Indications are housing slip dragging on local economy - Business

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Sep. 08, 2007
Copyright © Las Vegas Review-Journal

Indications are housing slip dragging on local economy

By HUBBLE SMITH
REVIEW-JOURNAL

Click image for enlargement.Mike Johnson.

Southern Nevada's economy, dragged down by the slumping housing industry, posted another month of modest performance.

New and existing home sales dropped 40 percent and new home permits are off by 45 percent, contributing to a 0.11 percent decline in the Southern Nevada Index of Leading Economic Indicators.

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The index, compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, stood at 133.18 in August, compared with 133.24 the previous month. It is up from 132.26 in August 2006.

Seven of the data series were negative. The positive indicators were passengers at McCarran International Airport, visitor volume and gallons of gasoline sold.

"One thing we're seeing is a mass movement to liquidity that has caused the Fed and central banks to be concerned," economist and research center director Keith Schwer said. "That carries the news, but the real side of the economy is that it's relatively flat. We're not in a recession, though we've seen a year of residential decline."

In short, the index has tracked along a flat pattern for the past month or so with small percentage changes, he said.

The economic index, compiled by the center, is a six-month forecast from the month of the data (June), based on a net-weighted average of each series after adjustment for seasonal variation.

The accompanying Review-Journal chart includes several of the index's categories, along with data such as new residents and employment and housing numbers, updated for the most recent month for which figures are available.

The number of new residents moving to Las Vegas dropped by double-digit figures for the third consecutive month, to 6,168 in July.

Seeing all the vacant homes, Andrew Pugh of SellFastLV.com wonders how many people are leaving Las Vegas, though he's certain more people are coming than going.

"It's just unfortunate we can't nail down the historical numbers and really figure out if the current numbers are changing significantly," he said. "My contention is that the lack of white-collar jobs and relatively high housing costs would eventually slow down the migration, but without good data, it's hard to know for sure. Affordable housing was one of the big draws and now that's pretty much gone, for now."

Schwer said construction employment, which accounts for 17 percent of Southern Nevada's work force of 943,200, has remained flat as commercial construction picked up slack from residential.

"If all of these cranes are still operating in a year, we will have done very well going through a sharp downturn," he said. "We're going to have to starting hiring in 2008 for the expansion in '09."

Nonresidential construction shrugged off the turmoil in home building and credit markets in July to post another solid gain, Associated General Contractors of America chief economist Ken Simonson said.

Although construction spend- ing slipped 0.4 percent in July and residential fell 1.4 percent, nonresidential spending climbed 0.6 percent, the 10th consecutive monthly gain.

For the first seven months of 2007, total construction was down 3.4 percent and residential plummeted 18 percent compared to the same period in 2006. Those figures obscure the 15 percent jump in nonresidential spending, Simonson said.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. tashawna e. solomon wrote on September 10, 2009 11:35 AM: send me a houseing apoint ment Bubble Believer wrote on September 08, 2007 05:46 PM: Realtors are a waste of human flesh. Keith Schwer wrote on September 08, 2007 09:28 AM: Schwer said construction employment, which accounts for 17 percent of Southern Nevada's work force of 943,200, has remained flat as commercial construction picked up slack from residential. Should read 11 percent Patrick wrote on September 08, 2007 09:15 AM: TO J, You must be in the real estate business. Nice to see you can read and write a complete sentence. Patrick wrote on September 08, 2007 09:14 AM: TO J, You must be in the real estate business. Nice to see you can read and write a complete sentence. Patrick wrote on September 08, 2007 09:12 AM: Jennifer, threatened and lied to us when she could not close on buying our house on time. Jillian, Screwed around on her husband to close real estate deals. Steve, wanted to list our house for 230K when the comps were 270k. This was in 5/04 Cheryl, I could go on forever. Nice to see her house is presently in foreclosure. Paul, Would make rude comments about his wife in front of us while she was not there. Also doesn't know how to turn off his cell phone when talking negitively about a client or his Pastor. Ronald, Did not sell our home made up excuses why he couldn't sell our home. We sold it ourselves. J wrote on September 08, 2007 08:28 AM: Patrick, get a life and take your off-topic BS elsewhere. Don wrote on September 08, 2007 07:22 AM: Patrick, How do you really feel? patrick wrote on September 08, 2007 07:13 AM: Another newspaper article about the local real estate market? I want to see an article about the lack of ethics our local realtors have. I personally know of several realtors I hope to never see again. Jennifer, Jillian, Steve, Cheryl, Paul, Ronald. I mean these six individuals would eat their closest family members for a few dollars. Three of the above named A$$ Holes I have reported to the GLVARTo the above mentioned people I am happy yo see at least two of you have homes presently in foreclosure. Whiskey Tango Foxtrot wrote on September 08, 2007 03:29 AM: It's surprising that the housing slump is dragging down our economy? I wonder where these "experts" were when the value of homes ended up artificially inflated? The only surprise is that it took so long for the over-priced garbage that home developers have been pushing on people finally has bitten the developers in the butt...not to mention the "creative financing" that is now becoming responsible for the foreclosures currently on the books.