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Most of us know a friend or neighbor, family member or co-worker who has felt the impact of the slow housing market in the state, but according to experts, the state’s housing market is looking up.
Nevada was hit hard by the recession that started in 2007. Job growth slowed, housing sales dried up and property values decreased, often creating “underwater mortgages” where the home owner owes more than the home is worth.
This led to high foreclosure rates in Nevada, and while the foreclosure rate has dipped, VegasInc.com reports, 1“[Nevada is] in the top 10 of America’s worst-hit states. Nevada had the fifth-highest foreclosure rate in the country as recently as last September, with 1 in 496 Nevada homes in foreclosure…”
Nevada Was a Growth Leader…Until the Crash
Dr. Stephen P. A. Brown, PhD, is a professor of economics, and the Director of the Center of Business and Economic Research at the Lee School of Business at the University of Nevada, Las Vegas.
In a recent report, Brown wrote, “Being among the laggards is an unfamiliar position for the Nevada economy. Long-term trends have favored the Nevada economy since World War II. As part of the West, Nevada saw the strongest population growth of any state from 1950 to 2007. Its employment saw the highest growth rate in the expansion prior to the most recent recession.”
When financial markets started to tumble in 2007, Nevada was hit hard. However, according to Brown, things may be looking up for the state’s economy, with housing starts a leading indicator of an improving economy.
During a recent interview, Brown pointed out that “Housing permits in 2012 increased 45% to 7,400 in Clark County, and 40% statewide, for a total of around 8,500 housing permits.” To put these numbers in perspective, Brown continued, “Clark County, from 2004 to 2007, issued 3,200 housing permits per month”.
Seeing an increase of 40% in building across the state is an indicator that: (1) the state’s housing market is on the rebound; and (2) the state’s general economy is improving based on the number of new homes permitted last year.
For 2013, Brown predicts an increase of 22.5% for Clark County in new housing permits (to around 9,065) and a 20.5% increase for Nevada overall in new housing permits (to around 10,243).
Has the Nevada Housing Market Hit Bottom?
Other experts indicate steady growth in the housing arena, suggesting that Nevada’s residential homes market has finally bottomed out.
Brian Bonnenfant is the Project Manager at the Center for Regional Studies at the University of Nevada, Reno. His organization recently reported that, “New single family permits last year in the Reno MSA (Metropolitan Statistical Area) were between 500 and 600. They will likely increase this year to between 600 and 700 new single family permits.”
Bonnenfant also points out the possibility of a housing shortage in Nevada. “There is a potential housing crisis this year in Nevada. If California Baby Boomers move to Nevada because of lower taxes, there could be a housing shortage.”
The vacancy rate for apartments is less than 5%, according to Bonnenfant, and the rental market is seeing sustained, high levels of activity.
In 2013, experts expect to see steady growth in new housing starts, and more out-of-state retirees moving to Nevada, a low-tax state. Some of these new residents will buy a home; others will rent, but in either case, with an improving economy, the housing market in Nevada seems to have turned around in 2012, with experts agreeing that steady growth is ahead for 2013.
SEE THE FULL ARTICLE HERE: https://blog.nsbank.com/steady-growth-for-nevadas-housing-marketing-in-2013/
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