate mortgage in the Western Region was down to 3.82% in September. This rate will remain relatively low as the Federal Reserve continues to try to stimulate consumer and business spending and demand.
 

LV CS Oct

The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 138.4 in June, an increase of 7.5% compared to June 2014. This was about one-third of the 23.5% increase recorded between June 2013 and June 2014. These increases are similar to those reported by Home Builders Research. The rate of growth in the home price index is slowing down, reflecting the same dynamic seen in local housing price data.
 

LV Apartment Oct

The 12MMA apartment vacancy rate in the Las Vegas Valley declined to 8.4% in Q3, 2015. This is a 0.3 percentage-point drop compared to Q2, 2015 and 0.7-point drop compared to Q3, 2014. It looks like apartment vacancies are slowly recovering.
 

LV Commerical Oct

 
Commercial vacancy rates in the Las Vegas Valley continued to generally improve in Q3, 2015. The Industrial market rate declined to 5.0%, also dropping on a 4-quarter moving average basis to 6.3% on the strength of the Warehouse/Distribution sector. This is a 0.9 percentage-point decrease compared to Q2, 2015. The Spec Office vacancy rate improved for the second straight quarter, decreasing 0.3 points to 21.3%, and fell on a 4-quarter moving average basis to 21.5% from 21.6% in Q2, 2015. The Anchored Retail rate decreased by 0.3 points to 11.6% in Q3, 2015. The moving average of the rate, however, increased 0.1 points to 11.7%.
Still, many office and retail properties that are well-designed and well-located are thriving. But there are others that were poorly conceived, poorly designed and poorly located that still anguish, and these are the projects that are keeping the overall vacancy numbers up.
 
LV mortgage Oct
The prime rate remains at 3.25%. The 10-year treasury bond rate has declined in the last month, from 2.16% to 2.07%. The 90-day LIBOR remained 0.33. Lender rates were split, though. Also, compared to three months ago, the 90-day LIBOR is up significantly. Still, these rates remain historically low and benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, plus only moderate job growth.
 

LV retail Oct

Taxable sales in Nevada and Clark County continue to rise, thanks to increased visitation and consumer spending. Taxable retail sales hit $3.15 billion in July, up 7.2% compared to July 2014, on a 12MMA basis. Retail sales figures are now higher than the pre-recession highs of 2007 and continue to be encouraging for future state and county 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.
 

LV Fuel Oct

According to AAA, as of October 12, the average price per gallon for regular unleaded gasoline dropped by 12.3%, from $3.36 a year ago to $2.94. Between September 12 and October 12, the price of unleaded also declined, by $0.22 per gallon, or 7.0%. We expect gas prices to remain less expensive compared to last year through the end of 2015.
 

Lv electric Oct

Electric meter hookups’ 12MMA in July reached 775,595, up 1.8% over July 2014. The annual growth rate has been fairly steady for 23 months, bouncing between 1.2% and 1.9%. This corroborates the population growth projections for the Valley.
 

LV product Oct

Gross metropolitan product (“GMP”) figures for 2014 were released in the last few weeks and Las Vegas posted another 2% gain in inflation-adjusted, or real, GMP. This makes two years in a row of growth. Because it is adjusted for inflation, positive growth in this measure of GMP is always a good sign. Job growth in 2014 was 3.3 percent. Both these figures beat their 12-year averages. These results also bode well for 2015’s numbers.
 

LV

A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. The E-P ratio for Clark County was 3.7 in August, on 12MMA basis, compared to 6.2 in August 2014. This ratio appears to have leveled off since March. According to the general consensus, an E-P Ratio above 2.0 that is going up or flat indicates that the local housing market is healthy.
 

Clark County Indicators Rising or Holding Steady

Stat Highlights

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lvindicators

 

lvemployment

The RCG Jobs index 12-month moving average (“12MMA”) for Clark County remained unchanged between July and August at 96.5, but is up 1.4 points compared to August 2014. The index is steadily moving upward as the Valley’s “headline” jobless rate continues to drop. The peak of 99.8 occurred in December 2005.
 
