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Top 10 Southern Nevada Economic Trends To Watch

Today I met with Brian Gordon of Applied Analysis and we discussed the economic outlook of Southern Nevada. Here are the top 10 trends to watch

10: Business Tax Climate – Nevada is ranked the 5th best state to have a business in, the best state in terms of individual income tax ranking, and 8th in terms of property tax ranking.

9: Professional Sports – Vegas has quickly become a professional sports town. The massive success of the Vegas Golden Knights in their inaugural season has provided the proof that professional sports in Vegas isn’t only possible, but it will flourish. Vegas also has the Las Vegas Aces (WNBA), Las Vegas 51s (Minor League Baseball), and the Las Vegas Lights (USL). Soon we’ll have the Raiders (NFL). Aside from the fixed professional teams, Vegas is also home to numerous individual sporting events including multiple NASCAR races, exhibition NBA and college basketball games, PBR, and many more. Finally, Vegas is also the home of the fastest growing sport on the planet ,UFC. Most importantly Vegas has the infrastructure to handle this now and into the future. Vegas is a sports town!

8: Commercial Real Estate – Vacancy rates across the board are going down. There are more scheduled industrial building now than ever. North Las Vegas in particular is attracting large companies, most notably Amazon and their distribution warehouse expansion.

7: Tourism Industry – McCarran International Airport is having record high traffic and passengers pass through daily. 50 million people per year go through it making it the 8th busiest airport in the US, but more impressively it’s the 2nd busiest airport in terms of origination and destination passengers. Convention attendance is also at an all time high. There is currently 11.4 million square feet of convention space, and it will increase another 3 million in the next few years.

6: Construction Industry – This is the fastest growing sector in the Southern NV economy, growing at 8.7% annually. 6.2% of our workforce is construction (4.9% is the national average). Annual growth in weekly wages is 8.1%.

5: Population Growth – At +2.0% net, Nevada has the 2nd fastest population growth of any state. This is also double the national average. Southern Nevada gains 43,180 residents and 16,000 households per year. That’s +118 per day and +4.9 per hour! 1/3 of all these people are moving from California. The current population of Clark County is 2,200,000.

4: Housing Market Trends – New homes prices have reached a record high due to a combination of factors. These factors include labor costs and shortages, land costs and shortages, development costs, increase in average size, and more amenities. These new homes are being built mainly on the perimeter of the valley in areas like Inspirada, Anthem, Mountain’s Edge, and Summerlin. Comparing new homes to resale, the new homes have a higher average size and price ($377,000), and the resale’s have a smaller average size and price ($259,000).

3: Housing Affordability – Mortgage rates are rising, but are still near historic lows. Current rate averages are 4.1% for a 15 year and 4.6% for a 30 year. Currently the ratio of home price to income is at 3.75%.

2: Employment Growth – This is the #1 reason people are moving to Nevada. Nevada is also the highest ranked state for employment growth at +3.3% year over year. The Greater Las Vegas market also has its highest employee count ever – 1,000,000 employed. Finally, we have also seen 87 months of consecutive positive year over year growth.

1: Major Investments – Billions of dollars are pouring into the Greater Las Vegas area. Some of the most prominent projects include – Resorts World, Wynn Paradise Park, the Las Vegas Convention Center expansion, Downtown Las Vegas Expo Center, a billion dollar investment by Switch, the Las Vegas Monorail expansion, Project Neon, the Palms renovation, Caesars Forum Conference Center, Aristocrat Technology Campus, The Drew (formerly knows as Fontainebleau), numerous convention centers, MSG Sphere, and much, much more.

Conclusion – contrary to the constant negative news, Nevada, especially Clark County, has never been stronger or more economically sound. Trepidation is to be expected after so many were hurt after the financial collapse of 2007-2008, but the catalysts that initiated that meltdown are not present today. All underlying economic data is very robust. Las Vegas is poised for massive growth and expansion well into the future!

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