UNR\'s Brian Bonnenfant\'s Nevada Business Outlook 1-23-09

1. Nevada Business Outlook
Brian Bonnenfant
Project Manager
784-1771
bonnen@unr.edu

2. New Population & Residential Construction by Year
Washoe County, Nevada
Calendar Year New Units July 1 Pop Estimate Pop Added Per Year New Pop per New Unit
1998 4,149 327,899 7,071 1.70
1999 5,670 334,601 6,702 1.18
2000 4,091 341,935 7,334 1.79
2001 5,976 353,271 11,336 1.90
2002 5,554 359,423 6,152 1.11
2003 4,686 373,233 13,810 2.95
2004 5,088 383,453 10,220 2.01
2005 5,940 396,844 13,391 2.25
2006 4,889 409,085 12,241 2.50
2007 2,573 418,061 8,976 3.49
2008 700 423,833 5,772 8.25
10-Year Avg (1999-2008): 4,517 9,593 2.12
New Units
New Units v. New Population
New Population
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

3. 1. Clark County
2. Lyon County
3. LA County
4. Carson City
5. Sacramento County
(40% of all exemptions)

4. California
Northern California
Southern California
Nevada Counties
12,000 Other States
IRS Exemptions into Washoe County Outside NV - Unidentified
Foreign
10,000
8,000
6,000
4,000
2,000
0
1
2
3
4
5
6
7
00
00
00
00
00
00
00
-2
-2
-2
-2
-2
-2
-2
00
01
02
03
04
05
06
20
20
20
20
20
20
20

5. 300
274 270
Single-Family & Condo Foreclosures
254
246
Washoe County
233
250
218
197 199
200 177
199 194
153
132
150 167 161
154
108
132
92 126
86
100
72 69 65
64 64 103
97 94
50 66
58 New Bank-Ownership per Month
47
43
Bank Re-Sales Per Month
29
27 26
19
0
12
7
8
08
7
8
7
8
8
7
8
7
8
7
08
8
08
07
08
8
-0
-0
l-0
l-0
-0
-0
-0
-0
-0
-0
-0
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6. $300,000
$290,000
Median Deed v. Resale Values
$280,000
Washoe County
$270,000
$260,000
$250,000
$240,000
$230,000
$220,000
$210,000
Median Foreclosure Value
$200,000
Median Resale Price
$190,000
$180,000
$170,000
07
08
08
7
8
07
08
08
07
08
7
8
-07
08
8
08
07
08
8
l-0
l-0
t-0
t-0
r-0
r -0
v-
v-
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c-
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y-
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Ju
Ju
Oc
Oc
No
Ap
No
De
De
Ma
Ma
Ja
Au
Au
Fe
Ju
Ju
Se
Se

7. Foreclosure Projections
• 6.5 million loans are projected to foreclose over the
next 5 years (Credit Suisse)
• (167,217 Washoe Co. households/112,377,977 U.S.
households) x 6.5 million foreclosures = 9,672
Washoe Co. foreclosures (161 per month))
• 2.2 million foreclosures over the next year (The Center
for Responsible Lending)
• (167,217 Washoe Co. households/112,377,977 U.S.
households) x 2.2 million foreclosures = 3,274
Washoe Co. foreclosures (279 per month))

8. Median New Home Sales Price
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$50,000
$0
Jan-02
Feb-02
Mar-02
Apr-02
May-02
Jun-02
Jul-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
-36% from peak
Sep-03
Oct-03
$423,311 Feb. 2006
$269,495 Dec. 2008
Nov-03
Dec-03
New Single Family Only:
Jan-04
Feb-04
Mar-04
Apr-04
Number of New Home Sales
May-04
Jun-04
Median New Home Sales Price
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Pe a k = Ma r 0 6 (3 4 2 sa le s)
Dec-05
Jan-06
Feb-06
Washoe County, Nevada
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Includes Single Family Residences and Condominiums
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Monthly New Home Sales Versus Median New Home Sales Price
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Dec. 2008:
Apr-08
Nov. 2008:
May-08
Jun-08
-90% from peak
Jul-08
25 SF & 9 condos
32 SF & 39 condos
Aug-08
Sep-08
Pe a k = F e b 0 6 ($ 4 1 2 ,1 8 4 )
Oct-08
Nov-08
Dec-08
0
50
peak
100
150
200
250
300
350
400
Number of New Home Sales
-64% from