 

lvjob

The 12MMA in Clark County’s headline unemployment rate dropped 0.1 points in August to 7.1% compared to July. And, it was down 1.3 percentage-points compared to August 2014. However, the region’s Y-0-Y job growth rate was down 0.1 points from 3.5% compared to July, and was down 0.2 points to 3.4% compared to August 2014. The most recent spate of growth peaked at 3.9%, and growth has declined for five of the last six months. However, this is not necessarily a bad sign since the growth rate is expected to slow as the economy nears equilibrium.
 
 

lvconstruction

Construction jobs in Southern Nevada (Las Vegas MSA) numbered 49,200 in August (12MMA), representing an increase of 5,508 jobs (12.6%) compared to August 2014. Construction activity continues to pick up. Jobs in this sector have now grown for 37 straight months. Construction jobs 12MMA peaked at 108,833 in November 2006.
 
 

lvhome

Total (new and resales) Clark County July home sales (closings), which numbered 4,054 (12MMA), rose by 6.8% from July 2014. Resales saw a 7.6% Y-O-Y jump in July to 3,523, while new homes sales increased 2.0% to 531. This was the first increase in Y-O-Y new home sales in 15 months – a good sign for new housing subdivisions.
 
 

lvmedianhome

According to Home Builders Research, the 12MMA median home price (new and resale) for July was $198,196, a 7.6% jump over July 2014. The median new home price was $301,815, up 5.2% in the last 12 months. The median resale home price was $182,449 in July, reflecting an 8.7% increase during the last 12 months. The Reno average resale price for July was $266,723.
The combined rate of home appreciation for new and resale homes has slowed considerably during the last year. In July 2014, the Y-O-Y price increase from July 2013 was 19%. We believe that resale prices will continue to increase above the rate of inflation through 2015, but that this increase will be substantially less than it was last year on a moving average basis.
 
 

lvcommercial

The prime rate remains at 3.25%. The 10-year treasury bond has remained essentially unchanged in the last month, from 2.17% to 2.16%. The 90-day LIBOR, however, has increased from 0.30 to 0.33. Compared to three months ago, the 90-day LIBOR is up significantly. Still, these rates remain historically low and benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, plus only moderate job growth.
 
 

lvretail

Taxable sales in Nevada and Clark County continue to rise, thanks to increased visitation and consumer spending. Taxable retail sales hit $3.12 billion in June, up 7% compared to June 2014, on a 12MMA basis. Retail sales figures are now higher than the pre-recession highs of 2007 and continue to be encouraging for future state and county 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.
 
 

lvweekly

Las Vegas MSA 12MMA average weekly earnings (not inflation-adjusted) in August rose to $715, a 2.4% increase over August 2014. On an inflation-adjusted basis, earnings are starting to improve, as well, up 1.9% in August compared to August 2014, to $634 in 2007 dollars. The inflation adjusted peak of $751 occurred in August 2007.
 
 
lvaverage
On a 12MMA basis, the number of weekly hours worked in Las Vegas (Clark County) was 33.2 hours in August, unchanged from July and down 0.3 hours from the 33.5 recorded in August 2014. As we’ve noted, stagnant and even dropping average hours worked have accompanied a dropping headline unemployment rate. At this point in the recovery, Reno is beating Las Vegas.
Implication: Companies continue to depend heavily on part-time workers. For this reason, the U-6 unemployment rate (includes discouraged and part-time workers) in Nevada remains the nation’s highest at 15.3%.
 
 
lvfuel
According to AAA, as of September 21, the average price per gallon for regular unleaded gasoline dropped by 12.3%, from $3.52 a year ago to $3.08. Between August 21 and September 21, the price of unleaded also declined, by $0.15 per gallon, or 4.5%. We expect gas prices to remain less expensive compared to last year through the end of 2015.

