Northern NV Metrics

Here are the latest economic stats and graphs for Northern Nevada. Please feel free to share this information — and as always, don’t hesitate to contact us with questions. Also, if you’d like to sign up for our weekly newsletter, the Fact Pack, you can do so in the sign up box on the right side of this page.
 
r stat highlights

r positive

r emp index
r job growth
r yoy construction
r annualized
r gross gaming
r taxable retail
r home resales
r housing opp
r weekly earnings
r weekly hours
r fuel
r gold
r pot

Northern Nevada Economic Metrics

Here the latest economic stats and graphs for Northern Nevada. Please feel free to share this information — and as always, don’t hesitate to contact us with questions.
 
r stat highlights

r positive

r emp index
In December 2018, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased by 0.1 points to 99.5. The monthly Index held steady at 99.9 since last month, still under the all-time high of 100.0, which was last reached in October 2018. The trough of 89.6 occurred in January 2010.
r job growth
Reno-Sparks job growth on a 12MMA held steady from November to December, at 4.4%. The rate of growth is down .5 points from the 4.9% recorded in a year ago in December 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%). The region’s previous record 12MMA high was in January 2018 when jobs grew by 5.1%.
The 12MMA headline unemployment rate also held at 3.7% in December. When compared to the December 2017 headline rate of 4.2%, this year’s rate was 0.5 percentage-points lower. Reno has reached unemployment rates seen before the Great Recession.
r u3
The U-3 unemployment rate, or headline rate, for Nevada, after ticking down 0.3 points in Q3 2018, dropped another 0.1 points to 4.5 in Q4. The U-3 rate is now lower than the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, had a similar 0.1-point decline from 9.4% to 9.3%.
In terms of the U-3 rate, Nevada is still .6 points higher than the national average of 3.9%. While the U-6 rate saw some improvement, the national average of 7.6% is still 1.7 points lower than Nevada’s rate.
r yoy construction
There were 91,658 construction jobs in Nevada in December 2018. 17,692 (or 19.3%) of those jobs were in the Reno-Sparks MSA (12MMA). This is a 5.4% jump from the 16,792 jobs reported in December 2017, and the 7th consecutive month of significant job growth for the area. Reno’s very healthy economy has produced strong residential and commercial (especially industrial) real estate demand, but also has led to a housing (for-sale and for-rent) and industrial space shortage.
The latest stats show that 7.3% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 73.5% of the peak. At the time of the peak, the industry accounted for 11.1% of all jobs. The large number of jobs in the construction sector was a consequence of the pre-Recession real estate bubble. The sector bottomed out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
The annualized visitor count for Washoe County decreased 0.49% from November 2018 to 4.99 million in December. The YoY visitation rate sank by 2.9% in December, continuing a downward trend in both YoY and MoM numbers. This is in contrast to Clark County, where visitation numbers grew by .17% in December and began to tick upward in October 2018.
Washoe County has now seen four straight months of YOY decline, bringing the average annualized rate down to 2.0%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 4.4% in December 2018, a drop of 0.8% from November. This leaves total 12MMA revenue at $72.1 million. In comparison, Clark County saw a YOY growth rate of 2.4% this December. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3.4%, corresponding to a similar growth streak in visitor volume. Industry insiders also credit a reinvigorated Reno economy and casinos’ focus on locals for this stability.
Gaming revenues peaked nearly 12 years ago in June 2006 at $89.4 million, and the county is still at 80% of that peak. On an annual growth rate basis, the peak of 5.5% happened 12 years ago in May and June of 2006.
r taxable retail
Washoe County’s economy continues to benefit from rising taxable retail sales. In November 2018, the 12MMA growth rate was 5.1% YOY, a decrease of 1.1 points from November 2017. The YOY growth rate has hovered about 5% after dropping in August. Taxable retail sales reached $721.5 million in November on a 12MMA basis, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). Washoe’s taxable sales growth rate is 0.1 points higher than the statewide average.
Job growth, success in business attraction and retention, resulting in construction activity plus proximity to the Bay Area and the Pacific Northwest, are driving the region’s economy, though increasing visitation has also contributed.
r single family
The Q4 2018 median sales price of $375,000 for single-family home resales in the Reno-Sparks area represents a 7.3% jump YOY. Compared to the previous quarter, the price dropped by 1.3%. The Q4 median price is now approximately $52,501 (16.3%) greater than the $319,393 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $60,607, a difference of -2.7 points. This represents the first drop in the Reno-Sparks median price since 3Q 2016. Housing affordability is a looming problem that is being monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
r home resales
In December 2018 MLS home resales in Washoe County fell by 1.62% from the previous month to 496 on a 12MMA. When compared to December 2017, resales fell by 12.1%, which continues the trend of YoY sales decline that began in June 2018.
The median sales price rose to $376,168 (12MMA) in November, an 11.7% jump from the year prior. By comparison, the November Las Vegas median resale price rose by 14.0%, but is much lower at $257,575. The looming housing affordability issue in both regions also applies to the new home market.
r commercial
According to Colliers International, Reno-Sparks Office vacancy in Q4 2018 has grown after falling in Q2 and Q3. Office vacancy rose by 0.8 points from the previous quarter to 11.8%. The Reno-Sparks Spec Office market has seen slow and steady improvement since Q3 2010, when the Spec Office market had reached peak vacancy of 21.6%.
The Industrial vacancy rate also rose in Q4, adding 0.8 percentage-points and reaching 5.7%. This rise comes after falling for 9 straight quarters, though the industrial vacancy rate is still well below the 10% stabilized rate.
r weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew about $10 (or .23%) in December 2018 over the previous month, to $853. This marked the 18th consecutive month of growth. On a YOY basis, this wage is up 6.9% from $798 in December 2017.
The inflation-adjusted (real) 12MMA wage for December 2018 of $713.67 is up just over $7 from the previous month’s wage and is $29 (4.3%) higher than the wage recorded 12 months ago. Reno-Sparks workers are starting to see real wage growth pick up after more than a year of relative stagnation.
In December, the region’s average weekly earnings were 5.1% higher than the Las Vegas average of $676. Reno-Sparks’ real wage has fallen from the $730 peak in May 2016, just over 2 years ago.
r weekly hours
In December 2018, the Reno-Sparks MSA’s 12MMA average weekly hours worked grew for the second straight month, hitting 35.7 hours. Weekly hours worked have finally started to climb after remaining stagnant for much of 2018. Weekly hours in Las Vegas also seem to be trending slowly upward. On a YOY basis, 12MMA weekly hours for Reno-Sparks are the same as they were in December 2017. The most recent weekly hours worked peak happened in July 2009 at 36.8 hours, while the trough of 32.5 hours happened in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of Feb 4, 2019 was $2.81, down $0.17 (-5.7%) from $3.25 the previous month. When compared to the previous year, the price of regular unleaded is down $0.14 (-4.8%). Gas prices have been rising steadily and could impact resident and business spending in other 1areas of the local economy.
According to AAA, “For most states, gas prices are starting off the first week in February cheaper than the last week in January. On the week, only eight states saw gas prices increase which is a big shift from the week prior that saw increases for 25 states. With the majority of state gas price averages decreasing, the national gas price average held flat at $2.26 even though the Energy Information Administration’s (EIA) latest demand rate reflected summer-like numbers. 
For the week ending Jan 25, the EIA reported U.S. gasoline demand at 9.6 million b/d. The last time the rate was this high was during the 2018 Labor Day weekend. As the EIA rate is an estimate, it’s considered preliminary and the agency may revise it later this year when it releases final figures for the month. If the estimate is not revised, one reason for the jump could be the extreme cold weather seen last week. 
“Three-fourths of the country faced below freezing temperatures last week which may have prompted many motorists, especially in the mid-west, to fill-up early and often ahead of the storm, in turn driving demand. This is similar to what we see prior to hurricanes,” said Jeanette Casselano, AAA spokesperson. “Now that the storm has passed, demand is likely to fall more in-line with typical February estimates.”
r gold
Per the World Gold Council, in January the 12MMA month-end spot price for an ounce of pure gold fell by about $2 (-0.14%) from December to just over $1,262. On a YOY basis, the 12MMA price of gold is down 1.1%. The peak of $1677.77 occurred in December 2012. Despite the dips in recent months, the YOY growth rate has generally trended upward for the last 2 years.
r pot
Nevada excise tax revenues generated from marijuana sales through the first 17 months of its collection are over $101 million, with the most recent recorded month, November 2018, seeing 1.23% growth in revenue from the previous month, and 51.53% growth over November 2017. This November brought in over $8.3 million in combined retail and wholesale taxes. The most readily available report by the Nevada Department of Taxation contains only retail and wholesale excise taxes, and does not include sales and use taxes paid at points of sale in the dispensaries, or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged only to recreational users purchasing marijuana at a dispensary.
According to the Department’s original forecast, tax revenue from the sale of marijuana was expected to reach $120 million in the first 2 years. Collections indicate that the performance is on track to exceed the Department’s forecast.

Southern Nevada Economic Metrics

Below are all the latest economic stats and graphs for Southern Nevada. Please feel free to share the graphs and/or reach out to us with questions.
 