9. 400000
Median Home Resale Price: 2001-2008
350000
300000
250000
Reno-Sparks quot;Gapquot; = $4,812 (2.3%)
200000
Reno
150000
Sparks
All Reno-Sparks
1% appreciation per quarter
100000
1q01
2q01
3q01
4q01
1q02
2q02
3q02
4q02
1q03
2q03
3q03
4q03
1q04
2q04
3q04
4q04
1q05
2q05
3q05
4q05
1q06
2q06
3q06
4q06
1q07
2q07
3q07
4q07
1q08
2q08
3q08
4q08

10. Vacant Land Sales
Washoe County, Nevada
Median Median
Number of Median Number of Median
Price Per Price Per
Transactions Sales Price Transactions Sales Price
Square Foot Square Foot
2008 2007
Period
1st Quarter 691 $9,801 $2 96 $287,500 $7
2nd Quarter 119 $200,000 $3 126 $240,000 $10
3rd Quarter 582 $53,223 $8 96 $190,250 $9
4th Quarter 276 $114,890 $5 134 $285,513 $20
TOTAL 1,668 $55,910 $5 452 $253,015 $12
Includes land-use codes quot;Vacant, other or unknownquot;, quot;Vacant, under developmentquot;, quot;Vacant, single familyquot;, & quot;Vacant, multi-residentialquot;.

11. • Statewide taxable sales for October 2008 of $3,731,466,740 represents a 6.2%
decrease over October 2007, and a 4.1% decrease for the four months of fiscal
year 2009. The largest increases in statewide taxable sales were realized by
Utilities, up 865.1%; Specialty Trade Contractors, up 14.0%; Professional,
Scientific and Technical Services, up 45.3%. Construction of Buildings, up
66.8%; and Administrative and Support Services, up 12.6%.
• Statewide Sales - Down 6.2%
• Clark County Sales - Down 6.8%
• Washoe County Sales - Down 13.9%
• Construction Industry Classification - Up 8.9%
• Merchant Wholesalers – Durable Goods - Down 5.7%
• Motor Vehicle and Parts Dealers - Down 31.3%
• General Merchandise Stores - Down 2.9%
• Clothing & Accessories Stores - Down 12.3%
• Food & Beverage Stores - Down 12.3%
• Home Furniture and Furnishings - Down 34.0%
• Accommodations - Down 1.0%
• Food Services & Drinking Places - Down 14.8%

12. Number of Home Resales
200
300
400
500
600
700
800
900
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
M otor Vehicle Sales
June05 (785 sales)
Existing Home Sales
Jun-04
Jul-04
Aug-04
Existing home sales peak =
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Washoe County, Nevada
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
Auto sales peak =
May-07
July05 ($126.5 million)
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Monthly Automobile Sales Versus Existing Home Sales
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
$100,000,000
$110,000,000
$120,000,000
$130,000,000
$140,000,000
Vehicle Sales ($)

13. Ju
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$0
n -0
6
Ju
l-0
Au 6
g-
0
Se 6
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-0
No 6
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Ja 6
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Fe 7
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M7
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Nonstore Retailers
-0
Ap 7
r-0
7
M
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-0
Ju 7
n-
Electronics & Appliance Stores
07
Ju
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Au 7
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No 7
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Taxable Sales - Washoe County
Ap 8
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14. Internet Sales Taxes
• In 1992, the US Supreme Court exempted out-of-state
retailers from collecting sales taxes in states where they
have no physical presence citing the burden of complying
with the regulations of thousands of different local taxing
jurisdictions & the resulting adverse impact on interstate
commerce.
• National Governors Association (NGA) has developed the
Streamlined Sales Tax Project (SSTP), a 43-state effort to
simplify and align sales tax policies.
• 22 of these states have enacted implementing legislation.
• It is hoped that by streamlining the sales tax system
Congress to enact the Taxation Fairness Bill, which would
require e-commerce enterprises to collect sales taxes.

