How is the economy "on the ground" in Vegas lately?

I was wondering if some of the locals could give an update of what the economy is like "on the ground" in Las Vegas lately. Not the kind of stuff that I can look up stat-wise, but what is the general mood; are strip-malls half-empty; that kind of thing.

Reason I ask is we just got a relocation to our office from sol-cal. When asked the "why did you come here?" that every transfer gets, she said both she just wanted to relocate and see a different part of the USA for awhile (I did that) but she said that the economy there is simply terrible, unemployment at least feeling much higher than it really is, etc. From the tone in her voice you would think she just escaped from the east bloc. Well, not quite that bad, but it made me want to ask the question here to the Vegas locals.

Not that I am a Vegas local, I am not, but I would tend to think that the long term model for Vegas should be fairly sustainable. They have money flowing into that town from all over the world due to the vibrant tourism industry there. I do know that they have been for years targeting businesses to move there from California's hostile business climate, not to mention California's overtime laws, though I do not pretend to know how successful this has been.

Well, 3000 small businesses closed in N Vegas in the last
4 years, the majority since 2009. N Vegas is now almost
bankrupt. Property values in Clark Co continue to plummet,
the city isn't growing, how good can business be in Vegas.

From the Las Vegas Sun in Ap:

Marcus & Millichap, a national commercial real estate brokerage and advisory firm, issued its annual National Office Report, and for the second consecutive year, Las Vegas ranked last among the 44 markets ranked.

Las Vegas office building market will continue to struggle with a sky-high office vacancy rate of 25.3 percent (a result of the slowdown and overbuilding during the boom years).

Separately, the Urban Land Institute and accounting firm PwC issued their annual Emerging Trends in Real Estate report, and, again, Las Vegas ranked at or near the bottom in all the categories it was ranked.

Las Vegas ranked No. 50, ahead of only Detroit, in the category of for-sale homebuilding prospects.

In rankings of investment prospects by population, Las Vegas was No. 18 among 18 metro areas ranked with populations of 2 million or less.

The bottom line in this report is that Las Vegas is one of the metro areas with "generally poor" investment prospects.

The Conference Board reported that Las Vegas is among the metro areas with the greatest supply/demand imbalances when it comes to jobs.
In January, Las Vegas had 4.47 unemployed people for every job that was advertised online compared with the national average of three unemployed per vacancy.

Quote: EvenBob

Well, 3000 small businesses closed in N Vegas in the last
4 years, the majority since 2009.

How many opened? Is that a net number? What is the normal turn-over rate, given that most small businesses fail in any economy?

edit: given that North Las Vegas has a population of 225,000, your number is 1 small business for every 75 citizens. That's a HUGE number of businesses to exist, let alone fail, isn't it?

Quote: rdw4potus

How many opened? Is that a net number? What is the normal turn-over rate, given that most small businesses fail in any economy?
edit: given that North Las Vegas has a population of 225,000, your number is 1 small business for every 75 citizens. That's a HUGE number of businesses to exist, let alone fail, isn't it?

This was covered extensively a couple weeks ago when N Vegas
declared itself a disaster area. Most of the construction workers
who lived the area lived in N Vegas. When they made their
mass exodus from the scene, 3000 small businesses followed
shortly thereafter. Now the city is broke and can't pay their
employee's, hence the disaster area declaration.

Quote: rdw4potus

How many opened? Is that a net number? What is the normal turn-over rate, given that most small businesses fail in any economy?

From the Las Vegas Review 10 days ago:

"As we are reminded too often, Clark County continues to lead the nation
in home foreclosures and is at the top in unemployment - two critical
factors that have had a devastating effect on the Valley's economy. I
would submit that North Las Vegas has suffered the most. When the
housing bubble burst, North Las Vegas felt it exponentially harder than
the rest of the Valley as it rested on top of a relatively narrow economic-base."

The narrow economic base was the construction workers
who lived there and the small businesses who catered
to them. Ironically, this happens eventually to all boom
towns, the labor force leaves and are soon followed by
by all the businesses that served them.