stat highlights

positive

emp index
In December 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) remained at 98.8, holding at the strongest 12MMA the Index has measured for the second month in a row. On a YOY basis the Index is up 0.4 points from December 2017.
job growth
The 12MMA of Clark County’s headline unemployment rate held steady in December at 4.8%, after slowly trending downwards for months. That’s also 0.5 points below December 2017’s 5.3% 12MMA. This metric reached its lowest level (4%) more than 11 years ago in October 2006.
The 12MMA rate of job growth in the Las Vegas MSA increased 0.1 points to 3.2% in December. There was also an increase in 12MMA job growth YoY, a 0.3 point rise from December 2017’s 2.9%. The 12MMA job growth rate has now risen for the sixth straight month, a good economic sign.
u3 unemp
The U-3 unemployment rate, or headline rate, for Nevada, continued its downward trend, ticking down another 0.1 points in Q4 to 4.5%. The U-3 rate is now lower than the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, saw a slight increase from 9.4% to 9.5%. Quick note, the U-6 rate has historically been about twice the U-3 rate.
In terms of the U-3 rate, Nevada is still 0.6 points higher than the national average of 3.9%. While the U-6 rate saw some improvement, the national average of 7.6% is still 1.7 points lower than Nevada’s rate.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a still relatively healthy for-sale and for-rent housing market, improving (particularly industrial) commercial markets, large scale “special use” projects like the Raiders’ stadium and Las Vegas Baseball Park, casino-resort renovations and public infrastructure investments especially transportation projects. This said, 2019 is expected to be a bellwether year.
In December 2018, the number of Southern Nevada construction workers rose by 6,550 (12MMA) from December 2017, an 11.1% jump. On a 12MMA, basis, November’s statewide gains put total construction jobs at 91,658. That marks 78 straight months (more than 6 years) of job growth. President Trump’s uneven approach to trade, including steel tariffs, is affecting the Las Vegas construction industry.
Construction jobs this November represented 6.6% of the region’s job-base. During the real estate bubble of 2000-2007, construction jobs accounted for as much as 11.4% of all MSA jobs, with construction jobs peaking at 108,833 in November 2006.
visitor volume
The Las Vegas MSA’s 12-month visitor count (annualized) in December 2018 was just over 42.1 million. The number of visitors to Clark County grew 0.17% in December, lower than November’s 0.43%. On a YOY basis, this was the 17th consecutive month of annualized visitation decline, though that decline is now under a point: down just 0.2% since December 2017. We believe that the primary reasons for the slowdown are: limited room capacity, the strong dollar making vacationing in the US pricier for foreign visitors, the rising cost of visiting Las Vegas and a move back to the longer trend rate of growth.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. The total visitor volume in 2018 was 42.1 million.
convention
In December, Clark County’s annualized convention attendance saw a 1.02% decrease from the previous month, dropping to 6.50 million. That’s also 2.5% less than the 12MMT of December 2017 of 6.66 million, which was the annualized peak, though the numbers are trending higher.
Convention attendance saw significant gains in 2016, with 10 months above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen sharply to 3.9%. Over the course of 2018, attendance grew by an average of 2.0% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. 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, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
hotel rev
In December 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $113.54, a gain of $1.01 (0.9%) from the previous month, the third straight month of growth for the metric. This is a full $.76 above December 2017’s RevPAR, ending 9 straight months of YOY (current month vs. same month in previous year) decline. The RevPAR 12MMA peak of $119.43 occurred in December 2007. This is a metric to definitely watch.
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 dollars grew in December 2018 to $753,602,667, a gain of 0.65% from November. The streak of positive YOY growth continues, reaching 47 consecutive months with an increase of 2.4% from December 2017. Net baccarat revenues are over 90% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials have caused a decrease in slot revenues, they are now recovering as US household disposable income has increased.
home sales
Of the 4,953 total Las Vegas MSA home sales recorded by Home Builders Research in December, 4,066 were resales and 887 were new home sales. According to Home Builders Research, total (new and resale) Clark County home closings, on a 12MMA basis, dropped 1.02% in December, compared to the previous month. On a YOY basis, total home sales were 0.4% higher than in December 2017.
The 12MMA for new home sales saw a YOY growth rate of 15.3% in December, while existing home sales saw a decrease for the third straight month, dropping 2.3%.
home price
Per Home Builders Research, December’s 12MMA median home price (new and resale) was $278,986, a 0.90% gain over the previous month. Compared to December 2017, the price is up 14.1%, dropping after three months at the highest point for the metric since September 2014. YOY growth had been rising steadily for 18 months, but is well below the YOY peak of 35.8% recorded in February 2005. The current overall median home price remains well below the February 2007 peak of $305,333. November’s figure is over 91% of the peak price.
The median new home price was up 9.4% from December 2017, setting a new peak for the 20th consecutive month at $375,917. The previous cycle peak of $327,066 occurred in February 2007.
The median resale home price was $257,575 in December, a 14.0% jump from a year earlier. The peak of $286,833 occurred more than 11 years ago in April 2007. The resale average has now recovered more than 89% of its pre-recession peak price.
The combined rate of home appreciation for new and resale homes continued to hold steady in December. The YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Over the course of 2018, the YOY growth rate averaged 13.6%.
These figures are not inflation-adjusted, or “real.” Therefore, the real value of homes today compared to the pre-recession peak is overestimated.
nominal home sales
This new chart tracks monthly nominal Total Sales Volume (“TSV”) for housing. The data series starts in August 2001 and goes through latest available month. TSV is calculated by multiplying monthly closings by the respective median new, resale and weighted/combined home prices. We’d like to note that the three median home prices are based on monthly moving averages (“12MMA”). This is done to account for seasonality in prices. The TSVs’ 12MMAs in December 2018 were: $334.1 M for new homes, $1,048 M for resales and $1,382 M for the combined total. Clearly, the upward trajectory is quite pronounced especially for resales because of their greater availability, leading to more competitive prices. New home TSV is being affected by rising construction and land costs.
On a percent change basis, December TSVs were up 0.8% for new homes, but dropped by 0.6% for resales and 0.2% for combined. Compared to December 2017, the percent changes in TSVs were 25.9% for new, 11.2% for resales and 14.4% for combined.
As point of reference, the Peak TSVs occurred in July 2006 ($1,043B-new), January 2006 ($1,335B-resales) and March 2006 ($2,326B-combined). Monthly TSVs are now 32.0% of the peaks for new home sales, 78.5% for resales and 59.4% for total combined sales
30 yr fixed
The 12MMA 30-year fixed-rate mortgage for the US continues to climb. An increase of 0.04 points in January over the previous month puts the rate at 4.58% (12MMA). This was the 12th consecutive increase in the rate. The 12-year peak of 6.4% happened in October 2006. While the 30-year fixed rate should remain relatively low, it will likely continue to go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA rose by 1.7 points to 181.5 in November 2018, growing 12.5% compared to November 2017. The Las Vegas index has risen for 75 straight months, while the YOY growth rate has increased steadily since March 2017. November’s U.S. 12MMA index was up another 0.8 points to 210.8 a jump of 6.0% compared to the previous year.
The Las Vegas index peaked at 233.2 in December 2006, with the latest index reaching 77.8% of that 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.
taxable retail
November’s taxable retail sales continue to rise in Clark County, with 0.95% growth to $3.66 billion from the month prior. On a YOY basis, growth in the 12MMA increased to 6.4% over November 2017. We believe much of the dollar growth in taxable sales is due to rising credit card usage by local residents, healthy visitor spending numbers and strong construction activity.
The consistent growth of taxable sales has given local and state governments more money to work with. The strength of the overall national economy, and especially in the Western U.S. is key to this improvement. The strengthening national and regionally economies have been the drivers of visitors and convention attendance to Las Vegas during the last few years, which is ultimately reflected in tourism spending. This said, a growing number of analysts are saying that there are signs of an economic slowdown. 2019 will be a telling year.
weekly earnings
The Las Vegas MSA’s 12MMA nominal average weekly earnings (not inflation-adjusted) was up by about $4.20, reaching $807.78 in December 2018. This growth trend began more than 3½ years ago in September 2014. On a YOY basis, the nominal 12MMA was up $28 (3.6%) from December 2017.
When viewed on an inflation-adjusted basis (“real”), however, earnings rose only about $2.50 in December from the month prior, to $675.64 (in 2007 dollars). YOY real earnings rose by 1.1% ($7) compared to November 2017. Moribund real wage growth has received a lot of attention for some time by economists. It is partially a function of a skills gap, the growth of the “gig economy” and ongoing automation trends.
Las Vegas’ average weekly real wage is $75 (9.9%) below the most recent inflation-adjusted peak of $751 that occurred close to 11 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains closer to the trough than the peak.
weekly hours
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA remained at 33.9 in December 2018, the same level recorded for the last two months. Weekly hours had been plodding upward since June 2016, but have flattened in recent months just below the state average. On a YOY basis, average weekly hours are the same as they were in December 2017.
In Q4, 2018, the Nevada U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.1-point drop to 9.3%. While this should suggest that business reliance on part-time workers continues to decrease, the figure is still among the highest in the nation and suggests that a substantial number of new jobs being created are for part-time work, or that positions have been shifted into independent contracting roles. These factors may explain the recent plateau for weekly hours worked even as we reach “full employment.”
fuel
The price of gas in Las Vegas rose slightly over the last month. As of February 4th, 2019, the price of regular unleaded gasoline in the Las Vegas MSA was $2.90, which is $0.03 (1.2%) higher than a month ago. Compared to a year ago, the price of unleaded is up $0.18 or 6.5%.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. High gas prices could have a deleterious effect on tourist spending in Las Vegas.
According to AAA, “For most states, gas prices are starting off the first week in February cheaper than the last week in January. On the week, only eight states saw gas prices increase which is a big shift from the week prior that saw increases for 25 states. With the majority of state gas price averages decreasing, the national gas price average held flat at $2.26 even though the Energy Information Administration’s (EIA) latest demand rate reflected summer-like numbers. 
For the week ending Jan 25, the EIA reported U.S. gasoline demand at 9.6 million b/d. The last time the rate was this high was during the 2018 Labor Day weekend. As the EIA rate is an estimate, it’s considered preliminary and the agency may revise it later this year when it releases final figures for the month. If the estimate is not revised, one reason for the jump could be the extreme cold weather seen last week. 
“Three-fourths of the country faced below freezing temperatures last week which may have prompted many motorists, especially in the mid-west, to fill-up early and often ahead of the storm, in turn driving demand. This is similar to what we see prior to hurricanes,” said Jeanette Casselano, AAA spokesperson. “Now that the storm has passed, demand is likely to fall more in-line with typical February estimates.”

Northern Nevada Economic Metrics

Below are the latest economic stats and graphs for Northern Nevada. Please feel free to share this information — and as always, don’t hesitate to contact us with questions.  
r stat 1-9

