The LV Review Journal came out today with an article that describes the fundamentals of the market as still strong although the prices have been hammered with a drop of the median property price of more than $30,000. That is significant. No one can still if we have seen the end of the price declines, but in my opinion we are not far.
This graph says it all, but keep on reading the article is worth it:
Here is what the Review Journal had to say:
Slump? Not here. Local economic index hits record
Higher gambling win, taxable sales help fuel February jump in university's monthly gauge
Despite recessionary trends in the national economy, the Southern Nevada Index of Leading Economic Indicators reached a record high of 133.93 in February, though more data series showed declines than increases.
The index, compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, is up from 133.56 in January and 132.79 in the same month a year ago. Its baseline of 100 was established in 1985.
Only three series made a positive contribution to the index, but they carry relatively larger weights than the declining series, said Keith Schwer, director of the research center.
"Wait until next month," he said. "With new information, that (index) could go down. It may well be that we're looking at the peak, but we don't know."
Gross gaming revenue for Clark County grew 4.1 percent in December, the month of data used for February's index, to about $946 million. It's the largest contributor to the upward movement in the index and more than made up for a weak November.
Visitor volume was up 0.71 percent to 3.08 million and taxable sales increased 1.34 percent to $3.49 billion.
Overall, the economic index continues to track along a flat course, suggesting a short-term outlook at or near current conditions over the first half of the year, Schwer said.
Furthermore, the recent path of the index points to "continued vulnerability" of the Southern Nevada economy to further weakening of the U.S. economy, he said.
The economic index is a six-month forecast from the month of the data, based on a net-weighted average of each series after adjustments 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.
Neil Durkee, business development director for Matt Construction in Las Vegas, said financing has tightened for construction projects, particularly some of the condominium projects that have recently fallen into bankruptcy or halted work.
"Very honestly, the thing we see that's drying up major construction is lack of financing available for major projects," he said. "Money is difficult to find."
Nevertheless, Matt is doing preconstruction analysis for the Lady Luck in downtown Las Vegas that could see renovation work begin in October or November and for the World Jewelry Center that will be coming out of the ground in 2009, Durkee said.
The center's Clark County Tourism Index showed some improvement in December, though higher fuel prices and higher load factors for airlines continue to constrain visitor volume, Schwer said.
The Las Vegas Convention and Visitors Authority reported 39.2 million visitors in 2007, a 0.7 percent increase from 38.9 million in 2006. Hotel occupancy remained strong at 90.4 percent.
With the drop in the value of the U.S. dollar and appreciation of foreign currencies such as the euro, Las Vegas is getting a fairly high percentage of people coming from outside the United States, Schwer said.
"That tends to soften the downturn because you get people who might not have otherwise come," he said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.
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