15. 190,000
195,000
200,000
205,000
210,000
215,000
220,000
225,000
230,000
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Reno/Sparks MSA
Mar-06
Apr-06
May-06
Jun-06
Jul-06
2005-2008 Monthly Employment (Non-Farm)
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Employment Peak = 228,100 (Dec06)
228,100 (Dec06)
Jul-07
Employment Peak =
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
2008 = -1.1%
2011 = +2.4%
2010 = +1.8%
2009 = +0.3%
Sep-08
Oct-08 220,600
Nov-08
219,800

16. Largest Employment Decreases by Sector Media
n
Wage
Between Nov07 & Nov08 - Reno/Sparks MSA
Construction -4,600 -22.1% $20.38
Administrative & Support and Waste Management -1,600 -10.1% $11.12
Casino Hotels -1,600 -8.4% $8.91
Finance and Insurance -300 -5.0% $19.03
Information -100 -3.6% $18.33
State Government -300 -2.9% $22.97
Wholesale -200 -1.9% $17.17
Manufacturing -100 -0.7% $23.69
All Industries $15.16
5,600
# of Employees with Wages Greater than Median Wage for All Industries

17. 0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Ja
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07
Fe
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10
15
20
25
30
35
40
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Reno-Sparks, Washoe County, Nevada M
M ar
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Ap
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M
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Square Feet of Proposed Commercial Projects
07
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Reno-Sparks, Washoe County, Nevada
M
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8
Ju
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Monthly Proposed Commercial Projects
Au
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18. General Commercial
Office Commercial
Industrial
10 Yr Avg of Comm SF per New Resident
7,000,000 6,605,284
Construction Square Feet - Washoe County
6,000,000
5,000,000
4,000,000
3,299,383
3,001,501
2,927,583
3,000,000
2,441,470
2,406,857
1,828,797
1,831,390
2,000,000 1,630,193 1,597,253
1,572,809 1,486,671
2,062,616 1,417,378
1,896,997
1,176,597 1,096,603
1,582,143
1,013,942
1,000,000 1,179,783 1,296,368
1,134,394
1,090,961 959,245
876,976
771,019
734,462 132,116
653,695
527,800
243,559
469,956
334,428
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008YTD

19. Industrial Construction
• The industrial sector is not impacted by
commercial/office/residential construction or
population growth trends (labor force, durable-
goods consumption, & transportation
infrastructure).
• A successful industrial sector is primarily based on
location, location, location.
• Our region is seen as the “hub of the west”, but it
must compete with ports and areas with larger
populations.
• Future industrial construction will be impacted by
rising land and energy prices.

20. Office Construction
• Is impacted by business, population, and
employment growth.
• New offices construction was oversaturated in
2004-2006 due to housing developers (tenants)
that have now left the market.
• 234,312 sf net vacancy over two years, with a loss
of approx. 1,000 office jobs.
• 4th quarter 2008 - Overall vacancy at 19.2%
(26.9% in south Reno).
• Future office construction will be built-to-suit
versus spec-construction.

21. Public Works & “The Stimulus”
• Obama advisors claim that 3 million jobs will be
saved or created by their stimulus plan, with
678,000 jobs in construction (800,000
construction jobs have been lost over last two
years).
• House proposed a $825 billion economic
stimulus package on Jan. 15th, with $550 billion
in spending and $275 billion in tax cuts over the
next two years.
• $92 billion (11%) is proposed for public works
(does not include spending on energy projects).

22. Public Works & “The Stimulus”
• Future debates will center around spending
versus tax cuts.
• Alliance for American Manufacturing claim that
18,000 new jobs will be created for every $1
billion spent on public works.
• Spending on public works will create 22% more
jobs than stimulus packages directed towards
tax cuts.
• Burning question: can you wait two years?

23. Thank you.