r positive 1-9

r emp index 1-9
In November 2018, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased by 0.1 points to 99.5. The monthly Index went up 0.2 points since October, and has hit an all-time high at 100.1, breaking the 100-point barrier for the first time. The trough of 89.6 occurred in January 2010.
r job growth 1-9
Reno-Sparks job growth on a 12MMA grew 0.2 points from October to November, from 4.2% to 4.4%. The rate of growth is down a full 1.5 points from the 4.8% recorded in a year ago in August 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%). The region’s previous record 12MMA high was in January 2018 when jobs grew by 5.1%.
The 12MMA headline unemployment rate fell 0.1 points to 3.7% in November. When compared to the November 2017 headline rate of 4.3%, this year’s rate was 0.6 percentage-points lower. Reno has reached unemployment rates seen before the Great Recession.
r u6 1-9
The U-3 unemployment rate, or headline rate, for Nevada, after ticking down 0.2 points in Q2 2018, dropped another 0.3 points to 4.6 in Q3. The U-3 rate is now dead even with the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, had a similar 0.3-point decline from 9.7% to 9.4%.
In terms of the U-3 rate, Nevada is tied for the 6th highest U-3 rate in the nation with Arizona and New Mexico. While the U-6 rate saw some improvement, Nevada still holds the 4th highest rate in the country, above the #5 spot held last quarter.
r yoy construction 1-9
There were 90,758 construction jobs in Nevada in November 2018. 17,550 (or 19.3%) of those jobs were in the Reno-Sparks MSA (12MMA). This is a 5.2% jump from the 16,683 jobs reported in November 2017, and the 6th consecutive month of significant job growth for the area. Reno’s very healthy economy has produced strong residential and commercial (especially industrial) real estate demand, but also has led to a housing (for-sale and for-rent) and industrial space shortage.
The latest stats show that 7.4% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 73% of the peak. At the time of the peak, the industry accounted for 11.1% of all jobs. The large number of jobs in the construction sector was a consequence of the pre-Recession real estate bubble. The sector bottomed out in February 2012 when there were only 8,792 construction jobs.
r visitor 1-9
The annualized visitor count for Washoe County decreased 0.29% from October 2018 to 5.01 million in November. The YoY visitation rate sank by 2.2% in November, continuing a downward trend in both YoY and MoM numbers. This is in contrast to Clark County, where visitation numbers began to tick upward in September 2018.
Washoe County has now seen three straight months of YOY decline, bringing the average annualized rate down to 2.6%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%.
r gross gaming 1-9
Washoe County’s 12MMA YOY gross gaming revenue grew by 5.2% in November 2018, and is back up 0.7% from October after two months of decline. This leaves total revenue at $72.2 million. In comparison, Clark County saw a YOY growth rate of 2.3% this November. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3.4%, corresponding to a similar growth streak in visitor volume.
Gaming revenues peaked nearly 12 years ago in June 2006 at $89.4 million, and the county is still at 80% of that peak. On an annual growth rate basis, the peak of 5.5% happened 12 years ago in May and June of 2006.
r taxable retail 1-9
Washoe County’s economy continues to benefit from rising taxable retail sales. In October 2018, the 12MMA growth rate was 5.4% YOY, a decrease of 0.6 points from October 2017. The YOY growth rate has remained essentially flat over the last 2 months, after dropping in August. Taxable retail sales reached $719.5 million in October on a 12MMA basis, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). Washoe’s taxable sales growth rate is 0.6 points higher than the statewide average.
Job growth, success in business attraction and retention, resulting in construction activity plus proximity to the Bay Area and the Pacific Northwest, are driving the region’s economy, though increasing visitation has also contributed.
r single family 1-9
The Q3 2018 median sales price of $380,000 for single-family home resales in the Reno-Sparks area represents a 8.9% jump YOY. Compared to the previous quarter, the price grew by 1.3%. The Q3 median price is now approximately $60,607 (18.9%) greater than the $319,393 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $58,684. The Reno-Sparks median price is increasing rapidly. Housing affordability is a looming problem that is being monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
r home resale 1-9
In November 2018 MLS home resales in Washoe County fell by 1.0% from the previous month to 505 on a 12MMA. When compared to November 2017, resales fell by 11.2%, which continues the trend of YoY sales decline that began in June 2018.
The median sales price rose to $374,502 (12MMA) in November, a 12.4% jump from the year prior. By comparison, the November Las Vegas median resale price rose by 14.6% but is much lower at $255,483. The looming housing affordability issue in both regions also applies to the new home market.
r housing opp 1-9
In Q3, 2018 the Housing Opportunity Index (“HOI”) for the Reno-Sparks MSA dropped 1.4 points from 39.3 in Q2 to 37.9 on a four-quarter moving average (“4QMA”) basis. The U.S. index decreased by 0.5 points for the second month in a row, from 59.7 to 59.2, during the same period. The Reno-Sparks 4QMA HOI is now 20.8 points (35%) lower than the national number. On a YOY basis, the Reno-Sparks index fell 11.1 points from 49.0 in Q3 2017.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012 and has been trending downward ever since. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 64.5. The region’s latest index is now 26.6 points below that 10-year average. There will be issues regarding housing affordability will spillover effects on economic growth and business attraction in Reno-Sparks if the index continues to deteriorate.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the Reno-Sparks MSA, assuming standard mortgage underwriting criteria.
r commercial 1-9
According to Colliers International, Reno-Sparks Office vacancy continues a downward trajectory in Q3 2018. Office vacancy fell 0.2 points from the previous quarter to 11.8% on a 4QMA basis, its lowest value in more than 13 years, since Q3 2004. The Reno-Sparks Spec Office market has seen slow and steady improvement since Q3 2010, when the Spec Office market had reached peak vacancy of 21.6%.
The Industrial vacancy rate also fell in Q3, dropping 0.4 percentage-points and reaching 5.2%. After 5 consecutive quarters of increasing vacancy, the Industrial markets vacancy rate has now fallen 9 straight quarters and is now well below the 10% stabilized rate.
r weekly earnings 1-9
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew about $5 (or 0.64%) in November 2018 over the previous month, to $841. This marked the 17th consecutive month of growth. On a YOY basis, this wage is up 5.8% from $795 in November 2017.
The inflation-adjusted (real) 12MMA wage for November 2018 of $704.79 is up just over $3 from the previous month’s wage, and is $22 (3.2%) higher than the wage recorded 12 months ago. Reno-Sparks workers are starting to see real wage growth pick up after more than a year of relative stagnation.
In November, the region’s average weekly earnings were 4.8% higher than the Las Vegas average of $673. Reno-Sparks’ real wage has fallen from the $730 peak in May 2016, just over 2 years ago.
r weekly hours 1-9
In November 2018, the Reno-Sparks MSA’s 12MMA average weekly hours worked remained at 35.4 for the third straight month. Weekly hours worked have leveled off after a brief drop beginning in October 2017. Conversely, weekly hours in Las Vegas seem to be leveling after trending slowly upward. On a YOY basis, 12MMA weekly hours for Reno-Sparks are down 0.4 points from November 2017. The most recent weekly hours worked peak happened in July 2009 at 36.8 hours, while the trough of 32.5 hours happened in September 2014.
r fuel 1-9
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of Jan 2, 2019 was $2.98, down $0.27 (8.2%) from $3.25 the previous month. When compared to the previous year, the price of regular unleaded is up $0.15 (5.2%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “Heading into 2019, gasoline demand is expected to dwindle during the month of January, an expected change following the busy holiday travel season. At the same time, OPEC will begin production cuts on January 1, with hopes that the shift in global supply will push oil prices higher. The effectiveness of the cuts will likely not be known until later in the first quarter. 
“All eyes are on OPEC to kick off the year,” said Jeanette Casselano, AAA spokesperson. “Many are waiting to see if they stick to their promise to cut crude production by 1.2-million b/d and if the proposed cuts will be enough to restore balance to the market.” 
Over the past few years, OPEC and partnering countries have demonstrated a strong resolve to comply with proposed cuts in production. It is likely that the cartel will reconvene in April, and if there is a need to further balance global supply and demand, OPEC will likely tweak current production numbers at that meeting.”
r gold 1-9
Per the World Gold Council, in November the 12MMA month-end spot price for an ounce of pure gold fell by about $5 (0.4%) from October to just over $1,265. On a YOY basis, the 12MMA price of gold is still up 0.9%. The peak of $1677.77 occurred in December 2012. Despite the dips in recent months, the YOY growth rate has generally trended upward for 2 years, and is up for the last 12 months straight.
r pot 1-9
Nevada excise tax revenues generated from marijuana sales through the first 16 months of its collection are over $101 million, with the most recent recorded month, October 2018, seeing a whopping 10.1% increase in revenue from the previous month. October brought in about $8.2 million in combined retail and wholesale taxes. The most readily available report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at points of sale in the dispensaries, or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged only to recreational users purchasing marijuana at a dispensary.
According to the Department’s original forecast, tax revenue from the sale of marijuana was expected to reach $120 million in the first 2 years. Collections indicate that the performance is on track to exceed the Department’s forecast.

Southern Nevada Metrics

Here are the latest economic stats and graphs for Southern Nevada. Please feel free to share this information — and as always, don’t hesitate to reach out with comments or questions.  
stat 1-9

positive 1-9

emp index 1-9
In November 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) remained at 98.8, holding at the strongest 12MMA the Index has measured. On a YOY basis the Index is up 0.4 points from November 2017, though on a MOM basis there was a very slight, 0.2 point, drop from October.
job growth 1-9
The 12MMA of Clark County’s headline unemployment rate dropped slightly in November to 4.8% after a brief pause in October. That’s 0.5 points below November 2018’s 5.3% 12MMA. This metric reached its lowest level (4%) more than 11 years ago in October 2006.
The 12MMA rate of job growth in the Las Vegas MSA increased 0.1 points to 3.1% in November. There was also an increase in YOY job growth from the previous year, a full 1.6 points above November 2017’s 2.2%. The 12MMA job growth rate has now risen for the fifth straight month, a good economic sign.
u6 1-9
The U-3 unemployment rate, or headline rate, for Nevada, continued its downward trend, ticking down another 0.3 points in Q3. The U-3 rate is now exactly the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, had the same 0.3-point decline from 9.7% to 9.4%. Quick note, the U-6 rate has historically been about twice the U-3 rate.
In terms of the U-3 rate, Nevada is tied for the 6th highest U-3 rate in the nation with Arizona and New Mexico. While the U-6 rate saw some improvement, Nevada still holds the 4th highest rate in the country, compared to the #5 spot held by the state last quarter.
yoy construction 1-9
Construction in the Las Vegas MSA continues to be boosted by a still relatively healthy for-sale and for-rent housing market, improving (particularly industrial) commercial markets, large scale “special use” projects like the Raiders’ stadium and Las Vegas Baseball Park, casino-resort renovations and public infrastructure investments especially transportation projects. This said, 2019 is expected to be a bellwether year.
In November 2018, the number of Southern Nevada construction workers rose by 6,600 (12MMA) from November 2017, an 11.2% jump. On a 12MMA, basis, November’s statewide gains put total construction jobs at 90,758. That marks 77 straight months (more than 6 years) of job growth. President Trump’s uneven approach to trade, including steel tariffs, is affecting the Las Vegas construction industry.
Construction jobs this November represented 6.5% of the region’s job-base. During the real estate bubble of 2000-2007, construction jobs accounted for as much as 11.4% of all MSA jobs, with construction jobs peaking at 108,833 in November 2006.
visitor 1-9
The Las Vegas MSA’s 12-month visitor count (annualized) in November 2018 was just over 42 million. The number of visitors to Clark County showed stronger growth in November at 0.43% than October’s 0.18%. On a YOY basis, this was the 16th consecutive month of annualized visitation decline, though that decline is now under a point: down 0.6% since November 2017. We believe that the primary reasons for the slowdown are: limited room capacity, the strong dollar making vacationing in the US pricier for foreign visitors, the rising cost of visiting Las Vegas and a move back to the longer trend rate of growth.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. Year-to-date visitor volume in November 2018 is 38.9 million. That is slightly down versus the same points in 2016 (39.6 million) and 2017 (39 million). There’s a possibility that strong December numbers will lift 2018 above the previous two years.
convention 1-9
In November, Clark County’s annualized convention attendance saw a 1.3% increase from the previous month, to 6.57 million. That’s over a full point gain from November 2017. Though we still haven’t hit the annualized peak of 6.65 million convention attendees from December 2017, the numbers are climbing higher.
Convention attendance saw significant gains in 2016, with 10 months above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen sharply to 3.9%. During the first 11 months of 2018, attendance grew by an average of 2.4% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. 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, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
hotel rev 1-9
In November 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $112.53, a gain of $1.12 (1%) from the previous month. Though this is still $.90 below November 2017’s RevPAR, it’s the second straight month of growth for the metric. Conversely, it is also the 9th straight YOY (current month vs. same month in previous year) decline in RevPAR after more than 7 consecutive years of growth. The RevPAR 12MMA peak of $119.43 occurred in December 2007. This is a metric to definitely watch.
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 1-9
On a 12MMA basis, gaming revenue net of baccarat dollars was up slightly in November to $748,752,333, a gain of 0.17% from October. The streak of positive YOY growth continues, reaching 46 consecutive months with an increase of 2.3% from November 2017. Net baccarat revenues are at almost 90% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by typical gamblers, especially U.S. gamblers. While changing spending patterns among millennials have caused a decrease in slot revenues, they are now recovering as US household disposable income has increased.
home sales 1-9
Of the 4,370 total Las Vegas MSA home sales recorded by Home Builders Research in November, 3,467 were resales and 903 were new home sales. According to Home Builders Research, total (new and resale) Clark County home closings, on a 12MMA basis, dropped 0.49% in November, compared to the previous month. On a YOY basis, total home sales were 1.4% higher than in November 2017.
The 12MMA for new home sales saw a YOY growth rate of 16.5% in November, while existing home sales saw a decrease for the second straight month, dropping 1.3%.
home price 1-9
Per Home Builders Research, November’s 12MMA median home price (new and resale) was $276,508, a .95% gain over the previous month. Compared to November 2017, the price is up 14.6%, continuing a three-month streak of the highest weighted home price YOY growth since September 2014. YOY growth has now been rising steadily for 18 months but is well below the YOY peak of 35.8% recorded in February 2005. The current overall median home price remains well below the February 2007 peak of $305,333. November’s figure is about 90% of the peak price.
The median new home price was up 9.7% from November 2017, setting a new peak for the 20th consecutive month at $373,816. The previous cycle peak of $327,066 occurred in February 2007.
The median resale home price was $255,483 in November, a 14.6% jump from a year earlier. The peak of $286,833 occurred more than 11 years ago in April 2007. The resale average has now recovered more than 89% of its pre-recession peak price.
The combined rate of home appreciation for new and resale homes continued to hold steady in November. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Through the first 11 months of 2018, the YOY growth rate has averaged 13.5%.
These figures are not inflation-adjusted, or “real.” Therefore, the real value of homes today compared to the pre-recession peak is overestimated.
nominal 1-9
This new chart tracks monthly nominal Total Sales Volume (“TSV”) for housing. The data series starts in August 2001 and goes through latest available month. TSV is calculated by multiplying monthly closings by the respective median new, resale and weighted/combined home prices. We’d like to note that the three median home prices are based on monthly moving averages (“12MMA”). This is done to account for seasonality in prices. The TSVs’ 12MMAs in November 2018 were: $331.4 M for new homes, $1,054 M for resales and $1,386 M for the combined total. Clearly, the upward trajectory is quite pronounced especially for resales because of their greater availability, leading to more competitive prices. New home TSV is being affected by rising construction and land costs.
On a percent change basis, November TSVs were up 0.9% for new, 0.2% for resales and 0.4% for combined. Compared to November 2017, the percent changes in TSVs were 27.7% for new, 12.9% for resales and 16.1% for combined.
As point of reference, the Peak TSVs occurred in July 2006 ($1,043B-new), January 2006 ($1,335B-resales) and March 2006 ($2,326B-combined). Monthly TSVs are now 31.8% of the peaks for new home sales, 79% for resales and 59.6% for total combined sales.
30 yr mtg 1-9
The 12MMA 30-year fixed-rate mortgage for the US continues to climb. An increase of 0.06 points in December over the previous month puts the rate at 4.5% (12MMA). This was the 11th consecutive increase in the rate. The 12-year peak of 6.4% happened in October 2006. While the 30-year fixed rate should remain relatively low, it will likely continue to go up because of Federal Reserve actions.
case shiller 1-9
The 12MMA Case-Shiller home price index for the Las Vegas MSA rose by 1.8 points to 179.8 in October 2018, growing 12.4% compared to October 2017. The Las Vegas index has risen for 74 straight months, while the YOY growth rate has increased steadily since March 2017. October’s U.S. 12MMA index was up another point to 210.0 a jump of 6.1% compared to the previous year.
The Las Vegas index peaked at 233.2 in December 2006, with the latest index reaching 77.1% of that 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 1-9
On a 4-quarter moving average basis, the Housing Opportunity Index (“HOI”) for the Las Vegas MSA fell for the 7th straight quarter, this time by 2.7 points to 53.7 in Q3 of 2018. Over 6 quarters the Las Vegas HOI has dropped by a whopping 14 points. The Las Vegas HOI peaked at 86.2 in Q1 2012 and bottomed out at 15.4 in Q1 2007 at the height of the housing boom; the average is 72.2 for the last 10 years. Affordable housing is currently on the decline in the Las Vegas MSA.
The U.S. index experienced a decline as well, falling from 59.2 in Q2 2018 to 58.7 in Q3. Housing prices nationally are rising slightly but trending stable.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the selected jurisdiction, assuming standard mortgage underwriting criteria.
apartment 1-9
The Las Vegas Valley’s 12MMA apartment vacancy rate rose slightly, to 7.7% in Q3 2018. The general trend since 2011 has been down, though apartment vacancy has fluctuated between 7.5% and 7.7% since Q4 2016. The recovery in apartment vacancy has been slow but steady, peaking at 10.8% in Q2 2010, just three years from a low of 5.1% in Q1 2007.
taxable retail 1-9
October’s taxable retail sales continue to rise in Clark County, with 0.79% growth to $3.63 billion from the month prior. On a YOY basis, growth in the 12MMA increased to 5.7% over October 2017. We believe much of the dollar growth in taxable sales is due to rising credit card usage by local residents, healthy visitor spending numbers and strong construction activity.
The consistent growth of taxable sales has given local and state governments more money to work with. The strength of the overall national economy, and especially in the Western U.S. is key to this improvement. The strengthening national and regionally economies have been the drivers of visitors and convention attendance to Las Vegas during the last few years, which is ultimately reflected in tourism spending. This said, a growing number of analysts are saying that there are signs of an economic slowdown. 2019 will be a telling year.
weekly earnings 1-9
The Las Vegas MSA’s 12MMA average weekly earnings (not inflation-adjusted) was up by about $3.50, reaching $803.57 in November 2018. This growth trend began more than 3½ years ago in September 2014. On a YOY basis, the 12MMA was up $25 (3.2%) from November 2017.
When viewed on an inflation-adjusted basis, however, earnings rose only about two dollars in November from the month prior, to $673.15 (in 2007 dollars). YOY real earnings rose by 0.7% ($5) compared to November 2017. Moribund real wage growth has received a lot of attention for some time by economists. It is partially a function of a skills gap, the growth of the “gig economy” and ongoing automation trends.
Las Vegas’ average weekly real wage is $78 (10.3%) below the most recent inflation-adjusted peak of $751 that occurred close to 11 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains closer to the trough than the peak.
weekly hours 1-9
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA remained at 33.9 in November 2018, the same level recorded last month. Weekly hours had been plodding upward since June 2016, but have flattened in recent months just below the state average. On a YOY basis, average weekly hours are up 0.1 hours from November 2017.
In Q3, 2018, the Nevada U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.3-point drop to 9.4%. While this should suggest that business reliance on part-time workers continues to decrease, the figure is still among the highest in the nation and suggests that a substantial number of new jobs being created are for part-time work, or that positions have been shifted into independent contracting roles. These factors may explain the recent plateau for weekly hours worked even as we reach “full employment.”
fuel 1-9
The price of gas in Las Vegas rose slightly over the last month. As of January 2nd 2019, the price of regular unleaded gasoline in the Las Vegas MSA was $2.94, which is $0.19 (0.6%) lower than a month ago. Compared to a year ago, the price of unleaded is up $0.33 or 12.6%.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. High gas prices could have a deleterious effect on tourist spending in Las Vegas.
According to AAA, “Heading into 2019, gasoline demand is expected to dwindle during the month of January, an expected change following the busy holiday travel season. At the same time, OPEC will begin production cuts on January 1, with hopes that the shift in global supply will push oil prices higher. The effectiveness of the cuts will likely not be known until later in the first quarter. 
“All eyes are on OPEC to kick off the year,” said Jeanette Casselano, AAA spokesperson. “Many are waiting to see if they stick to their promise to cut crude production by 1.2-million b/d and if the proposed cuts will be enough to restore balance to the market.” 
Over the past few years, OPEC and partnering countries have demonstrated a strong resolve to comply with proposed cuts in production. It is likely that the cartel will reconvene in April, and if there is a need to further balance global supply and demand, OPEC will likely tweak current production numbers at that meeting.”
electric 1-9
Electric meter hookups’ 12MMA in October 2018 reached 822,583. Total hookups were up 1.8% from October 2017. Over the last 33 months, the annual growth rate for electric meter hookups has hovered between 1.7% and 1.9%. This hints at stable growth in business and household formation, as well as overall population, in the Las Vegas Valley. The peak YOY growth rate occurred March 1990 at 10.5%.
pot 1-9
Nevada excise tax revenues generated from marijuana sales through the first 16 months of its collection are now over $101 million, with the most recent recorded month, October 2018, seeing a whopping 10.1% increase from the previous month. October brought in about $8.2 million in combined retail and wholesale excise taxes. The most readily available report by the Nevada Department of Taxation accounts for only retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at points of sale in the dispensaries, or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged only to recreational users purchasing marijuana at a dispensary.
According to the Department’s original forecast, tax revenue from the sale of marijuana were expected to reach $120 million in the first 2 years. Collections indicate that the performance is on track to exceed the Department’s forecast.

