Nevada, nicknamed the Silver State due to the mineral’s historical importance to the state’s economy, has experienced a burst of growth in recent years. It added 62,000 people from 2017 to 2018, according to the U.S. Census Bureau, a growth rate of 2.1 percent that led the nation during that period and pushed Nevada’s population past 3 million.
Nevada might be best known for its “Sin City” reputation, but gambling was actually illegal in the state from 1910 to 1931. Nevada has a large military presence that includes Nellis Air Force Base and the mysterious Area 51, established in the 1950s by the Central Intelligence Agency. The federal government today owns about 85 percent of Nevada’s land.
The state’s key employment sectors include aerospace and defense, health care, information technology, mining and tourism, according to the Nevada Governor’s Office of Economic Development. Las Vegas has more than 150,000 hotel rooms and is home to one of the top hospitality degree programs in the nation at the University of Nevada, Las Vegas (UNLV). Mining employs more than 12,000 people statewide and the average annual salary in the industry is $83,000.
The Silver State was 34th in the 2018 U.S. News & World Report “Best States” rankings. Although its gross domestic product surpassed $146 billion, the state’s median household income of $55,180 in 2016 was less than the national median.
The percentage of Nevada residents who have earned bachelor’s degrees is 25 percent less than the national average, and Nevada ranks among the bottom half of states for health care, education, fiscal stability and quality of life, U.S. News & World Report said.
The migration of executive-level workers and wealthy families from other states, including neighboring California, is aiding Nevada’s housing market. Real estate brokers sold more than 2,220 homes in Clark County during January 2018, a 5.5 percent year-over-year increase during a seasonally slow month. Summerlin, a 22,500-acre master-planned community on the western edge of Las Vegas, is expected to grow to more than 80,000 homes and already includes 7 million square feet of office and retail space.
Sports also are boosting the economy as the Vegas Golden Knights hockey team reached the Stanley Cup Final in their first season; the NFL’s Oakland Raiders are relocating to Vegas in 2020; and a new $150 million stadium for the Las Vegas 51s minor-league baseball team is expected to be completed this year.
Home sales and prices
According to data from the Federal Housing Finance Agency, Nevada ranked fourth among all states and the District of Columbia in 2017 with year-over-year average purchase-price growth of 11.45 percent. Since 2013, the average home in the Silver State has appreciated more than 81 percent.
In Southern Nevada, the median purchase price for a single-family home hit $300,000 this past January, up 13.2 percent year over year. The area had a four-month supply of for-sale homes at that time and, although inventory had been rising for several months, it was still below the level indicative of a balanced market. To the north, the Reno/Sparks housing market saw a 22 percent year-over-year decline in single-family sales this past January, and the median sales price of $362,000 was up 0.6 percent over the previous year.
Nevada’s unemployment rate of 4.4 percent this past December matched the lowest figure the Silver State has seen since the pre-recession days, but it was still higher than the national average of 3.9 percent, the U.S. Bureau of Labor Statistics reported.
Labor stats showed that Nevada added jobs at a faster pace than any other state in 2017, however, with year-over-year growth of 3.3 percent. Growth is happening across all sectors, including professional and business services, health care, manufacturing, transportation and warehousing.
The state added more than 52,000 jobs from December 2017 to December 2018, the Nevada Department of Employment, Training and Rehabilitation stated. The employment growth rate of 5.2 percent in the Reno metro area was nearly triple the national average and 13 of the state’s 17 counties had declining unemployment rates during the same 12-month period.
Delinquencies and foreclosures
Nevada’s foreclosure rate of 0.6 percent was the ninth-highest in the nation in 2018, according to Attom Data Solutions. The number of defaults, auctions and real estate-owned properties in the Silver State has plummeted, however, since the Great Recession. There were 10,593 foreclosure events in Nevada in 2018, compared with more than 193,000 in 2009.
The state now has a permanent foreclosure-mediation program, which helped lower foreclosure filings in Las Vegas by 40 percent in 2017. The Greater Las Vegas Association of Realtors reported that distressed properties accounted for 2.9 percent of all home sales in the area this past December, compared to 3.6 percent in December 2017 and 11 percent in December 2016. Cash-only home purchases were down 3 percent year over year this past December, indicating fewer investors are active in the Las Vegas market.
What the locals say
“We were the top of every bad list that was out there. We had the largest equity drain of anywhere in the country. … We’ve kind of slowly rebuilt ourselves and we’re back to pretty aggressive appreciation rates — double digits over the last few years. That is obviously unsustainable — it never was going to be sustainable — so we’re kind of getting back to approaching a more normal seller’s market. It’s still a little bit of a seller’s market and we still have double-digit appreciation, but that’s going to get back to a more sustainable 6 to 8 percent [annually].”
President, Nevada Association of Realtors
3 Cities to Watch
It has served as the capital since Nevada became a state in 1864 and today is home to about 55,000 residents. Carson City has a diverse economy centered around services, retail trade, and state and local government. Western Nevada College, Carson Tahoe Health and global-technology company Chromalloy are among the largest employers. The city had job growth of 4.9 percent in 2017. The median home price is $337,000 and the cost of living is 6 percent above the national average.
“The Entertainment Capital of the World” boasts a metro-area population of more than 2.2 million. The median home price is $287,000. Home prices dropped 62 percent from 2006 to 2012, according to Attom Data Solutions, and Las Vegas had the highest foreclosure rate in the nation at one point, but the city has since rebounded. UNLV’s medical school is estimated to add 8,000 jobs and $1.2 billion annually to the city’s economy by 2030, Reuters reported.
“The Biggest Little City in the World” is no longer so little, with 10 percent growth from 2010 to 2017 pushing its population close to 250,000. The Sierra Nevada mountains and Lake Tahoe are among many nearby recreational venues, and the city is home to many geothermal companies and advanced manufacturers. The University of Nevada’s flagship campus, with an enrollment of more than 21,000 students, includes one of the largest earthquake-simulation labs in the U.S.
Sources: Attom Data Solutions, Carson City Chamber of Commerce, City of Reno, Federal Housing Finance Agency, Forbes, History.com, Las Vegas Review-Journal, Nevada Business Magazine, Nevada Department of Employment, Training and Rehabilitation, Nevada Governor’s Office of Economic Development, Reno/Sparks Association of Realtors, Reuters, The Howard Hughes Corp., U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. News & World Report