Win some, lose some.
That describes the Las Vegas economy’s performance in the second quarter, as the city’s jobs market gained ground while housing prices and economic output slumped, according to a Tuesday report from think tank Brookings Mountain West.
Brookings’ Mountain Monitor pointed to “slow but steady progress lifting Las Vegas,” as the local market’s employment picture improved.
The city’s jobs base grew 0.6 percent from first quarter to second quarter. That was the highest growth rate in Brookings’ Intermountain West region, a 10-city zone that includes Phoenix, Denver, Salt Lake City, Tucson, Ariz., and Albuquerque, N.M. The Intermountain West averaged 0.4 percent job growth, while the nation’s 100 biggest metropolitan areas averaged 0.2 percent growth.
“That Las Vegas got more than half a point of job growth is absolutely meaningful,” said Mark Muro, a co-director of Brookings Mountain West and an author of the Mountain Monitor. “It was one of the better performances in the region, so I think that is not nothing, and is certainly welcome.”
Job growth came in education, health care, professional and business services and leisure and hospitality, Muro said.
Still, if you measure from the job market’s low point in 2010’s first quarter, Las Vegas has boosted its jobs base 1.5 percent – a fraction of the 12 percent it shed in the downturn.
That’s why above-average quarterly job growth wasn’t enough to turn around local unemployment. Sure, joblessness here sank 0.6 percentage points from the first quarter to the second quarter, outpacing declines of as much as 0.3 percentage points in Utah cities and up to 0.5 percentage points in Colorado metro areas. But local unemployment stalled at a quarterly average of 12 percent, compared with 7.9 percent in the region and 8.2 percent nationally. Salt Lake City had the lowest regional jobless rate, at 5.8 percent.
Nor could job expansion rescue the Las Vegas Valley’s economic output, or the value of goods and services produced locally. The city’s output fell 0.2 percent in the second quarter, after rising
1.6 percent in the first three months of the year. Las Vegas was the only regional city that posted a production drop. The 100 biggest U.S. cities averaged a
0.4 percent output gain, while the Intermountain West averaged a 0.3 percent rise. Ogden-Clearfield, Utah led the way at 0.8 percent.
Brookings blamed Las Vegas’ poor output on sustained pain in real estate, finance and construction. Real estate activities make up about 5 percent of the local economy, so any prolonged downturn will ripple through the business community.
And nowhere is that continuing struggle more evident than in housing prices, which “plumbed new depths in the second quarter,” the report said. Brookings’ housing index, which uses data from the Federal Housing Finance Agency, averaged 102.09 in Las Vegas in the second quarter. The last time it was that low? The second quarter of 1995, when it was 102.07. That means local housing prices have fallen to their levels of 17 years ago, said Brookings policy analyst Kenan Fikri.
The index peaked locally at an inflation-adjusted 294.15 in the fourth quarter of 2006, Fikri said.
The Greater Las Vegas Association of Realtors reported median prices of $138,000 for a single-family home and $65,000 for a condominium or townhome in August. The association’s numbers include only home sales that its members closed on.
Here, at least, Las Vegas has plenty of company: Housing prices fell in every regional city save Phoenix, where they increased 0.5 percent. What’s more, housing prices reached second-quarter lows in 87 of the nation’s 100 biggest U.S. cities, the report said.
Despite its subpar performance in output and real estate, Las Vegas in the second quarter no longer ranked among the bottom 20 big cities for economic performance.
But that couldn’t change an overall picture of tepid economic recovery.
Muro said the Las Vegas economy looks “modestly better” thanks to job creation and unemployment declines.
“But that’s bracketed by these massive losses during the recession and only a modest uptick since the trough,” he said. “The monitor underscores the depth of the challenge and the frustrating pace of recovery, which is really testing the patience of the region. I think there’s a continued sense that the nation, the state and Las Vegas all have to redouble efforts to rekindle growth. This is modestly encouraging information for Las Vegas, but it’s clearly not acceptable on a long-term, or even short-term, basis.”
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