Reno-Sparks Economic Metrics

Below are all the latest economic data available for Northern Nevada. Please feel free to share these graphs far and wide — and as always, don’t hesitate to contact us with questions.
 
stat

posit r emp index

In August 2018, the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks increased by 0.1 points to 99.5. While the Index has been increasing at a slower rate, it continues making progress closer to the all-time high. The Index is up 0.7 points since August 2017. It peaked more than 12 years ago in December 2005 at 99.8 aka 100.0. The trough of 89.6 occurred in January 2010.

r job growth

Reno-Sparks job growth dropped 0.1 points between July and August, from 4.5% to 4.4% on a 12MMA basis. The rate of growth is down 0.4 points from the 4.8% recorded in a year ago in August 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%). The region’s previous record 12MMA high was in August 2016 when jobs grew by 4.9%.
The 12MMA headline unemployment rate fell 0.1 points to 3.8% in August. When compared to the August 2017 headline rate of 4.5%, this August’s rate was 0.7 percentage-points lower. Reno has reached unemployment rates seen before the Great Recession.
r yoy
There were 88,267 construction jobs in Nevada in August 2018. 17,100 (or 19.4%) of those jobs were in the Reno-Sparks MSA (12MMA). This is a jump of 5% from the 16,292 jobs reported in August 2017, and the second consecutive month of significant job growth for the area. Reno’s very healthy economy has produced strong residential and commercial real estate demand, but also has led to a housing shortage and certain types of commercial space, especially industrial.
The latest stats show that 7.7% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 71% of the peak. At the time of the peak, the industry accounted for 11.1% of all jobs. The large number of jobs in the construction sector was a consequence of the pre-Recession real estate bubble. The sector bottomed out in February 2012 when there were only 8,792 construction jobs.
r visitor volume
The annualized visitor count for Washoe County decreased 0.67% from July 2018 to 5.09 million in August. Despite a YOY visitation growth rate of just 0.4%, Washoe County continues to outpace growth in Clark County, which had a visitation contraction in August of -1.8%.
Early in 2016, Washoe had been lagging behind Clark in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe beating those of Clark every month since June 2016 for the reasons noted in the Clark County Stat Pack section.
Washoe County has now seen YOY growth in visitor volume every month since January 2015, at an average annualized rate of about 3%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains and continues to grow stronger.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 6% in August 2018, and is up 0.66% from the previous month. This leaves total revenue at $71.9 million. In comparison, Clark County saw a YOY growth rate of .8% this August. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3.3%, corresponding to a similar growth streak in visitor volume.
Gaming revenues peaked nearly 12 years ago in June 2006 at $89.4 million, and the county is now at 80% of that peak. On an annual growth rate basis, the peak of 5.5% happened 12 years ago in May and June of 2006.
r taxable retail
Washoe County’s economy continues to benefit from rising taxable retail sales. In July 2018, the 12MMA growth rate was 6.9% YOY, an increase of 0.6 points from July 2017. The YOY growth rate has remained essentially flat over the last 4 months. Taxable retail sales reached $715.1 million in July on a 12MMA basis, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). Washoe’s taxable sales growth rate is 2.5 points higher than the statewide average.
Job growth, success in business attraction and retention, resulting in construction activity plus proximity to the Bay Area and the Pacific Northwest, are driving the region’s economy, though increasing visitation has also contributed.
r weekly earnings
The 12MMA of the nominal average weekly wage (not adjusted for inflation) in the Reno-Sparks MSA grew about $6 (or 0.77%) in August 2018 over the previous month, to $823. This marked the 14th consecutive month of growth. On a YOY basis, this wage is up 3.9% from $792 in August 2017.
The inflation-adjusted (real) 12MMA wage for August 2018 of $693 is up almost $4 from the previous month’s wage, and is $9 (0.77%) higher than the wage recorded 12 months ago. Reno-Sparks workers are starting to see real wage growth pick up after more than a year of relative stagnation.
In July, the region’s average weekly earnings were 3% higher than the Las Vegas average of $672. Reno-Sparks’ real wage has fallen considerably from the $730 peak in May 2016, just over 2 years ago.
r weekly hours
In August 2018, the Reno-Sparks MSA’s 12MMA average weekly hours worked remained at the previous month’s 35.3 hours. Weekly hours worked appear to be leveling off some after trending down since October 2017. Conversely, weekly hours in Las Vegas seem to be leveling after trending slowly upward. On a YOY basis, 12MMA weekly hours for Reno-Sparks are down 0.6 points from August 2017. The most recent weekly hours worked peak happened in July 2009 at 36.8 hours, while the trough of 32.5 hours happened in September 2014.
r fuel
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of Sep 23, 2018 was $3.44, up $0.04 (1.1%) from $3.40 the previous month. When compared to the previous year, the price of regular unleaded is up $0.43 (14.3%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “The September switch-over to winter-blend gasoline ushered in cheaper gas prices compared to the summer, but that drop was short lived. Crude oil accounts for half of the retail pump price and crude is selling at some of the highest price points in four years. That means fall and year-end prices are going to be unseasonably expensive. 
Motorists in the West Coast region are paying the highest prices for retail gasoline in the country, with six of the region’s states represented in the nation’s top 10 most expensive list. Hawaii ($3.84) is the nation’s most expensive market, followed by California ($3.80), Washington ($3.44), Alaska ($3.33), Oregon ($3.29), Nevada ($3.27), and Arizona ($2.91). All prices in the region have increased on the week, with California (+7 cents) leading the way. Nevada increased five cents, while Hawaii and Washington each increased four cents. 
The EIA’s weekly petroleum status report showed West Coast gasoline stocks increased slightly to 27.89 million bbl during the week that ended on September 28. Stocks are approximately 760,000 bbl lower than where they were at this time last year, which could lead to price volatility if there are any supply shocks in the region this week.”
r gold
Per the World Gold Council, in September the 12MMA month-end spot price for an ounce of pure gold fell by about $8 (0.6%) from August to just over $1,275. On a YOY basis, the 12MMA price of gold is still up 2.4%. The peak of $1677.77 occurred in December 2012. Despite the dips in recent months, the YOY growth rate has generally trended upward for 2 years, and is up for the last 10 months straight.

