It would appear that the Silver State is slowly making a comeback, according to a new report from Wells Fargo’s Economics Group. Nevada, which posted the fastest year-to-year growth of any state, is battling back from the housing slump and severe recession.
From its pre-crisis low, Nevada's unemployment rate rose 9.7 percentage points to 13.9 percent in 2010, and remains well above the national average at 8.5 percent. Fortunately, the economy is bouncing back and recovery has accelerated.
Nonfarm payrolls rose 3.8 percent last year, with business investments and growth at the University of Nevada, Las Vegas fueling the recovery. The group from Wells Fargo also reported that tourism is heading in the right direction: "Business travelers account for about half of Las Vegas's visitors, and trade shows and convention attendance rose 3.3 percent in 2013."
Increased visitors in the all-important leisure and hospitality industry, which makes up 28 percent of workers in the state, should help continue recovery in the state.
The Wells Fargo Economics Group believes that housing in the state should steadily improve. Homes lost nearly 60 percent of their value during the recession, and have "snapped back a bit," rising 18.5 percent over the past year. However, prices remain 39.9 percent below their pre-recession levels, and price appreciation has moderated. Additionally, investor demand in Southern Nevada appears to be waning, according to the group's report.
Distressed sales made up more than 60 percent of all sales in 2012, but that share has dropped below 40 percent in 2013, resulting in fewer homes sold. "Traditional buyers are slowly coming back to the market, although they do not yet seem to have been able to completely fill the void left by the more rapid retreat of investor buyers," the group found.
Overall, the group believes that Nevada's housing market is on the right track, fueled by rising employment, higher incomes, and a rapidly increasing population. The group notes that home vacancy rates are trending low but remain below the national average, while inventories "will have to come down further before residential construction can really take off."