Year Over Year Las Vegas Home Sales, Prices + Taxable Retail Sales Are Up

The trends:

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The charts:

12MMA LV home sales

Total (new and resales) Clark County July home sales (closings), which numbered 4,054 (12MMA), rose by 6.8% from July 2014. Resales saw a 7.6% Y-O-Y jump in July to 3,523, while new homes sales increased 2.0% to 531. This was the first increase in Y-O-Y new home sales in 15 months – a good sign for new housing subdivisions.

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12MMA home prices Vegas

According to Home Builders Research, the 12MMA median home price (new and resale) for July was $198,196, a 7.6% jump over July 2014. The median new home price was $301,815, up 5.2% in the last 12 months. The median resale home price was $182,449 in July, reflecting an 8.7% increase during the last 12 months. The Reno average resale price for July was $266,723.
The combined rate of home appreciation for new and resale homes has slowed considerably during the last year. In July 2014, the Y-O-Y price increase from July 2013 was 19%. We believe that resale prices will continue to increase above the rate of inflation through 2015, but that this increase will be substantially less than it was last year on a moving average basis.

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Mortgage Indices

The prime rate remains at 3.25%. The 10-year treasury bond has remained essentially unchanged in the last month, from 2.17% to 2.16%. The 90-day LIBOR, however, has increased from 0.30 to 0.33. Compared to three months ago, the 90-day LIBOR is up significantly. Still, these rates remain historically low and benefit the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity, especially in the office market, plus only moderate job growth.

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12 MMA taxable sales Vegas

Taxable sales in Nevada and Clark County continue to rise, thanks to increased visitation and consumer spending. Taxable retail sales hit $3.12 billion in June, up 7% compared to June 2014, on a 12MMA basis. Retail sales figures are now higher than the pre-recession highs of 2007 and continue to be encouraging for future state and county 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.

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reg fuel prices LV

According to AAA, as of September 21, the average price per gallon for regular unleaded gasoline dropped by 12.3%, from $3.52 a year ago to $3.08. Between August 21 and September 21, the price of unleaded also declined, by $0.15 per gallon, or 4.5%. We expect gas prices to remain less expensive compared to last year through the end of 2015.

Las Vegas Recovery Leaps Forward Moderately

(Click the graphs/charts to enlarge.)

9-2 LV Employment

The RCG Employment Index’s 12-month moving average (“12MMA”) for Clark County increased by 0.1 points between June and July, and 1.5 points compared to July 2014. The index is steadily moving upward as the Valley’s “headline” jobless rate continues to drop.

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9-2 LV Job Growth

The 12MMA of Clark County’s headline unemployment rate remained level at 7.2% in July compared to June. It was down 1.4 percentage-points compared to July 2014. The region’s year-over-year (“Y-0-Y”) job growth rate also remained unchanged at 3.5% compared to June, and to July 2014. The most recent spate of growth peaked at 3.9% in February.

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9-2 Construction job

Construction jobs in Southern Nevada (Clark County) numbered 48,825 in July (12MMA), representing an increase of 5,525 jobs (12.8%) compared to July 2014. Construction activity continues to pick up. Jobs in this sector have now grown for 37 straight months on a Y-O-Y basis.

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9-2 LV Visitor

On a 12MMA basis, Clark County visitor volume rose in July compared to June, up to 3.47 million. It is up 2.6 percent year-over-year. The ongoing jump in visitor volume has continued relatively unabated since July 2009. We are confident that Southern Nevada’s visitation numbers will continue on an upward trajectory for the rest of the year.

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9-2 LV convention

Clark County convention attendance declined in July on a 12MMA basis, to 429,587. This represents a 2.4% decline compared to July 2014. Monthly convention attendance has been between 420,000 and 440,000 for the last 17 months. The general trend is less consistent today than it has been.

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9-2 Hotel rev.

The 12MMA hotel revenue per available room (RevPAR) in Clark County increased $0.28 in July compared to June reaching $101.88. July’s RevPAR was up 3.0% compared to July 2014 and continued its generally steady progress. Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a gaming resort’s total hotel room revenue by the room count and the number of days in the period being measured.