Quote: EvenBob

Most of the construction workers
who lived the area lived in N Vegas. When they made their
mass exodus from the scene, 3000 small businesses followed
shortly thereafter.

I suspect that 3000 construction workers is approximately equal to 3000 small businesses. If I attempt to be a construction subcontractor and I fail, pretty much nobody cares. I just become part of an asinine statistic.

Quote: rdw4potus

edit: given that North Las Vegas has a population of 225,000, your number is 1 small business for every 75 citizens. That's a HUGE number of businesses to exist, let alone fail, isn't it?

Not really, nationwide there is a small business without payroll for every 14.5 people. There is a small business with a payroll for 1 in 52 people. I suspect that the number in North Las Vegas includes many businesses without payrolls.

Quote: pacomartin

Not really, nationwide there is a small business without payroll for every 14.5 people. There is a small business with a payroll for 1 in 52 people. I suspect that the number in North Las Vegas includes many businesses without payrolls.

When I was in the bar business, the standard was a bar
could be profitable with just 20 regular customers. We had
at least 50, and many non regular customers. Most people
don't realize that it takes very few regular customers to
make some businesses profitable.

Pizza joints are a good example. It costs very little to make
that $18 pie you just bought.

Quote: EvenBob

Most people don't realize that it takes very few regular customers to make some businesses profitable.
Pizza joints are a good example. It costs very little to make that $18 pie you just bought.

And it costs very little for someone to open up a pizza place right next door to you and charge under 18 for it.

Recent statement from some Local Vegas Oral History article in Vegas Seven:

"All you need to do is look down on the Strip and say, Are they building something? Is it tall? Will it have a lot of people working there? Right now, if they started a couple more of those casinos, that’d be greatly helpful."
I guess some people just don't realize that the existing casinos are not doing so well and ain't nobody gonna start building a new casino to bail out the real estate industry. Someone tried to build a hotel to help the casino industry: The Harman. Its due for forensic demolition soon.

The Zillow "home value index" for Las Vegas is up 2.9% the Q1 of 2012. Just the buzz on street is that prices are on the rise. I think the jump will be higher for Q2, whenever those figures come out. The tough part is getting financing, as the banks are ultra-tight with their money right now.

I can only give anecdotal evidence, as I really don't care how the economy is doing here. People will always need trash bags, and that is my game.

That being said, last time I was home, I couldn't find a parking spot at Wal-Mart or Sam's. Target was the same thing. We went to eat at the South Point and had to wait an hour in line. We also went to eat at a restaurant in the GV area, again, an hour wait. Went to the rained out 51's game. They announced 8500 in attendance. Perhaps it is the part of town I live in, but things seem to be just fine.

Whether people are putting it all on plastic trying to keep their heads above water, or have the ability to pay cash, I do not know.

I am not trying to sell a home, so the home values don't matter to me much either, until I am ready to buy. Then I want them to drop like a rock again, at least the ones I will be looking at.

Anyway, just my 2 cents, back to my cave......

Home prices are up because of Nevada's assembly bill 284. Unemployment rose a little this month after falling steadily. It will take three years for industrial proction to return to normal.

Quote: Wizard

The Zillow "home value index" for Las Vegas is up 2.9% the Q1 of 2012. Just the buzz on street is that prices are on the rise. I think the jump will be higher for Q2, whenever those figures come out. The tough part is getting financing, as the banks are ultra-tight with their money right now.

If you trust Zillow my house is up 7% YTD in Summerlin. The homes in my neighborhood are selling within a couple of weeks or even days after going on the market. One of my neighbors is an agent and says it is impossible to get a house if you don't have 100% cash. They have been sending out letters to homeowners trying to convince them to make a private deal with one of their mortgage customers because that is only way they can get anything in lower or mid price ranges without 100% cash. While bank lending I am sure is a problem, they claim that the cash buyers are simply getting ahead in line of the mortgage buyers because if the house does not appraise it does not matter to the cash buyer and it closes faster.

Here is an article on the same topic:

http://www.lvrj.com/business/house-hunter-discovers-cash-is-king-in-las-vegas-165046236.html

I hate linking to LVRJ after that silly Righthaven mess but the article is right on topic.