Las Vegas Economic Metrics

Below are all the latest economic data available for Southern Nevada. Please feel free to share these graphs far and wide — and as always, don’t hesitate to contact us with questions.
 
stat highlights

positive

emp index
In August 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) remained at 98.8, with the previous month’s revised jobs numbers moving up slightly. On a YOY basis the Index is up 0.4 points from August 2017, and it is now just 1.2 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate remained steady at 5% in August for the third consecutive month. The 12MMA is 0.4 points below last August’s 5.5%. This metric reached its lowest level more than 11 years ago in October 2006 at just 4%.
The 12MMA rate of job growth in the Las Vegas MSA increased 0.1 points to 2.8% in August. However, YOY job growth is down 0.2 points from the previous month to 3.7%. The 12MMA job growth rate has been on a generally downward trajectory since September 2015. An analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor.
At the same time, the economy continues to strengthen, performing better than some analysts had predicted. While President Trump’s economic policy of deregulation and tax cuts, and his willingness to add to the deficit, may be sustaining the strength of national job growth in the short-term, there are consequences looming down the road and impacts related to the Administration’s implemented and threatened tariffs.
yoy
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving (especially industrial) commercial markets. In August 2018, the number of Southern Nevada construction workers rose by 5,992 (12MMA) from August 2017, a 10.4% jump. This was a clear improvement over the previous month’s YOY increase of 9.7%. On a 12MMA, basis, August’s gains put total construction jobs at 63,600. That marks 74 straight months (more than 6 years) of job growth. President Trump’s decision to put tariffs on metals from the E.U., Canada and Mexico, along with industrial equipment from China, are likely to have affect the Las Vegas construction industry.
In August 2018, construction jobs represented 6.7% of the region’s job-base, holding steady from July. During the real estate bubble of 2000-2007, construction jobs accounted for as much as an extraordinary 11.4% of all MSA jobs, with construction jobs peaking at 108,833 in November 2006.
visitor volume
The Las Vegas MSA’s 12-month visitor count (annualized) in August 2018 was 41.9million. The number of visitors to Clark County declined for the third consecutive month, falling by just 0.02% from June. On a YOY basis, this was the 13th consecutive month of annualized visitation decline, down 1.8% compared to August 2017. We believe that the primary reasons for the slowdown are: limited room capacity, the strong dollar making vacationing in the US pricier for foreign visitors, and a move back to the longer trend rate of growth.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. Year-to-date visitor volume in August 2018 is 28.2 million. That is down versus the same points in 2016 (28.8 million) and 2017 (28.5 million), and it will be difficult for 2018 to match either of the previous two years.
convention
In August, Clark County’s annualized convention attendance saw a 1.2% increase from the previous month, to 6.53 million. That figure represents a 0.5% gain from August 2017. The annualized peak of 6.65 million convention attendees occurred in December 2017.
Convention attendance saw significant gains in 2016, with 10 months above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen sharply to 3.9%. During the first 8 months of 2018, attendance grew by an average of 3.5% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. 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, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
hotel rev
In August 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $111.62, a loss of $0.09 (0.08%) from the previous month. When compared to August 2017, RevPAR is down even more, falling $2.89 (-2.5%). This is the 6th straight YOY (current month vs. same month in previous year) decline in RevPAR after more than 7 consecutive years of growth. The RevPAR 12MMA peak of $119.43 occurred in December 2007. This a metric to definitely watch.
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 baccarat was down 0.85% in August from the month prior, for a total of $737.4 million. The streak of positive YOY growth continues, reaching 43 consecutive months with an increase of 0.8% from August 2017. Net baccarat revenues are at 88% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by 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 as US household disposable income has increased.
home sales
Of the 5,068 total Las Vegas MSA home sales recorded by Home Builders Research in August, 4,201 were resales, while 867 were new home sales. According to Home Builders Research, total (new and resale) Clark County home closings, on a 12MMA basis, were up 0.22% in August compared to the previous month. On a YOY basis, the number of all home sales were 4.5% higher than in August 2017.
The 12MMA for new home sales saw a YOY growth rate of 17% in August, while existing home sales saw slower growth at 2.3%.
home price
Per Home Builders Research, August’s 12MMA median home price (new and resale) was $268,146, a 1.25% gain over the previous month. Compared to August 2017, the price is up 14.5%, the highest YOY growth in weighted home price since September 2014. The YOY growth rate has now been rising steadily for 15 months, but is well below the YOY peak of 35.8% growth recorded in February 2005. The current median home price remains well below the February 2007 peak of $305,333. August’s figure is about 88% of the peak price.
The median new home price was up 9.9% from August 2017, setting a new peak for the 17th consecutive month at $367,261. The previous cycle peak of $327,066 occurred in February 2007.
The median resale home price was $247,625 in June, a 14.7% jump from a year earlier. The peak of $286,833 occurred more than 11 years ago in April 2007. The resale average has now recovered more than 86% of its pre-recession peak price.
The rate of home appreciation for new and resale homes, combined, continued its rising trend in August. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Through the first 8 months of 2018, the YOY growth rate has averaged 13.1%.
These figures are not inflation-adjusted, or “real.” Therefore, the real value of homes today compared to the pre-recession peak is overestimated.
nominal
Starting this month, RCG is adding new housing chart to its monthly Stat Pack line-up for Las Vegas. Our new chart tracks monthly Total Sales Volume (“TSV”). The data series starts in August 2001 goes through latest available month. TSV is calculated by multiplying monthly closings by the median new, resale and weighted/combined home prices. We’d like to note that the three median home prices are based on monthly moving averages (“12MMA”). This is done to account for seasonality in prices. The TSVs’ 12MMAs in August 2018 were: $318.7 M for new homes, $1,045 M for resales and $1,364 M for the combined total. Clearly, the upward trajectory is quite pronounced especially for resales, because of their greater availability, leading to more competitive prices. New home TSVs are being affected by rising construction and land costs.
The August TSV percent changes from the previous month were 2.4% for new, 1.4% for resales and 1.6 % for combined. Compared to August, 2017, the percent changes in TSVs were 28.8% for new, 17.1% for resales and 19.7% for combined.
As point of reference, the Peak TSVs occurred in July, 2016 ($1,043B-new), January, 20016 $1,225-resales) and March, 2006 ($2,326-combined). Monthly TSVs are now 31% of the peaks for new home sales, 78% for resales and 59% for total combined sales.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA rose by 1.8 points to 174.2 in July 2018, growing 11.4% compared to July 2017. The Las Vegas index has risen for 71 straight months, while the YOY growth rate has increased steadily since March 2017. July’s U.S. 12MMA index was up another point to 207.3, a jump of 6.3% compared to the previous year.
The Las Vegas index peaked at 233.2 in December 2006, with the latest index reaching 74.7% of that 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 mtg
As we wrap up the third quarter of 2018, the 30-day LIBOR moved moderately higher during September, finishing the month up 20 basis points from August at 2.27%. The 10-year U.S. Treasury jumped 30 basis points from 2.88% to 3.18%. The S&P 500 posted its best quarter (up 7.2%) since 2013. Health care was the top-performing sector of Q3, surging 14.1%, its highest quarterly gain since the first quarter of 2013. Industrials and tech, during the same period, rose 9.7% and 8.5%. Meanwhile the Fed raised rates from 2.00% to 2.25% and has penciled in 75 basis points of rate increases during the next 9 months.
The cost to borrow funds has already begun to creep up, with more forecasted rate increases on the horizon. If your property is stabilized, lock in long-term, fixed-rate loans now.
taxable retail
July’s taxable retail sales continue to rise in Clark County, with 0.69% growth to $3.57 billion from the month prior. On a YOY basis, growth in the 12MMA increased to 4.6% in May. We believe much of the dollar growth in taxable sales is due to healthy visitor spending numbers and strong construction activity.
The consistent growth of taxable sales has given local and state governments more money to work with. The strength of the national economy, especially the Western U.S. is key to this improvement. This strength is the driver of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending. We appear to have settled into a longer-term annual trend rate of growth of around 3-4%.
weekly earnings
The Las Vegas MSA’s 12MMA average weekly earnings (not inflation-adjusted) was up by about $3, reaching $797 in August 2018. This growth trend began more than 3½ years ago in September 2014. On a YOY basis, the 12MMA was up $30 (3.5%) from August 2017.
When viewed on an inflation-adjusted basis, however, earnings rose only a dollar in August from the month prior, to $671.53 (in 2007 dollars). YOY real earnings rose by 1.1% ($7) compared to August 2017. Moribund wage growth has received a lot of attention for some time by economists. It is partially a function of the growth of the “gig economy” and ongoing automation trends.
Las Vegas’ average weekly real wage is $80 (11%) below the most recent inflation-adjusted peak of $751 that occurred close to 11 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains closer to the trough than the peak.
weekly hours
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA remained at 33.9 in August 2018, the same level recorded for the last three months. Weekly hours had been plodding upward since June 2016, but have flattened in recent months just below the state average. On a YOY basis, average weekly hours are up 0.2 hours from August 2017.
In Q2, 2018, the Nevada U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.7-point drop to 9.7%. While this should suggest that business reliance on part-time workers continues to decrease, the figure is still among the highest in the nation and suggests that a substantial number of new jobs being created are for part-time work, or that positions have been shifted into independent contracting roles. These factors may explain the recent plateau for weekly hours worked even as we reach “full employment.”
fuel
The price of gas in Las Vegas rose slightly over the last month. As of October 4, the price of regular unleaded gasoline in the Las Vegas MSA was $3.21, which is $0.8 (2.7%) higher than a month ago. Compared to a year ago, the price of unleaded is up $0.51 or 19%.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. High gas prices could have a deleterious effect on tourist spending in Las Vegas.
According to AAA, “The September switch-over to winter-blend gasoline ushered in cheaper gas prices compared to the summer, but that drop was short lived. Crude oil accounts for half of the retail pump price and crude is selling at some of the highest price points in four years. That means fall and year-end prices are going to be unseasonably expensive. 
Motorists in the West Coast region are paying the highest prices for retail gasoline in the country, with six of the region’s states represented in the nation’s top 10 most expensive list. Hawaii ($3.84) is the nation’s most expensive market, followed by California ($3.80), Washington ($3.44), Alaska ($3.33), Oregon ($3.29), Nevada ($3.27), and Arizona ($2.91). All prices in the region have increased on the week, with California (+7 cents) leading the way. Nevada increased five cents, while Hawaii and Washington each increased four cents. 
The EIA’s weekly petroleum status report showed West Coast gasoline stocks increased slightly to 27.89 million bbl during the week that ended on September 28. Stocks are approximately 760,000 bbl lower than where they were at this time last year, which could lead to price volatility if there are any supply shocks in the region this week.”