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9-2 LV Gaming rev

July’s 12MMA gaming revenue (net of baccarat) of $685.3 million increased 0.17% compared to June and was up 1.7% relative to July 2014. That makes three months of Y-O-Y growth of at least 1.5%. These are the first consecutive months of such growth since October 2012. Net of baccarat revenues are largely comprised of slot revenues, which generally reflect typical gaming spending of average Americans. However, slot revenues remain moribund for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35.

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30 yr

Mirroring the slowdown in home sales, the 12MMA 30-year fixed rate mortgage in the Western Region was down to 3.85% in August. This rate is expected to remain relatively low, but could rise if the Federal Reserve decides to increase rates in September.

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9-2 LV weekly earnings

Clark County 12MMA average weekly earnings (not inflation-adjusted) in July rose to $712, a 2.2% increase over July 2014. On an inflation-adjusted basis, earnings are starting to improve, up 1.6% in July compared to July 2014, to $632 in 2007 dollars, marking 13 months of improvement.

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9-2 LV Hours

On a 12MMA basis, the number of weekly hours worked in Las Vegas (Clark County) was 33.2 hours in July, unchanged from June, and 0.3 hours less than the 33.5 recorded in July 2014. As we’ve noted, stagnant and even dropping average hours worked have accompanied a dropping headline unemployment rate.

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) in Nevada remains the nation’s highest at 15.2%.

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9-2 LV Fuel

According to AAA, as of August 28, the average price per gallon for regular unleaded gasoline dropped by 13.4%, from $3.69 a year before to $3.19. Between July 28 and August 28, the price of unleaded also declined, by $0.08 per gallon, or 2.3%. We expect gas prices to stay relatively stable and less expensive compared to last year through the end of 2015.

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9-2 LV electric

Electric meter hookups’ 12MMA in July reached 775,595, up 1.8% over July 2014. The annual growth rate has been fairly steady for 18 months, bouncing between 1.3% and 1.9%. This corroborates the population growth projections for the Valley.

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9-2 LV Employment-permit

A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. The E-P ratio for Clark County was 4.2 in July, on 12MMA basis, compared to 5.2 in July 2014. According to the general consensus, an E-P Ratio above 2.0 that is relatively steady indicates that the local housing market is healthy.

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Updates | Jobless Rates, Visitor Volume, Convention Attendance, Hotel RevPAR, Home Sales & More

The Nevada U-6 unemployment rate fell to 15.2% in Q2, 2015, down 0.1 points since Q1. The U-3, or headline rate, declined by 0.3 points. While these figures are improving, they are still very weak compared to the rest of the nation. The Nevada U-6 rate is 1.2 points behind the second-worst state, California. In terms of the U-3 rate, Nevada continues to rank last. It was 50th of the states in Q2, trailing #49 Arizona by 0.3 points.

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visitors clark

On a 12MMA basis, Clark County visitor volume rose in June compared to May, up to 3.45 million. It is up 2.3% year-over-year. The general upward trend in visitor volumes returned during the last three months. We are confident that Southern Nevada’s visitation numbers will continue on an upward trajectory for the rest of the year.

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convention

Clark County convention attendance declined in June on a 12MMA basis, to 432,192. This represents a 1.0% decline compared to June 2014. Monthly convention attendance has been between 420,000 and 440,000 for 16 months. The general trend appears to be leveling off.

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revpar

The 12MMA hotel revenue per available room (RevPAR) in Clark County declined $0.02 in June compared to May to $101.60, essentially unchanged. RevPAR is up 3.2% compared to June 2014 and continues its steady progress back to its 2007 high. (Note: RevPAR is a performance metric in the gaming and lodging industry. It is computed by dividing a gaming resort’s total hotel room revenue by the room count and the number of days in the period being measured.)

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home sales

Total (new and resales) Clark County June home sales (closings), which numbered 4,017 (12MMA), rose by 5.5% from June 2014. Resales saw a 6.7% Y-O-Y jump in June to 3,493, while new homes sales dropped 1.7% to 524.

