The final count is still coming in, but the MLS already reports 3132 closed sales for the month of September in Las Vegas. That will easily break the July record. What’s also impressive here is that we are now getting closings where the sale took place in Las Vegas’ hot summer months as opposed to its balmy spring months. You don’t usually see sales strengthen from spring to summer.
Upbeat article about Las Vegas in yesterday’s USA Today
Brian Wargo’s “Condo Market Still Down” in this week’s In Business Las Vegas seriously misleads and misinforms. It states
The mid-rise market remains weak…Three units were sold during the second quarter compared with four in the first quarter.
This is absurdly wrong. Manhattan Condominiums alone closed 9 resale units in Q2, and Park Avenue closed 11. Something had to be wrong here, so I contacted John Restrepo, who provided IBLV with the information. Restrepo said that he was only counting mid-rise units “above $350 per square foot”.
So we have two big wrong things here. The first wrongness is in even having such a category. Not only is $350 per square foot a completely arbitrary measure, making any report about mid-rise units at that price point is going to be misleading. Hardly any mid-rise units in Las Vegas sell at that point.
The second wrong thing is when IBLV blithely prints this information and ascribes it to the entire market. This makes things seem much worse than they are.
I never cease to be amazed at the media’s fetishistic focus on high-rise buildings. The represent such a small portion of the Las Vegas market, and they are so irrelevant to most of the population.
Glass Half-Full Analysis on the latest Economic Indicators
New Resident Count: Down to 4,612, but it’s still pretty powerful to have nearly 5000 new residents showing up each month.
Total employment: Down less than 5000 from a year ago. In a city with one million jobs, the fact that despite all of the downturn in construction, lending, title, and mortgage, employment is only down 5000 jobs is quite a testament to the underlying growth power of the Las Vegas Region.
New home permits: Down 57%. Remember: this is a good thing. Fewer home permits mean we work through the inventory overhang faster.
Existing Home Sales: Up slightly from last year. There is hardly any other place in the country that sold more homes in May 2008 than they sold in May 2007. Vegas pulled it off because we’re going through a recovery.
The LVRJ touted rising unemployment this morning. A couple of points to emphasize:
This number includes students and teachers looking for summer work. They always cause an unemployment spike in May. The paper notes:
What’s more, high-school students, college graduates and teachers looking for summer work hit the labor market in May, swelling the ranks of job hunters even as the retail, construction and hospitality posts such population segments typically take failed to materialize.
Another thing that no one in the media is mentioning. Look at the Total Labor Force:
In JUST ONE YEAR, Las Vegas has ADDED 46,000 jobs to the labor force. In other words, for every person that became unemployed, 2 and a half jobs were created. How can that happen? Massive immigration. We have temporarily stopped providing enough jobs for all the newcomers, like the cook mentioned in this article. That will end soon enough. Consider the posting I just made about Encore. The 5,300 jobs from that one hotel in that one company will soak up about a third of all of the unemployment created in the last 12 months. And City Center is only about 6 months away from hiring 12,000 more people.
It’s becoming increasingly difficult to ignore all of the good news about the Las Vegas housing market. Brian Wargo writes:
May home sales are up 29 percent over May 2007 and prices increase[d] fo the first time since last summer…
He also notes that May sales were 13% higher than April sales, and mentions what almost no one has picked up on: median price of homes in May was higher than in April. I.e. Prices in Las Vegas are going up.
May marks the fifth straight month sales have been higher than the month before…
The article isn’t 100% accurate though. Wargo republishes the highly misleading GLVAR inventory numbers that include units in contract as “inventory”. We’ve talked at length about how wrong this is.