Stat Update: Southern Nevada Economic Metrics

The U-3 unemployment rate, or “headline rate”, after ticking up 0.1 points in Q1 2018, dipped by 0.2 points in Q2. The rate is now 0.3 points above the average rate for 2007 (4.6 percent), the year the Great Recession hit. The U-6 rate, which measures under-employment, saw a 0.7-point decline from 10.4 percent to 9.7 percent, which is still the 5th highest in the country. Employer reliance on part-time workers explains the rate, in part.
For all the latest metrics, scroll down. As always, feel free to send questions to RCG Economics Principal John Restrepo at jrestrepo@rcg1.com. 
stat highlights

positive

1
In June 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) remained at 98.7, taking a step it had not made for 4 straight months and impelled by May’s impressive Las Vegas MSA job numbers. On a YOY basis the Index is up 0.4 points from April 2017. The Index is now just 1.3 points below the November 2006 peak of 100.
2
The 12MMA of Clark County’s headline unemployment rate was 5% in June, another drop of 0.1 points following May. The 12MMA is 0.5 points below last June’s 5.5%. This metric reached its lowest level more than 11 years ago in October 2006 at just 4%. Southern Nevada is now theoretically at “full employment.” Strong federal job numbers had foreshadowed June’s continued decline in unemployment for the Las Vegas MSA.
In June the 12MMA rate of job growth in the Las Vegas MSA held at 2.6% for the 4th consecutive month. YOY job growth is up by 0.1 points from May to an even 3%. The 12MMA job growth rate has been on a downward trajectory since September 2015. Analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor. At the same time, the economy continues to strengthen, performing better than some analysts had predicted. While President Trump’s economic policy of deregulation and tax cuts, and his willingness to add to the deficit, may be sustaining the strength of national job growth in the short-term, there are consequences looming down the road. Also, it will take some time to see the full impact of the Administration’s implemented and threatened tariffs.
3
The U-3 unemployment rate, or headline rate, for Nevada, after ticking up 0.1 points in Q1 2018, moved back down by 0.2 points in Q2. The U-3 rate is now 0.3 points above the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, had a 0.7-point decline from 10.4% to 9.7%.
In terms of the U-3 rate, Nevada fell one spot to have the 6th highest headline rate in the nation. While the U-6 rate saw strong improvement, Nevada still holds the 5th highest rate in the country, falling from 3rd-highest in the previous quarter. Nevada businesses maintain a significant reliance on part-time workers.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving commercial markets. In June 2018, the number of Southern Nevada construction workers rose by 5,042 (12MMA) from June 2017, an 8.8% increase. This was a slight improvement over the previous month’s YOY increase of 8.7%. June’s gains put total construction jobs at 62,058. That marks 72 straight months (or 6 years) of construction job growth. President Trump’s decision to put tariffs on metals from the E.U., Canada and Mexico, along with industrial equipment from China, are likely to have an impact on the Las Vegas construction industry.
In June 2018, construction jobs represented 6.5% of the region’s job-base, an increase of 0.3 points from the previous month and recovery of most of the May’s decline. During the real estate bubble of 2000-2007, construction jobs accounted for as much as an extraordinary 11.4% of all MSA jobs, with construction jobs peaking at 108,833 in November 2006.
visitor volume
The Las Vegas MSA’s 12-month visitor count (annualized) in June 2018 was 42 million. The number of visitors to Clark County declined again after just 2 months of gains. The decrease in June from the previous month was 0.7%. On a YOY basis, this was the 11th consecutive month of annualized visitation decline, down 1.7% when compared to June 2017. We believe that the primary reasons for the slowdown are: limited room capacity, the strong dollar making vacationing in the US pricier for foreign visitors, and a move back to the longer trend rate of growth.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. Year-to-date visitor volume in June 2018 is 21.0 million. That is lower than the same points in 2016 (21.3 million) and 2017 (21.2 million), and if trends continue it will be difficult for 2018 to match either of the previous two years.
6
In June, Clark County’s annualized convention attendance saw a 0.22% increase from the previous month, at 6.55 million. While there has been more monthly volatility in 2018, annualized convention attendance is still up 3.7% compared to June 2017. The annualized peak of 6.65 million convention attendees occurred in December 2017.
Convention attendance saw significant gains in 2016, with 10 months above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen sharply to 3.9%. During the first 6 months of 2018, attendance grew by an average of 4.7% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. 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, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
7
In June 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $113.35, a loss of $0.58 (0.51%) from the previous month. When compared to June 2017, RevPAR is down even more, falling $1.45 (-1.3%). This is the 4th straight YOY decline in RevPAR after more than 7 consecutive years of growth. The RevPAR 12MMA peak of $119.43 occurred in December 2007. This a metric to definitely watch.
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.
8
On a 12MMA basis, net baccarat revenue was up 0.22% in June from the last month, for a total of $742.9 million. The streak of positive YOY growth was continues, reaching 41 consecutive months with an increase of 2.8% from June 2017. Net baccarat revenues are at 89% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by 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 as US household disposable income has increased.
9
Of the 5,011 total Las Vegas MSA home sales in June, 4,168 were resales, while 843 were new home sales. According to Home Builders Research, in June, total (new and resales) Clark County home closings, on a 12MMA basis, were down -0.38% from the previous month. On a YOY basis, total home sales were 5.4% higher than in June 2017.
The 12MMA for new home sales saw a YOY growth rate of 15.7% in May. Existing home sales saw slower growth in June at 3.6%.
10
Per Home Builders Research, June’s 12MMA median home price (new and resale) was $262,245, a 1.1% gain over the previous month. Compared to June 2017, the price is up 14%, the highest YOY growth in weighted home price since September 2014. The YOY growth rate has now been rising steadily for 13 months, but is well below the YOY peak of 35.8% growth in February 2005. The current median home price remains well below the February 2007 peak of $305,333. June’s figure is about 86% of the peak price.
The median new home price was up 8.8% from June 2017, marking 15 consecutive months of setting new records with a new peak of $359,377. The previous cycle peak of $327,066 occurred in February 2007.
The median resale home price was $242,458 in June, a 14.5% jump from a year earlier. The peak of $286,833 occurred more than 11 years ago in April 2007. The resale average has now recovered 84.5% of its pre-recession peak price.
The rate of home appreciation for new and resale homes, combined, continued its rising trend in May. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Through the first 6 months of 2018, the YOY growth rate has averaged is 12.7%.
11
The 12MMA 30-year fixed-rate mortgage in the Western Region continues to climb. An increase of 0.04 points in July puts the rate at 4.2% (12MMA). This was the 6th consecutive increase in the rate. The 12-year peak of 6.4% happened in October 2006. While the 30-year fixed rate should remain relatively low, it will likely continue to go up because of Federal Reserve actions.
12
The 12MMA Case-Shiller home price index for the Las Vegas MSA crossed 170 in May 2018, a rise of 10.1% compared to May 2017. The Las Vegas index has risen for 69 straight months, while the YOY growth rate has grown steadily since March 2017. The US index in May was up another 1.1 points to 205.3, an increase of 6% compared to the previous year. Both indexes have been on the rise since 2012.
The Las Vegas index peaked at 233.2 in December 2006, with the latest figure at index is 73% of that 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.
13
On a 4-quarter moving average basis, the Housing Opportunity Index (“HOI”) for the Las Vegas MSA fell for the 6th straight quarter, this time by a whopping 4.1 points to 56.4 in Q2 of 2018. Over 6 quarters the Las Vegas HOI has dropped by a total of 11.3 points. The Las Vegas HOI peaked at 86.2 in Q1 2012 and bottomed out at 15.4 in Q1 2007 at the height of the housing boom; the average is 71.8 for the last 10 years. Affordable housing is currently on the decline in the Las Vegas MSA.
The U.S. index experienced a decline as well, falling from 59.7 in Q1 2018 to 59.2 in Q2. Housing prices nationally are rising slightly but trending stable.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the selected jurisdiction, assuming standard mortgage underwriting criteria.
apartment market
The Las Vegas Valley’s 12MMA apartment vacancy rate fell slightly up to 7.5% in Q2 2018. The general trend since 2011 has been down, though apartment vacancy has fluctuated between 7.5% and 7.7% since Q4 2016. The recovery in apartment vacancy has been slow, peaking at 10.8% in Q2, 2010 just three years from a low of 5.1% in Q1, 2007.
15
The 10-year U.S. Treasury moved moderately higher during July, finishing the month up 12 basis points from June at 2.98%. The 30-Day LIBOR did not track with the Treasury, decreasing slightly by 3 basis points to 2.07%. The Federal Reserve upgraded its assessment of the U.S. economy, but left interest rates unchanged for now. The committee is widely expected to approve two additional rate increases this year. There were many potential market moving events in July, including ongoing threats from the President to impose $505 billion in tariffs on Chinese imports and Facebook posting the largest one-day market value decrease by any company in U.S. stock market history. Despite these events, the S&P 500 closed out July with solid gains.
As interest rates creep up to and past 3%, investors are feeling pressured to secure long-term, fixed rate loans on their commercial properties.
taxable retail
Taxable retail sales continue to rise in Clark County, with 0.46% growth to $3.52 billion from April to May. On a YOY basis, growth in the 12MMA remained at 3.6% in May. We believe much of the dollar growth in taxable sales is due to healthy visitor spending numbers and strong construction activity.
The consistent growth of taxable sales has given the local and state government more money to work with. The strength of the national economy and its local and regional markets are key to this improvement. These larger economies are the primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region. We appear to have settled into a longer-term rate trend of around 3-4% sales growth per year.
17
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA remained at 33.9 in June 2018, the same level recorded in May. Weekly hours had been plodding upward since June 2016, but fell last month. On a YOY basis, average weekly hours are up 0.4 hours from June 2017.
In Q2, 2018, the U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.7-point drop. While this should suggest that business reliance on part-time workers continues to decrease, the figure is still among the highest in the nation and suggests that a substantial number of new jobs being created are for part-time work, or that positions have been shifted into independent contracting roles. These factors may explain the recent plateau for weekly hours worked even as we reach “full employment.”
18
The price of gas in Las Vegas had been rising steadily for months but now appears to be on the decline. As of August 13, the price of regular unleaded gasoline in the Las Vegas MSA was $3.13, which is $0.6 (-2.9%) lower than a month ago. Still, when compared to a year ago, the price of unleaded is up $0.56.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. High gas prices could have a deleterious effect on tourist spending in Las Vegas.
According to AAA, “The Energy Information Administration’s (EIA) latest reports detail a drop in consumer gasoline demand and a build in gasoline inventories. In fact, this was the first increase in inventories in six-weeks with a substantial addition of 3 million bbl. With a flat national average, U.S. gasoline supply and demand suggest they are balancing. But that’s not to say that we could not see spikes in demand closer to Labor Day as motorists squeeze in those final road trips. 
Pump prices in states in the West Coast region are among the highest in the country: Hawaii ($3.76), California ($3.61), Washington ($3.39), Alaska ($3.36), Oregon ($3.27), Nevada ($3.19) and Arizona ($2.89). When compared to last week, all pump prices in the region are down. Arizona (-2 cents) saw the largest drop. 
According to EIA’s petroleum status report for the week ending on August 3, inventories of gasoline in the region grew by 200,000 bbl. They now sit at 30.4 million bbl, which is nearly four million bbl higher than total levels at this time last year. Growing supplies will provide a cushion for price fluctuations, which could help pump prices stabilize if there are any shocks to regional supply this week.”
19
Electric meter hookups’ 12MMA in June 2018 reached 817,359. Total hookups were up 1.8% from June 2017. Over the last 33 months, the annual growth rate for electric meter hookups has hovered between 1.7% and 1.9%. This hints at stable growth in business and household formation, as well as overall population, in the Las Vegas Valley. The peak YOY 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 12MMA for Clark County’s E-P Ratio remained flat at 1.3 in June May. Relative to June 2017, the E-P Ratio is down 0.3 points from 1.6.
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 for nearly 2 years, since October 2016.
21
Nevada excise tax revenues generated from marijuana sales through the first 11 months are $62.6 million, with the most recent recorded month, May 2018, seeing a 8.6% increase in revenue from the previous month. May brought in about $7.1 million in combined retail and wholesale taxes, compared to $6.5 million in March. The most readily available report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at points of sale in the dispensaries, or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged only to recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million in the first 2 years. Collections over the first 11 months indicate that the performance may slightly exceed the Department’s forecast.