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median

According to Home Builders Research, the 12MMA median home price (new and resale) for June was $196,651, a 7.3% jump over June 2014. The Y-O-Y median new home price was $300,488, up 5.5% during the last 12 months. The Y-O-Y median resale home price was $180,949 in June, reflecting an 8.5% increase during the last 12 months. However, the combined rate of home appreciation for new and resale homes has slowed considerably during the last year. In June 2014, the Y-O-Y price increase from June 2013 was 21.6%. We believe that resale prices will continue to increase above the rate of inflation through 2015, but that on a moving average basis this increase will be substantially less than it was last year.

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case shiller

The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 137.8 in May, an increase of 8.2% compared to May 2014. This was about one-third of the 24.4% increase recorded between May 2013 and May 2014. These increases are similar to those reported by Homebuilders Research. The rate of growth in the home price index is slowing down, reflecting the same dynamic seen in local housing price data.

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HOI LV

The Housing Opportunity Index for the Las Vegas MSA rose for the first time during the last eight quarters in Q2, 2015 from 61.2 last quarter to 61.6 on a moving quarter basis. The U.S. Index also increased from 63.4 to 63.6 during the period. Housing prices appear to be stabilizing, and the improving employment situation may be helping raise the index, as well. 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 60.3.

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cc m index

The prime rate remains at 3.25%. The 10-year treasury bond has decreased slightly in the last month, from 2.20% to 2.17%. The 90-day LIBOR, however, has increased from 0.28 to 0.30. Compared to three months ago, though, both rates are up significantly. Still, these rates remain historically low and are good news for the commercial real estate industry in terms of the cost of borrowing. The challenge: excess capacity especially in the office market, plus only moderate job growth.

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tx retail

Taxable sales in Nevada and Clark County continue to rise, thanks to increased visitation and consumer spending. Retail sales hit $3.11 billion in May, up 7.2% compared to May 2014, on a 12MMA basis. Retail sales figures are now higher than the pre-recession highs of 2007 and continue to be encouraging for future state and county 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. This said, the Y-O-Y growth in taxable sales is been bouncing around in a relatively narrow range late-2011.

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AAA

According to AAA, as of August 14, the average price per gallon for regular unleaded gasoline dropped by 12.7%, from $3.73 a year before to $3.25. Between July 14 and August 14, the price of unleaded also declined, by $0.04 per gallon, or 1.2%. We expect gas prices to stay relatively stable and less expensive compared to last year through the end of 2015.

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em permit

A well-known housing market indicator is the employment-to-housing permit ratio or E-P Ratio. The E-P ratio for Clark County was 4.3 in June, on 12MMA basis, compared to 5.4 in June 2014. It is also rising. According to the general consensus, an E-P Ratio above 2.0 and that is going up indicates that the local housing market is healthy.

Home Building Graph Pack | New Home Permits, Percent Traffic Converted to Sales, Closings

There were 826 new home permits issued in the Las Vegas MSA in June by 25 homebuilders. The top four (4) builders obtained 52% of these permits. Lennar Homes obtained the largest share at 14.4% and KB Home was second at 13.6%.

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traffic as percent
Home Builders Research recorded 19,992 visits (traffic) to new home projects by 23 homebuilders in the Las Vegas MSA in July. 669 visits were converted to sales for an overall conversion rate of 3.5%. Signature had the highest conversation rate at 22.2% (2 out of 9 visits) and Lennar Homes had the highest number of conversions at 99, followed by Ryland Homes with 89 and KB Homes with 73 conversions. William Lyon Homes had the largest amount of traffic at 2,473, followed by KB Homes with 2,421 and Ryland Homes with 2,325 visits.

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new home permits

17 master-planned communities in Southern Nevada obtained 392 new home permits during June. Summerlin led the group with a 16.8% share closely followed by Inspirada with a 16.6% share. The top four (4) communities accounted for a 53% share.

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closings

According to Home Builders Research, on a submarket basis, the three most popular residential market areas in Southern Nevada – Henderson, the Northwest, and the Southwest – continued to lead in June. The Southwest had the largest new number of new home closings in June with 225, a 36% share. The Northwest came in second 152 closings and a 24% market share, and third was Henderson with 143 closings and a 23% share.
 

