Housing described as valley’s top issue

Without a doubt, the biggest issue facing Southern Nevada this year will be the housing market and foreclosure crises, a local research analyst said Thursday at Preview Las Vegas 2008.

Jeremy Aguero, principal of Applied Analysis, said more than half of the 25,000 homes listed for sale in Las Vegas are vacant and 60 percent of homes in foreclosure are not owner-occupied. Most of them are owned by someone out of state.

Housing stability was one of 10 issues on Aguero's "watch" list, which is much the same as last year, except the numbers have changed, he said.

Population and employment growth have slowed and so has consumer spending, creating a $500 million budget deficit in Nevada. Concerns about the state's tax climate went from No. 10 on the list last year to No. 4 in 2008.

"There's nobody here who isn't concerned about education and transportation," Aguero told about 2,000 business leaders attending Preview at Cox Pavilion. "How do we talk about education and transportation unless we get to a point of fiscal responsibility in Carson City and local government?"

Like someone who works on commission, the state should think about putting away money during the good years when sales and gaming taxes are above projections to make up for a shortfall during the down years, Aguero said.

Employment growth, once the shining star of Southern Nevada's economy, has not only slowed from a nation-leading 5 percent, but some indications are that it may have already turned negative, he said.

Las Vegas experienced a peak in job growth during each wave of major resort development in the past, followed by a steep decline. We're in a valley right now, but with 40,000 rooms in the pipeline, another peak is on its way, Aguero said.

Because it has diversified from gaming and tourism, Las Vegas is no longer immune to U.S. recessional trends, he said. Only one in 10 new jobs is in hotel and gaming, Aguero noted.

A lot of people want to "pigeonhole" the increase in jobless claims to the construction industry, particularly the residential side, where some 15,000 workers have been laid off. Right now, professional and business services are losing jobs at the highest rate, followed by trades, transportation and utilities.

"I'd love to say the worst is over, but realistically, things are going to get worse before it gets better," he said. "If employment growth isn't there, what happens to the rest of it?"

But despite reports to the contrary, he said, the sky is not falling in Las Vegas.

The media have reported doom stories about Las Vegas for 100 years. Aguero posted headlines and news clips from several newspapers, starting in 1905 with the Los Angeles Times headline, "Boom Town Expired with Sob and Groan," and the New York Times in 1931, "Gambling Loses Lure at Western Casinos." In 1950, Time magazine's "Snake Eyes in Las Vegas" article said part of the problem is there's not enough "suckers" for casinos in Las Vegas. In 1983, the Chicago Tribune said, "Vegas Casinos Running out of Luck."

"We could go through these all day long," Aguero said. "We have been here before."

Richard Lee, vice president and director of public relations for First American Title Co. of Nevada, said it's time for a "reality check."

He said the pie is getting bigger in Las Vegas with all of the resorts under construction on the Strip, Plaza Las Vegas and M Resort on the horizon in 2009 and development of Union Park downtown.

"It's good to be in Las Vegas? How many people still feel that way?" Lee asked. Most of the audience responded positively. "Even though we've got $30 billion in global investment, I read the headlines and I feel bad. They're beating us up."

The Las Vegas Chamber of Commerce and the Nevada Development Authority sponsored the meeting.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.