Update: Northern Nevada Metrics

Reno-Sparks job growth, on a 12-month moving average (MMA), dropped 0.2 points in June, from 4.8 percent to 4.6 percent. The rate of growth is down 0.1 points from the 4.7 percent recorded in a year ago. The 12MMA “headline” unemployment rate fell 0.1 points to 3.9 percent in June. When compared to the June 2017 headline rate of 4.6 percent, this May’s rate was 0.7 percentage-points lower. Reno has reached rates seen before the Great Recession.
For the rest of the Reno-Sparks metrics, scroll down.
r stat highlights
 

r positive

r assisted new jobs
The FY2018 final results for EDAWN-assisted new jobs were adjusted to 2,148 jobs. This is a 35.4% decrease over the number of assisted new jobs in 2017. The FY2019 forecast also predicts 2,500 new jobs, a considerable drop from previous years. EDAWN’s latest data supports its success in enabling job growth and diversification. Note: These figures do not include jobs related to Tesla.
r emp index
In June 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) for Reno-Sparks held steady at 99.4. While the Index has been increasing at a slower rate, it continues making progress closer to the all-time high. The Index is up 0.7 points since May 2017. It peaked more than 12 years ago in December 2005 at 99.8 aka 100.0. The trough of 89.6 occurred in January 2010.
1
In June Reno-Sparks job growth, on a 12MMA, dropped 0.2 points from 4.8% to 4.6%. The rate of growth is down 0.1 points from the 4.7% recorded in a year ago in June 2017. The lowest rate of growth in the last 10 years happened in December 2009 (-9.3%). The region’s previous record 12MMA high was in August 2016 when jobs grew by 4.9%.
The 12MMA headline unemployment rate fell 0.1 points to 3.9% in June. When compared to the June 2017 headline rate of 4.6%, this May’s rate was 0.7 percentage-points lower. Reno has reached rates seen before the Great Recession.
2
The U-3 unemployment rate, or headline rate, for Nevada, after ticking up 0.1 points in Q1 2018, moved back down by 0.2 points in Q2. The U-3 rate is now 0.3 points above the average rate for 2007 (4.6%), the year the Great Recession hit. Along with this drop in the U-3 rate, the U-6 rate, which measures underemployment, had a 0.7-point decline from 10.4% to 9.7%.
In terms of the U-3 rate, Nevada fell one spot to have the 6th highest headline rate in the nation. While the U-6 rate saw strong improvement, Nevada still holds the 5th highest rate in the country, falling from 3rd-highest in the previous quarter. Nevada businesses maintain a significant reliance on part-time workers.
3
There were 86,658 construction jobs in Nevada in June 2018. 16,958 (19.6%) of those jobs were in the Reno-Sparks MSA (12MMA). While this is a notable jump of 6.7% from the 15,892 jobs reported in June 2017, construction jobs were largely unchanged since February of this year. Reno’s very healthy economy has produced strong residential and commercial real estate demand, but also to shortages of housing units and certain types of commercial space, especially industrial.
The latest stats show that 7.7% of the region’s payroll job-base is in construction. Construction jobs in the Reno-Sparks MSA peaked at 24,042 in August 2006 on a 12MMA basis. Current construction jobs are at 70.5% of the peak. At the time of the peak, the industry accounted for 11.1% of all jobs. The large number of jobs in the construction sector was a consequence of the pre-Recession real estate bubble. The sector bottomed out in February 2012 when there were only 8,792 construction jobs.
4
The annualized visitor count for Washoe County increased 0.09% from May 2018 to just over 5.15 million in June. With a YOY visitation growth rate of 3.4%, Washoe County continues to outpace growth in Clark County, which had a visitation growth rate in May of -1.7%. See Clark County commentary.
Early in 2016, Washoe had been lagging behind Clark in visitor growth, but the tables have turned with YOY visitor growth rates in Washoe beating those of Clark every month since June 2016 for the reasons previously noted in the Clark County Stat Pack section.
Washoe County has now seen YOY growth in visitor volume every month for 3.5 straight years (since January 2015) at an average rate of 3%. The 12MMA peak occurred in May 2004, when 467,904 visitors came to Washoe. The highest annual growth rate happened in January 2013, when visitor volume grew 5.8%. Despite earlier challenges, the Reno-Sparks hospitality industry has made important gains and continues to grow stronger.
r gross gaming
Washoe County’s 12MMA YOY gross gaming revenue grew by 6.4% in June 2018. This brings total revenue up to $71.4 million, or 80% of the peak (see below). In comparison, Clark County had a YOY growth rate of 2.7% this June. Both counties saw an increase in the gross gaming revenue growth rate. The YOY growth rate for Washoe County has been positive for more than 3 years straight at an average of 3%, corresponding to a similar growth streak in visitor volume.
Gaming revenues peaked nearly 12 years ago in June 2006 at $89.4 million. On an annual growth rate basis, the peak of 5.5% happened 12 years ago in May and June of 2006.
r taxable retail
Washoe County’s economy continues to benefit from rising taxable retail sales. In May 2018, the growth rate was 6.9% YOY, up 0.5 points from May 2017. Compared to April 2018, the YOY growth rate is flat. Taxable retail sales reached $708 million in April, having already surpassed the previous peak (March 2016) on a nominal basis (not inflation-adjusted). As the chart shows, Washoe’s taxable sales growth is 2.6 points higher than the overall Nevada average.
Success in business attraction and retention, and proximity to the Bay Area and the Pacific Northwest, is driving the region’s economy. It is the primary cause of growth in taxable retail sales, though increasing visitation has also contributed.
5
The Q2, 2018 median sales price of $375,000 for single-family home resales in the Reno-Sparks area represents a 13% jump YOY. Compared to the previous quarter, the price grew by 1.9%. The Q2 median price is now approximately $58,684 (18.6%) greater than the $316,316 that would have resulted from using the 1990-2001 average annual appreciation rate of 4% per year. Last quarter the difference was $54,730. The Reno-Sparks median price is increasing rapidly. Housing affordability is a looming problem that is being monitored closely by public officials and community leaders for its potential negative impact on economic growth and business attraction.
6
In June 2018 MLS home resales in Washoe County fell by 2.4% from the previous month to 549 on a 12MMA. When compared to May 2017, resales fell by 0.4%, which is a major downward shift of 4 points compared to the same figure for May, ending more than 3 straight years of YOY increases with an average rate of growth of 4.2%.
The median sales price rose to $361,464 (12MMA) in June, a 13.9% jump from a year prior. By comparison, the Las Vegas median resale price in June rose by 14.5% but is much lower at $260,000. The looming housing affordability issue in both regions also applies to the new home market.
r housing opp
In Q2, 2018 the Housing Opportunity Index (“HOI”) for the Reno-Sparks MSA dropped 3.4 points from 42.7 in Q1 to 39.3 on a four-quarter moving average (“4QMA”) basis. The U.S. index decreased by 0.5 points, from 59.7 to 59.2, during the same period. The Reno-Sparks 4QMA HOI is now 19.9 points (34%) lower than the national number. On a YOY basis, the Reno-Sparks index fell 9.3 points from 48.6 in Q2, 2017.
Reno-Sparks’ HOI peaked at 85.8 in Q1, 2012 and has been trending downward ever since. It bottomed out at 17.3 in Q4, 2006 at the peak of the housing boom. The 10-year average is 64.6. The region’s latest index is now 25.3 points below that 10-year average. There will be issues regarding housing affordability will spillover effects on economic growth and business attraction in Reno-Sparks if the index continues to deteriorate.
The HOI is based on the share of homes sold that are affordable to a family earning the median income in the Reno-Sparks MSA, assuming standard mortgage underwriting criteria.
7
According to Colliers International, Reno-Sparks Office vacancy continues on a downward trajectory in Q2 2018. Office vacancy fell 0.1 points from the previous quarter to 12% on a 4QMA basis, its lowest value in more than 13 years, since Q4, 2004. The Reno-Sparks Spec Office market has seen slow and steady improvement since Q3 2010, when the Spec Office market had reached peak vacancy of 21.6%.
The Industrial vacancy rate also fell in Q1, dropping 0.7 percentage-points and reaching 5.6%. After 5 consecutive quarters of increasing vacancy, the Industrial markets vacancy rate has now fallen 8 straight quarters and is now well below the 10% stabilized rate. Although a large amount of new product has recently come to market, the Reno-Sparks MSA has had a healthy appetite for Industrial space.
r weekly hours
In June 2018, the Reno-Sparks MSA’s 12MMA average weekly hours worked remained at May’s figure of 35.4. Weekly hours appear to be leveling off some after trending down since October 2017. Conversely, weekly hours in Las Vegas seem to be leveling after trending slowly upward. On a YOY basis, 12MMA weekly hours for Reno-Sparks are down 0.4 points from June 2017. The most recent weekly hours peak happened in July 2009 at 36.8 hours, while the trough of 32.5 hours happened almost 4 years ago in September 2014.
8
The average price per gallon for regular unleaded gasoline in Reno-Sparks as of July 13, 2018 was $3.38, down $0.04 (-1.7%) from $3.44 the previous month. When compared to the previous year, the price of regular unleaded is up $0.45 (15.4%). Gas prices have been rising steadily and could impact resident and business spending in other areas of the local economy.
According to AAA, “The Energy Information Administration’s (EIA) latest reports detail a drop in consumer gasoline demand and a build in gasoline inventories. In fact, this was the first increase in inventories in six-weeks with a substantial addition of 3 million bbl. With a flat national average, U.S. gasoline supply and demand suggest they are balancing. But that’s not to say that we could not see spikes in demand closer to Labor Day as motorists squeeze in those final road trips. 
Pump prices in states in the West Coast region are among the highest in the country: Hawaii ($3.76), California ($3.61), Washington ($3.39), Alaska ($3.36), Oregon ($3.27), Nevada ($3.19) and Arizona ($2.89). When compared to last week, all pump prices in the region are down. Arizona (-2 cents) saw the largest drop. 
According to EIA’s petroleum status report for the week ending on August 3, inventories of gasoline in the region grew by 200,000 bbl. They now sit at 30.4 million bbl, which is nearly four million bbl higher than total levels at this time last year. Growing supplies will provide a cushion for price fluctuations, which could help pump prices stabilize if there are any shocks to regional supply this week.”
9
Per the World Gold Council, in July, the month-end spot price for an ounce of pure gold fell by almost $4 (0.3%) from June to just over $1,292 on a 12MMA basis. This puts an end to 8 months of consecutive increases, but on a YOY basis, the price of gold is up 3.5%. Despite the small dip, the YOY growth rate has generally trended upward for 2 years and is up for the last 8 months straight.
10
Nevada excise tax revenues generated from marijuana sales through the first 11 months are $62.6 million, with the most recent recorded month, May 2018, seeing a 8.6% increase in revenue from the previous month. May brought in about $7.1 million in combined retail and wholesale taxes, compared to $6.5 million in March. The most readily available report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at points of sale in the dispensaries, or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged only to recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million in the first 2 years. Collections over the first 11 months indicate that the performance may slightly exceed the Department’s forecast.

Updated Las Vegas Metrics

Below are the latest updates to our tracked Southern Nevada economic metrics. As always, feel free to share our graphs far and wide, and reach out to John Restrepo at jrestrepo@rcg1.com with questions.
stat highlights

