COLUMN: Carmel Hopkins

During a recent real estate seminar, the question was asked, "Are we in a bubble?"

Tim Sullivan, marketing guru with the Meyers Group, believes that while the national economy may be, the Las Vegas market has proved most resilient.

In bubble conditions, housing affordability is low, in Las Vegas it's high; equity is low, in Las Vegas it's moderate; job growth is nonexistent, in Las Vegas it's low to moderate; and inventory is high, in Las Vegas it's very low. Once again, our economy keeps on humming, although a little less vibrantly, while the rest of the nation struggles with issues we don't face, according to Sullivan.

We all know our tax structure is benign. Here's an example: Personal income tax in Arizona is 2.87 percent to 5.04 percent; it's 1 percent to 9.3 percent in California; 4.63 percent in Colorado; 1.6 percent to 7.8 percent in Idaho; 5 percent to 9 percent in Oregon; and 2.3 percent to 7 percent in Utah. Then, we say smugly, it's 0.0 percent in Nevada. We also are the only Western state without corporate income tax, a fact that businesses notice when contemplating moving here.

Does anyone wonder why people are scrambling to move to Las Vegas? Nevada Department of Motor Vehicles' figures show California is No. 1 in newcomers' area of origin, making up 38.2 percent of them. The other states in order of the Top 10 are Arizona, Florida, Illinois, Texas, New York, Colorado, Utah, Washington and Hawaii.

Census Bureau figures published in June 2002 state more than 700,000 people moved here in the past 10 years. Anyone who has attempted to negotiate the freeways between 7 and 8:30 a.m. knows that stat falls into the no-kidding category.

That influx has influenced the housing market. My friend Dennis Smith, who reports monthly on home sales in his Las Vegas Housing Market Letter, shows the median price for new homes recorded in July was $180,305, an increase of 7.21 percent from July 2001; the median price of a resale in July rose to $152,000, a year-to-year increase of 8.57 percent.

One alarming trend in Southern Nevada is while the median price has skyrocketed, the level of affordable housing has plummeted.

In 1993, 82 percent of the new homes in the valley were valued at less than $150,000. Now, only 24 percent of the new homes are in what is called "the affordable housing range."

Local home builders have kept their inventory rates low, as new-home permits have decreased by 436 from July 2001 to July 2002; all the while, there has been a year-to-year increase of 74 sales, or less than 1 percent. This lack of inventory fuels higher prices because the demand for new homes is still strong.

Curiously enough, apartment vacancy rates in the second quarter of 2002 were at 7.7 percent, the highest in the past 10 years according to figures compiled by UNLV.

This leads me to wonder: More people are moving here; home prices are up; apartment occupancies are down. Where is everyone living?

The Housing Division of the Nevada Department of Business and Industry recently unveiled its "Nevada Special Needs Housing Assessment," a glum study of housing needs and supportive services. Want a shock? Check out the stats at www.nvhousing.state.nv.us and click on "publications."

According to the study, there are more than 8,000 people who are homeless and more than 7,000 who are precariously housed (living in cars, sleeping on somebody's couch, etc.). Thousands live week to week in motels, one paycheck from the streets.

Perhaps if our tax structure was a little less business benign, we'd be able to take some of these people out of their distress. It seems as though the governor has made a strong point for some kind of a small tax hike. It wouldn't hurt any of us who have jobs and businesses, and surely would help the struggling members of the community.

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is Carmel_Hopkins@ lasvegasnewspapers.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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