Tuesday, October 9, 2012

Economy Improves - But For How Long?

As the local economic slowly trickles in (is it me, or is it taking longer these days?), Southern Nevada is showing continued (though not steady or quick) growth in August 2012. The strongest growth has been in New Home Sales (will this last? – it just might) and New Residents (makes sense), as well as Taxable Sales. The only ding on the numbers in August was Visitor Volume. Currrently, the Recovery Index stands at 91 - the highest level yet since hitting a low of 79 in March 2010. If the current growth rate continues, the index could reach 100 in the course of 16 to 20 months.

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In 2010 and 2011, growth was stronger during the first three quarters of the year than in 2012, and then dropped off sharply in the fourth quarter of the year. Growth in 2012 has been slower than in 2010 and 2011 – which may mean the growth was more realistic and will continue into the fourth quarter, or that when the winter chill sets in it will erase what growth we’ve seen so far. Hey – this is economics – we always have to look for the black cloud within the silver lining.

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Just the same, given the decent growth seen in the third quarter of 2012 – especially since that growth appears to be in one of the key “industries” of Southern Nevada, population growth – there is the distinct possibility of a Merry Christmas and Happy New Year, i.e. continued improvement in the commercial real estate market. Only time will tell – cross your fingers!

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