positive

emp index
In May 2018 the RCG Employment Index’s 12-month moving average (“12MMA”) ticked up 0.1 points to 98.7, taking a step it had not made for 4 straight months and impelled by May’s impressive Las Vegas MSA job numbers. On a YOY basis the Index is up 0.5 points from April 2017. The Index is now just 1.3 points below the November 2006 peak of 100.
job growth
The 12MMA of Clark County’s headline unemployment rate was 5.1% in May, a drop of 0.1 points after 4 months straight of a stagnant unemployment rate. The unemployment rate is 0.5 points below last May’s 5.6%. It reached its lowest level over 11 years ago in October 2006 when it was just 4%. Southern Nevada is now theoretically at “full employment.” Strong federal job numbers had foreshadowed May’s decline in unemployment for the Las Vegas MSA.
In May the 12MMA rate of job growth in the Las Vegas MSA held at 2.6% for the 3rd consecutive month. The job growth rate has been on a downward trajectory since September 2015. Analysis by the Brookings Institution posits job growth at the regional and national levels has been suffering from the same effect: the slowdown is mainly due to decreasing demand for unskilled labor. However, the economy continues to strengthen, performing better than some analysts had predicted. While President Trump’s economic policy of deregulation and tax cuts, and his willingness to add to the deficit, may be sustaining the strength of national job growth in the short-term, there are consequences looming down the road. Also, it will take some time to see the full impact of the Administration’s threatened tariffs.
yoy construction
Construction in the Las Vegas MSA continues to be boosted by a strong housing market and improving commercial markets. In May 2018 the number of Southern Nevada construction workers rose by 4,917 (12MMA) from May 2017, an 8.7% increase. This was smaller than the previous month’s YOY increase of 9.3%. May’s gains put total construction jobs at 61,508. That makes 71 straight months (nearly 6 years) of construction job growth. Donald Trump’s decision to put tariffs on metals from the E.U., Canada and Mexico and industrial equipment from China, are likely to have an impact on Las Vegas’ construction industry.
In May 2018, construction jobs represented 6.2% of the region’s job-base, a drop of 0.4 points from the previous month and suggesting a construction worker shortage considering how much development is occurring in the region. During the real estate bubble of 2000-2007, construction jobs accounted for as much as an extraordinary 11.4% of all MSA jobs when construction jobs peaked at 108,833 in November 2006.
visitor volume
The Las Vegas MSA’s 12-month visitor count (annualized) in May 2018 was 42.1 million. The number of visitors to Clark County rose in May for the second consecutive month after 10 months of decline. The increase in May from the previous month was 0.8%. On a YOY basis, this was the 10th month in a row visitation has declined. Visitation in May was down -1.8% when compared to May 2017. We believe that the primary reasons for the slowdown are: limited room capacity, the strong dollar making vacationing in the US pricier for foreign visitors and move back to the longer trend rate of growth.
There were 42.2 million visitors to the Las Vegas MSA in 2017, compared to 42.9 million in 2016. So far through May, the visitor total is 17.5 million. That is lower than the same periods in 2016 (17.7 million) and 2017 (17.6 million), though if visitation continues to improve, we may see 2018 approach, or even surpass, the totals for each of the previous two years.
convention attendance
In May, Clark County’s annualized convention attendance saw a -0.39% decrease from the previous month, putting the annualized total at 6.5 million. May marks the 3rd annualized convention attendance decline in 5 months. However, when compared to May of 2017, convention attendance is still up 3.8%. The annualized peak of 6.65 million convention attendees occurred in December 2017.
Convention attendance saw significant gains in 2016 with 10 months above 10% YOY growth. Through all of 2017 the YOY rate of growth had fallen drastically to 3.9%. During the first 5 months of 2018 attendance grew by an average 4.9% YOY. Demand growth is being limited by maxed-out capacities at Las Vegas’ various convention facilities. 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, which will allow the city to host more conventioneers. The expansion is expected to be completed by 2022.
hotel rev per room
In May 2018, the 12MMA of hotel revenue per available room (RevPAR) in Clark County was $113.94, a gain of $0.53 (0.46%) from the previous month. However, when compared to May 2017, RevPAR is down $0.93 (-0.8%). This is the 3rd straight YOY decline in RevPAR after more than 7 consecutive years of growth. The RevPAR 12MMA peak of $119.43 occurred in December 2007. This a metric to definitely watch.
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 0.26% to $741.3 million in May. The streak of positive YOY growth was extended to 40 straight months with an increase of 2.7% from May 2017. May’s gaming revenues net of baccarat were nearly 89% of the October 2007 peak of $834.4 million.
The net baccarat revenues are largely comprised of slot revenues, which generally reflect wagering by 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 US household disposable income is finally rising in real terms.
home sales
Of the 5,030 total home sales in May, 4,197 were resales, while 834 were new home sales. According to Home Builders Research, in May, total (new and resales) Clark County home closings, on a 12MMA basis, were down -0.27% from the previous month.
On a YOY basis, May total home sales were 6.8% higher than May 2017. New home sales saw a YOY growth rate of 15% in May. Existing home sales are growing steadily with a YOY growth rate in May of 5.4%.
median home price
Per Home Builders Research, May’s 12MMA median home price (new and resale) was $259,369, a 1.2% gain over the previous month. Compared to May 2017, the price is up 13.7%, the highest YOY growth in weighted home price since October 2014. The YOY growth rate has been rising steadily for a full year. The current median home price remains well below the peak of $305,333, which was recorded over 11 years ago in February 2007. May’s estimate is now 85% of the peak price.
The median new home price was up 8.1% from the previous year, reaching a new peak in May of $356,040. The previous peak of $327,066 occurred in February 2007.
The median resale home price was $239,950 in May, a 14.5% jump during the last 12 months. The peak of $286,833 occurred more than 11 years ago in April 2007. The resale average has now recovered almost 84% of its pre-recession peak price.
The rate of home appreciation for new and resale homes, combined, continued its rising trend in May. YOY growth had dropped to 6.4% in December 2016 but rose steadily in the 2nd half of 2017, averaging 9.2% YOY growth over the last 6 months of the year. Through the first 5 months of 2018 the YOY growth rate average is 12.4%. 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 continues to climb. An increase of 0.06 points in June puts the rate at 4.16% (12MMA). This was the 5th increase in a row after 2 straight dips. The 12-year peak of 6.4% happened in October 2006. While the 30-year fixed rate mortgage should remain relatively low, it will likely go up because of Federal Reserve actions.
case shiller
The 12MMA Case-Shiller home price index for the Las Vegas MSA reached 169 in April 2018, a rise of 9.9% compared to April 2017. The Las Vegas index has risen for 68 straight months while its YOY growth rate has been growing steadily since March 2017. The US index in April was up 1.1 points, an increase of 6.2% compared to the previous year that puts the national index at 204.1. Both indexes have been on the rise since 2012.
The Las Vegas index peaked at 233.2 in December 2006. The latest LV index is 72% 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 mtg 3
As we end the first half of 2018, the 10-year U.S. Treasury climbed from 2.45% at the beginning of the year to 2.86% and the 30-day LIBOR moved from 1.56% to 2.10%. The Federal Reserve hiked its benchmark rate for the second time this year and have updated their 2018 forecast to four total increases. There were many potential market-moving events in June, including the continued trade war rhetoric from the President, the North Korean summit, and the renewed fear that Italy may exit the Eurozone. There was a short-lived flight to quality that briefly pushed the 10-year U.S. Treasury yield below the 3% threshold until it bottomed at approximately 2.80%.
Finally, the initial full year forecast for $75 billion of US CMBS issuance is on track with bond investors still favoring shorter duration.
taxable retail
Taxable retail sales continues to rise in Clark County with 0.65% growth in April compared to the previous month. On a YOY basis, growth was 3.6% from April 2017. We believe much of the dollar growth in taxable sales is due to healthy visitor spending numbers and strong construction activity. Another record high was reached in March with over $3.51 billion in sales on a 12MMA.
The consistent growth of taxable sales has given the local and state government more money to work with. The strength of the national economy and its local and regional markets are key to this improvement. Growing regional and national economies have driven Southern Nevada’s growth, benefiting all of its sectors. These larger economies are the primary drivers of visitors and convention attendance to Las Vegas, which is ultimately reflected in tourism spending in the region. We may now be witnessing the long-term trend rate for sales of around 3-4% per year.
taxable sales
The above chart displays Clark County taxable sales generated in a selected sample of what we are calling the “better known” (“BK”) activities. We hope this gives our readers an insight into the level of economic activity in familiar industries/sectors. Some of these sectors are not necessarily large generators of sales taxes, but we think our readers will find them interesting.
In April 2018, Retail made up 56.2% of taxable sales of the BK sectors and 53% of total sales. Compared to April 2017, Retail was up 0.02 percentage-points as a share of BK sectors. Accommodation & Food/Beverage, an important sector for Clark County, was the second largest (28.8% of BK sectors and 27.2% of total sales) in April. The Accommodation & Food/Beverage industry is down 0.5 points from April 2017’s 29.3% share of the BK group. Manufacturing came in at a distant 3rd place with 4.8% of the BK set, with Real Estate not far behind at 3.9%.
weekly earnings
The Las Vegas MSA’s 12MMA average weekly earnings (not inflation-adjusted) was up by $2, reaching $792 in June 2018. This growth trend began more than 3 ½ years ago in September 2014. On a YOY basis, the 12MMA was up $29 (3.9%) from June 2017.
When viewed on an inflation-adjusted basis, earnings grew slightly in June from the month prior, increasing by $1 to $671 (in 2007 dollars). YOY real earnings rose by 1.6% ($11) in June compared to June 2017. Moribund wage growth has received a lot of attention for some time by economists. It is partially a function of the growth of the “gig economy” plus ongoing automation trends.
Las Vegas’ average weekly real wage is now $80 (11%) below the most recent inflation-adjusted peak of $751 that occurred close to 11 years ago in August 2007. The trough occurred in February 2012 at just over $616, so Las Vegas remains closer to the trough than the peak.
weekly hours
The number of average weekly hours worked in Las Vegas (Clark County) on a 12MMA dropped to 33.9 in May 2018, erasing the 0.1 point gain made the previous month. This is the first decline since March 2016. Weekly hours had been plodding upward since June 2016. On a YOY basis, average weekly hours are up 0.4 hours from May 2017.
In Q1, 2018, the U-6 unemployment rate (including discouraged and part-time workers) recorded a 0.4-point drop. While this should suggest that business reliance on part-time workers continues to decrease, it very well might be that many of the new jobs being created are for part-time work.
Implication: Despite a 0.4 point-decrease in the U-6 unemployment rate in Q1, many companies continue to depend heavily on part-time workers and independent contractors. Despite what feels like a thriving economy and better than expected job numbers, employers may still feel reluctant to bring new employees in full-time, instead easing them into the company on a part-time basis. There is also the growth of the “gig economy” and widening automation. As a partial consequence, Nevada’s U-6 rate remains the nation’s 3rd highest at 10.4% as of Q1, 2018.
unleaded fuel
The price of gas in Las Vegas had been rising steadily for months but now appears to be on the decline. As of July 12, the price of regular unleaded gasoline in the Las Vegas MSA was $3.19, which is $0.12 (-3.6%) lower than a month ago. Still, when compared to a year ago, the price of unleaded is up $0.61.
Gas prices in LA-Long Beach are included in the chart because visitors from the region are a major driver of Las Vegas’ lodging and hospitality industry, specifically, and economy, generally. Rising gas prices could have a deleterious effect on tourist spending in Las Vegas this summer.
According to AAA, “Total crude oil stocks fell an astonishing 12.7 million bbl last week. The Energy Information Administration (EIA) has not recorded a decline of that size since October 2016. EIA data measures stocks at 405.2 million bbl, which are roughly 90 million bbl lower than they were at this time last year. This puts a continued spotlight on tightening U.S. supplies, which are likely to continue dropping as domestic demand for gasoline holds strong while crude and gasoline exports from the U.S. remain robust. If these trends continue amid high global crude demand, oil prices may continue riding high and contribute to increased pump prices throughout the summer and possibly into the fall. 
Pump prices in the West Coast region are among the most expensive in the country: Hawaii ($3.73), California ($3.66), Washington ($3.44), Alaska ($3.40), Oregon (3.32), Nevada ($3.24) and Arizona ($3.00). Most prices in the region have declined on the week, with Arizona (-2 cents) leading the group. 
Inventories of gasoline in the region fell for a third consecutive week, according to the Energy Information Administration’s (EIA) petroleum status report for the week ending on June 29. Dropping by nearly 150,000 bbl, total inventories now sit at 30.5 million bbl. However, inventories are approximately 2.2 million bbl higher than they were at this point last summer, which will likely help prices stabilize if there are any major supply disruptions in the region this week.”
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. After last month’s 0.4 point gain, the E-P Ratio for Clark County fell back down 0.2 points in May. Relative to May 2017, the E-P Ratio is down 0.4 points from 1.7.
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 for nearly 1 ½ years, since October 2016.
pot
Nevada excise tax revenues generated from marijuana sales through the first 9 months are $55.5 million, with the most recent recorded month, April 2018, seeing a -7.69% decline in revenue from the previous month. April brought in about $6.6 million in combined retail and wholesale taxes, compared to $7.1 million in March. The most readily available report by the Nevada Department of Taxation contains retail and wholesale excise taxes. These taxes do not include sales and use taxes paid at point of sales at the dispensaries or the annual licensing fees paid by the industry. The wholesale excise tax is collected at a 15% rate from growers to dispensaries on medicinal- and recreational-use marijuana, while the 10% retail excise tax is charged to only recreational users purchasing marijuana at a dispensary.
According to the Department, tax revenue from the sale of marijuana is expected to reach $120 million in the first 2 years. Collections over the first 10 months indicate that the Department’s forecast is right on track.