From USA Today: Is Your State in a Recession?
Before you Freak Out or feel warm and fuzzy that your state is not listed, it’s important to Understand what a Recession means in the first place and you’ll certainly understand why California (the largest economy in the United States and larger then most countries), Florida, Arizona and Nevada made the list.
From USA Today:
Arizona, California, Florida, Michigan and Nevada were already in a recession at the start of the year. Those states account for one-quarter of the nation’s total economic output.
Five states are accounting for 25% of the U.S. Economy so you can make your own determination of what that means. California is obviously the biggest contributor to the total and With record high gold prices, it might surprise you that Nevada is actually the largest producer of Gold in the United States. (82% of the gold produced in the United States.)
The definition of Recession from BusinessDictionary.com: Recession.
While the word itself makes people shudder and causes some heated debates on the business shows, It’s a natural occurrence that happens to every economy and generally after periods of high growth. (Precisely why many of the green states are green — there never was a boom in their economy.) Much like home prices, economies don’t grow forever and obviously Nevada is on the list because of the big drop in home prices and new home construction in the past year.
I hope you don’t think that the recent injection(s) of cheap money into the economy by the Fed is intended to just save the states already classified as being in a recession because it’s not.
Las Vegas has obviously slowed down from the High flying growth in the past several years and it’s important to know what is on the way. Future Growth of Las Vegas.
When the projects are completed, roughly $30 billion will have been invested and the Strip’s room capacity will have jumped 30 percent.
Deutsche Bank, in a report to investors, said the building boom will create upward of 120,000 new jobs. The Las Vegas Convention and Visitors Authority said the room inventory expansion could boost room tax collections to more than $571.8 million annually, 30 percent higher than the current collections. The tourism bureau said it expects Las Vegas to attract 43 million visitors by 2010, a 10 percent increase over the 2007 projection of more than 39 million.
In terms of Capitalism, I don’t know of any other state with an economy like Nevada, and more specifically, Las Vegas. Billions of Dollars of investment are already currently invested for new projects in Las Vegas including the Largest and Most Expensive Private Commercial Project in the United States - EVER.
Analysts, however, point toward the end of 2009 as the target date when the greatest impact could be felt.
In November of that year, MGM Mirage is expected to begin opening its multibillion-dollar CityCenter development on the Strip’s southern end between Bellagio and Monte Carlo. The 77-acre site includes a 4,000-room hotel-casino, three boutique hotels that will include high-priced residential condominiums and a luxury condominium-only development. The hotels and condos will connect with a retail, entertainment and dining complex.
CityCenter, which has now been estimated to cost between $8.1 billion and $8.4 billion, has been billed as the largest and most expensive private commercial construction project ever in the United States. When it opens, it is expected to provide jobs for more than 12,000 workers.
I’m not going to argue with the report that Nevada is in a recession but I can pretty much guarantee you that it will be one of the first states to recover. Las Vegas Home prices have already taken a big hit in values and there are certainly several indicators of where the bottom is. Can you say there are multiple offers coming in on homes for sale in your state within days? We can and it’s certainly getting frustrating competing with multiple offers on the Really Good Las Vegas real estate deals. (Key words: Good Real Estate Deals. Not all of the Las Vegas homes for sale are even close to being a good deal and never were even during the high flying days of rah-rah cheer-leading.)
If you think the green states are recession proof, think again and make sure you take a look at a comparison of property taxes in Las Vegas compared to other states and you tell me where you want to spend your retirement years on a fixed income.
Paul Francis, ABR,CRS | Coldwell Banker Premier | Las Vegas Real Estate | 702.592.3058
