WHAT REALLY IMPACTS THE FUTURE OF LAS VEGAS REAL ESTATE

Implications:     The one constant in Las Vegas is change.      Sadly, too many analysts suffer from marketing myopia when they examine change.  They’re like the boxer who can see the jab, but misses the uppercut.      Take a close look at the housing statistics for 2007. They are terrible, no matter from which angle you examine them.  The doomsayer analysts gleefully tell you they are evidence of change in the credit markets or changes in pricing structures which become insurmountable obstacles to purchase activity.     But, that analysis is only partly correct.

Analysis:     That analysis overlooks three changes that underlie the numbers … and powerfully impact Las Vegas’ future. 
    TRANSITION: Las Vegas is in transition from a suburban market to an urban market.  Lack of land and changing demography will make Las Vegas a city of urban villages and mid-rise (and later Hi-Rise).  We are surrounded by BLM land and Native American property.  We have less than 60,000 buildable acres – and we’re eating through them at the rate of 8,000 acres per year. 
    DIVERSIFICATION:  The economy of Las Vegas is diversifying. At the turn of the 21st Century, the resort-gaming industry dominated employment, boasting one out of every four jobs in Clark County.  By last year – barely seven years into the new millennium – that number had slipped to one out of seven.  In the next five years, 40,000 hotel rooms will be added to the “Strip” and the more than 113,000 jobs created. Some analysts say the percentage of resort gaming employment will increase again.  I respectfully disagree. The City has doubled in population to 2 million because employment is diversifying.  There is a dot.com presence here as well as superior medical presence.  The Lou Ruvo Brain Center, The World Market Center – and in 2011 the World Jewelry Center – have made Las Vegas a Mecca for diverse business interests. 
    NEGATIVE ECONOMICS:  Las Vegas has never been immune to economic turmoil – in the region surrounding it, in the nation or in the world.  But, up until now, the resort-gaming industry has insulated this market from the worst of the economic vagaries that damage others.  Not so anymore.  If economists learned nothing else from 2007, it was that the housing industry is indeed a powerful force in this economy.  The health of the local economy is strongly linked to the health of the housing industry here. 
    What does it all mean? It means Las Vegas will begin recovery in 2008 … but will experience the lingering effects of a market that has had more than its share of punches.  
      It means that Las Vegas will have to slug its way back to the top.