Las Vegas Sun

November 30, 2021

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Another bubble? Experts assess housing market and more

January Real Estate Sales

This 2016 photo shows a Las Vegas home for sale.

Business people from across the Las Vegas valley gathered at UNLV today to see a snapshot of the Southern Nevada economy and hear experts offer outlooks on the region’s future.

The Las Vegas Metro Chamber of Commerce’s annual Preview forecasting event and trade show drew more than 2,000 business and community leaders to the Thomas & Mack Center and the Cox Pavilion. About 100 exhibitors, including a number of local restaurants, were on hand to display their products.

So where is Las Vegas, and where is it going? Here are a few takeaways from the event’s slate of speakers:

No, the sky is not falling in the housing market

Jeremy Aguero of Applied Analysis used a story from The New York Times to frame his examination of the Las Vegas residential real estate market.

More to the point, he picked the story to pieces.

Aguero said that contrary to the story’s headline — “The epicenter of the housing bust is booming again. (That’s a warning sign)” — key indicators showed that the market wasn’t a bubble ready to burst.

Among those indicators: although home values have risen sharply since the teeth of the recession, when compared to values from 2005 the increase has been moderate — just 9 percent. That’s the lowest increase in any Western state.

“Oh, the humanity of it all,” Aguero said jokingly.

Aguero also said that while new home construction was booming, another contributor to the area’s meltdown during the recession, it was a fraction of its prerecession peak. So while last year’s 9,944 sales of new homes looks alarming when compared to the 3,733 sold in 2011, it looks moderate compared to the 39,000 in 2005.

Another key indicator: The percentage of homeowners with underwater loans has shrunk to 4.7 percent today from a whopping 69.6 percent in 2010 and 25.4 percent five years ago. The current rate is in line with the national average.

“I’m not saying it’s all roses and sunshine,” he said. “But if we look at the numbers today, they’re not out of line with national averages and historical trends.”

Yucca Mountain’s future hinges largely on one person

The Brookings Institution’s John Hudak, visiting from Washington, D.C., said there was majority support in the U.S. Senate and House to restart construction of the Yucca Mountain nuclear waste repository.

However — and it’s a big however — Nancy Pelosi voted against the resurrection when it came up in the last congressional session. That being the case, it was significant for Nevada when Democrats chose Pelosi as House speaker, a position in which she’ll control which items come up for votes.

“Right now, Nevada’s best friend if you’re interested in stopping Yucca is Nancy Pelosi,” Hudak said.

Hudak also speculated that even if a Yucca revival bill were to make it through both chambers of Congress, Trump might veto it. The reason: Approving the project, which is largely opposed by Nevada’s leadership, could cost him votes in 2020 in an important swing state.

The state’s public education funding formula is long overdue for a reboot

Both Aguero and Robert Lang, of the Brookings Institution and Brookings Mountain West, said Nevada’s current formula is leaving the Clark County School District at a significant disadvantage compared to other districts. The formula doesn’t account for CCSD’s large number of students facing special challenges, such as English language learners and those needing free or reduced-price lunches.

No wonder it’s not working, they said: It’s been in place since 1967.

Teacher pay in Nevada seems reasonable — until you dissect it a bit

Aguero noted that Nevada ranks No. 19 nationally in average pay for public school teachers — in the mid-$50,000 range. But Nevada has the highest student-to-teacher ratio in the U.S., he said, so in terms of pay per pupil, Nevada teachers are the third lowest-paid in the nation.

Putting the convention numbers in perspective

Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, noted that construction was underway on 3.7 million square feet of convention space in Las Vegas. Only five cities in the U.S. have that amount of space, he said. When the construction is done, Hill said, Las Vegas will have 15 million square feet.

More perspective on the Strip

In calling for investment in public transportation, Lang said the Strip is by far the densest-built space in the U.S. without a rail system.