Housing Excess In Northern Nevada – Case Study Example
HOUSING EXCESS IN NORTHERN NEVADA (Comprehensive Housing Market Analysis-2008) ID Number: of Name:
Name of School (University)
Estimated Word Count: 321
Date of Submission: December 28, 2011
The state of Nevada has an economy anchored primarily on tourism-related industries such as gaming, leisure and hospitality enterprises. It is therefore dependent on the discretionary type of spending when people have excess disposable incomes. Back in 2007, its non-farm jobs increased slightly (by 0.4 percent equivalent to about 900 jobs). The gaming, hospitality and the leisure industries provided the main source of employment (18% of total non-farm jobs) which enticed five million out-of-state visitors with an economic impact of approximately US$ billion.
Demand for housing is dependent on two main factors: retirees who moved into the state, lured by absence of state taxes, nice climate and recreational attractions at Lake Tahoe and secondly, from inward migration. The state has population growth at 70% coming from migrants while only 30% was from net natural increase (resident births minus resident deaths); this ratio showed how Nevada is dependent on migration due to job prospects and the retirees or seniors. A quite interesting fact is only two counties account for majority of population, which are Washoe County (includes cities of Reno and Sparks- at 99%) and Storey County (Virginia City- at 1%). This population concentration is due to the rest of the Nevada state as inhabitable desert.
House prices doubled since beginning 2000 but started to suffer declines starting in the first quarter of 2008 due to bursting of the housing “bubble” which resulted in excess vacancies of finished housing inventories. This forced developers to convert their condominium projects from for-sale only to rental units with no new large-scale construction projects on the way. A soft housing-sales market (63%) adversely affected the rental market (37%) with a recession denting the demand for new houses. There were 27% less houses sold in 2007 compared to 2006, prices declined by some 10% and unsold units went from 22 weeks to 32 weeks (Leong, 2008, p. 7).
Leong, P. J. (2008, January 1). Comprehensive housing market analysis: Reno, Nevada. U.S. Department of Housing and Urban Development. Retrieved December 27, 2011 from http://www.huduser.org/portal/publications/PDF/CMAR_RenoNV_08.pdf