SoNev + Statewide Chart and Graph Pack

 
(Click the graphs/charts to enlarge.)
 
 
rgj emp index C Cty NEW

The RCG Jobs index 12-month moving average (“12MMA”) for Clark County increased by 0.1 points between May and June, and 1.5 points compared to June 2014. The index is steadily moving upward as the Valley’s “headline” jobless rate continues to drop.

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job growth Clark NEW

The 12MMA in Clark County’s headline unemployment rate dropped 0.1 points in June compared to May. It was down 1.5 percentage-points compared to June 2014. However, the region’s Y-0-Y job growth rate remained unchanged at 3.5% compared to June 2014, and was down 0.1 points compared to May. The most recent spate of growth peaked at 3.9% and has declined for four months. However, this is not necessarily a bad sign as the growth rate is expected to slow as the economy nears equilibrium.

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constr jobs Clark NEW
Construction jobs in Southern Nevada (Clark County) numbered 48,217 in June (12MMA), representing an increase of 5,292 jobs (12.3%) compared to June 2014. Construction activity continues to pick up. Jobs in this sector have now grown for 36 straight months.

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gaming rev NEW

June’s 12MMA gaming revenue (net of baccarat) of $684.2 million declined slightly compared to May ($684.5 million) but was up 1.5% relative to June 2014. That makes two months of Y-O-Y growth of at least 1.5%. This is the first consecutive months of such growth since October 2012. These net baccarat revenues are largely comprised of slot revenues, which generally reflect typical gaming spending of average Americans. However, slot revenues remain moribund for two reasons: constrained disposable income and changing spending patterns, especially among adults under 35.

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30 yr mtg Western Region NEW

Mirroring the slowdown in home sales, the 12MMA 30-year fixed rate mortgage in the Western Region was down to 3.87% in July. This rate will remain relatively low as the Federal Reserve continues to try to stimulate consumer and business spending and demand.

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comm mkt vacancy LVV NEW

Commercial vacancy rates in the Las Vegas Valley rebounded somewhat in Q2, 2015. The Industrial market rate continued to improve to 6.2%, also dropping on a 4-quarter moving average basis to 7.2% on the strength of the Warehouse/Distribution sector. This is a 0.9 percentage-point decrease compared to Q1, 2015. The Spec Office vacancy rate turned things back around and decreased 0.1 points to 21.6%, and fell on a 4-quarter moving average basis to 21.6% from 21.8% in Q1, 2015. The Anchored Retail rate remained 11.9%, as in Q1, 2015. The moving average of the rate, however, increased 0.1 points to 11.6%. Still, many office and retail properties that are well-designed and well-located are thriving. But there are others that were poorly conceived, poorly designed and poorly located that still anguish, and these are the projects that are keeping the overall vacancy numbers up.

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av weekly earnings Clark NEW

Clark County 12MMA average weekly earnings (not inflation-adjusted) in June rose above $700, reaching $709, a 2.3% increase over June 2014. On an inflation-adjusted basis, earnings are starting to improve, up 1.5% in June compared to June 2014, to $630 in 2007 dollars, marking 12 months of improvement.

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av weekly hrs worked CC NEW

On a 12MMA basis, the number of weekly hours worked in Las Vegas (Clark County) was 33.2 hours in June, down 0.1 hours from May and 0.3 hours less than the 33.5 recorded in June 2014. As we’ve noted, stagnant and even dropping average hours worked have accompanied a dropping headline unemployment rate.
Implication:  Companies continue to depend heavily on part-time workers. For this reason, the U-6 unemployment rate (includes discouraged and part-time workers) in Nevada remains the nation’s highest at 15.3%. 

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fuel price NEW

According to AAA, as of July 29, the average price per gallon for regular unleaded gasoline dropped by 13.4% from $3.78 a year ago to $3.27. However, between June 29 and July 29, the price of unleaded increased slightly, by $0.06 per gallon, or 1.9%. Still, we expect gas prices to stay relatively stable and less expensive compared to one year prior over the summer.

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