Has Las Vegas Recovered From The Great Recession?
Las Vegas’ economy is supposedly on the mend. Construction, consumer spending and tourism are driving the recovery.
But with foreclosures, stagnate wage growth and other issues lingering, what kind of recovery are we experiencing?
Or, maybe we should be asking - is our economy healthy?
John Restrepo is principal at RCG Economics. He has been watching the Las Vegas economy for a number of years.
He calls the economy "healthier" but it is not the exponential growth many people had wanted.
"It's what I call: the elongated Nike swoosh recovery on most of the indicators," he said, which he explained means most everything is growing at a steady rate.
While a lot of people would like to see the economy rolling at a breakneck speed, Restrepo pointed out just how deep the economic hole was.
"This recession was pretty deep," he said. "It wasn't your typical recession. It was a global economic crisis and it takes a while to heal from that."
But he said in most sectors from health care to gaming, jobs are growing steadily and we're heading in the right direction with the lessons we learned from the hard fall of the Great Recession.
"We didn't really understand the meaning, in my opinion, and the reality of what it meant to be a diversified economy until after the recession started," Restrepo said.
Housing Market Recovery
One of the biggest consequences of the global financial crisis was the impact on Nevada's, particularly Las Vegas', housing market.
The state was at or near the top of the list for foreclosures and underwater homes for several years.
Keith Lyman, president of the Greater Las Vegas Realtors Association, told KNPR's State of Nevada that the number of distressed homeowners, those facing foreclosure or owing more on their home than it is worth, has dropped to 13 percent from 60 percent but it continues to be an issue.
"There are way too many abandoned homes on the horizon here," Lyman explained, "So, we have got to do something to address that."
He also had a warning for people who stopped paying their mortgages in the height of the recession.
"People who have been sitting in their homes and they have not been making their payments, and they know who they area, the time is come," he said, "The clock has run out."
As for the housing market over all, Lyman described it as "steady."
He said "bounce-back buyers" are now getting back into the market and they're using savings to do it, which Lyman says is an impact of the recession that was a good one.
People are taking time to have the money they need for a down payment and reserves for a rainy day. They are also learning about the house buying and lending industry.
"That helps us more than anything," Lyman said.
He said for those waiting for the past eight years to sell their home, now is the time
However, Lyman is "bewildered" by the increase in new home development, because so many abandoned homes can still be found in Las Vegas neighborhoods.
The Banking Industry
Another one of the impacts of the recession has been new regulations on banks for lending.
Craig Kirkland, executive vice president and director of retail banking at Nevada State Bank, said the new rules for mortgages have "dampened" demand for them and spurred some of the growth in auto loans.
Auto loans have been robust of late, according to Kirkland, which he says is an indicator of economic strength.
"I think it is a reflection of confidence out there in the market place," Kirkland said. He said there has been a 74 percent increase in car loans over 2010.
But Kirkland says the biggest problem for Las Vegas continues to be wages.
"The real problem right now is wage growth," he said, "We're only up .4 percent, so wages are stagnant, in fact they are decreasing relative to inflation."
Restrepo agrees. He said that wage stagnation is tied to underemployment and the "slack in the labor market."
"You have to have a long period of time with relatively very low unemployment to put that pressure on employers to increase wages," he said.
Restrepo believes Las Vegas is on the road to recovery but it will take time.
"It takes a long time to turn an economy around and transform it."
John Restrepo, principal, RCG Economics; Keith Lyman, president, Greater Las Vegas Association of Realtors; Craig Kirkland, executive vice president and director of retail banking, Nevada State Bank