As one of the states hardest hit by the Great Recession, Nevada’s economy has largely recovered over the past few years. In 2016 and 2017, the state ranked behind just Idaho and Utah in population growth, U.S. Census Bureau data suggests. Nevada’s population grew by about 2.1 percent — or about 62,000 people — in the 12-month period that ended in June 2018, surpassing the 3 million population milestone last year, the Las Vegas Review-Journal reported.
Nevada is the seventh-largest state with an area of 110,567 square miles, but ranked just 32nd in terms of population in 2018, according to the World Population Review.
The Las Vegas metro area had one of the hottest housing markets in the country last year. Home prices rose 11.6 percent annually this past January, according to Zillow. As of the same month, the median home price in Las Vegas hit $277,000, more than double the post-recession low set in 2012, the Home Buying Institute reported.
Nevada’s dominant tourism and gaming industries had a solid year in 2018. In the 11 months through November of 2018, gaming revenues statewide were up 2.9 percent annually, according to CDC Gaming Reports. And McCarran International Airport had the busiest November in its history last year with an estimated 4.1 million travelers, the ninth consecutive month in which passenger counts exceeded 4 million, CDC Gaming Reports reported.
Las Vegas, once known only for the Strip, has grown up as a city. In 2017, the National Hockey League’s Vegas Golden Knights debuted in the desert. Construction also is underway on a $1.8 billion football stadium, which will be the new home to the NFL’s Raiders starting in the 2020 season.
Although gaming-centered tourism remained Nevada’s largest private employer, the state’s abundant minerals and precious metals have made mining a major industry for more than 150 years. Nevada produces roughly 75 percent of the gold mined in the U.S. and is the No. 1 producer of silver. Mining directly employs more than 12,000 people in the state. And an important hub for the aerospace and defense industries has sprouted around Nellis Air Force Base in the Las Vegas valley.
Given the growth around Las Vegas, analysts at Cushman & Wakefield and Colliers International were projecting solid and steady growth in rents and occupancy rates for commercial real estate, as well as robust sales activity. Significant ongoing construction is predicted to support retail and other commercial projects, including expansion of the Las Vegas Convention Center and new downtown parking garages.
Las Vegas office market
The Las Vegas office market was stable last year, according to a fourth-quarter 2018 report from commercial real estate service company Avison Young. The overall vacancy rate fell slightly to 11.3 percent. There were an estimated 238 office leases in the past fourth quarter, compared to 358 leases in fourth-quarter 2017, Avison Young said.
An estimated 91 office sales were completed in fourth-quarter 2018, down from 118 in fourth-quarter 2017. Most sales involved properties of less than 40,000 square feet and the majority of leases were for less than 10,000 square feet, Avison Young said.
Among property types, medical-office buildings stood out, with 23 sales and 22 leases in the past fourth quarter. The largest medical-office sale was for $9.1 million and involved the 30,172-square-foot Colonial Gatewood Office, Avison Young said.
Nevada is best known for the opulent resorts along the Las Vegas Strip, a roughly 4.2-mile stretch just south of the city proper that is home to about 30 major hotels. Gaming revenues were up 3 percent statewide in 2018 compared to 2017, generating nearly $12 billion in revenue in 2018, the Nevada Gaming Control Board reported. It was the fourth consecutive year revenues have risen and the third-largest total in state history.
The Las Vegas Strip produced more than half of all revenue, or $6.56 billion. Gaming revenue from Southern Nevada’s Clark County, which includes the Strip and downtown Las Vegas, comprised $10.25 billion of the total statewide take. Reno, the state’s other major gaming center in Northern Nevada’s Washoe County, saw revenue rise by 4.1 percent to $636.9 million, the highest production from Reno’s gaming companies since 2008, according to CDC Gaming Reports.
The Great Recession hit Nevada especially hard. The unemployment rate soared to 13.7 percent in September 2010 and remained in the double digits until the spring of 2013, according to U.S. Department of Labor data. By 2017, however, the Silver State was adding jobs at the fastest rate in the nation, the Las Vegas Review-Journal reported in February 2018.
Led by gains in gaming-related jobs, manufacturing and logistics, the state’s unemployment rate remained at a nearly 12-year low of 4.4 percent for the third consecutive month in December 2018, only slightly higher than the national average of 3.9 percent for that month, labor statistics show. Nevada’s annual median wage has been rising, but its figure of $56,550 as of 2017 was still in the bottom 20 percent of all states, according to the Federal Reserve Bank of St. Louis.
What the locals say
“Our population is definitely expanding. We still are an affordable place to live and we are a tax- free state, so that obviously helps in overall income. The development of these sports teams, like the Vegas Golden Knights and now the Raiders coming, is changing the perception that companies have of being in Las Vegas. They are starting to see us as a real and more traditional community, not just a gaming mecca. … Las Vegas has finally built some very large industrial-distribution properties, and they are leasing up and selling quickly. That has been a huge add to the community and has also helped with the jobs quite a bit.”
President, Commercial Alliance Las Vegas
3 Cities to Watch
Known as “The Biggest Little City in the World,” Reno remains the state’s second most-popular gambling center with more than 20 casinos. International Game Technology, the world’s largest producer of slot machines, is also now headquartered in Reno, Bloomberg reports. The metro area spans two counties with a population exceeding 450,000, making it Nevada’s largest population center outside of Las Vegas, according to DataUSA. Reno is less than an hour’s drive from Lake Tahoe.
Originally settled in the 1840s, Carson City has been the state capital since Nevada gained statehood in 1864 during the Civil War. Named after the mountain man Kit Carson, it became a trading center after silver was discovered in the nearby hills a decade later, sparking the nation’s first silver rush. In 2018, Forbes ranked Carson City No. 98 on its list of best small places for business and careers. The city has one of the most diversified economies in Nevada with more than 1,800 businesses, according to the Carson City Chamber of Commerce.
Located in northeastern Nevada, Elko was first inhabited in 1868 when the Central Pacific Railway laid down tracks for a portion of the First Continental Railway. Last summer, Elko’s unemployment rate dipped to 2.9 percent and mining companies were facing a hiring crunch, the Elko Daily Free Press reported. The metro-area population of Elko comprises roughly 54,000 people, according to the Statistical Atlas. There were five active gold mines in Elko County as of 2016 and they produced more than 1.4 million ounces of gold in that year.
Sources: Avison Young, Bloomberg, Carson City Chamber of Commerce, CDC Gaming Reports, DataUSA, Elko Daily Free Press, Federal Reserve Bank of St. Louis, Home Buying Review, Las Vegas Review-Journal, Nevada Gaming Control Board, Nevada Governor’s Office of Economic Development, Statistical Atlas, U.S. Census Bureau, U.S. Department of Labor, Wikipedia, World Population Review, Zillow.