Nevada: a building boom worth gambling on?
Las Vegas suffered severely in the wake of the US housing crisis, as foreclosure rates went through the roof. Now, though, the housing market is beginning to rebound.
According to the Greater Las Vegas Association of Realtors, 2015 was "the most stable year the local housing market has seen in at least a decade". Prices grew 6.4 per cent year-on-year. Sales rose 8 per cent year-on-year overall. In December alone, 20.4 per cent more homes and 20 per cent more condos and townhomes were sold than in December 2014. Median prices of condos and townhomes, meanwhile, rose 12.3 per cent year-on-year.
"I think most people prefer the more steady and more predictable housing market we had last year," said 2016 GLVAR President Scott Beaudry.
Indeed, 2016 is forecast to enjoy "more of the same".
The coming year, though, is also set to enjoy a building boom like no other, as the electric car industry begins to rev up its engine. Tesla Motors and Faraday Future have both announced huge plants in the state. The former, headed up by Elon Musk, is planning a 10-million-square-foot factor in northern Nevada, while rival Faraday, which caught the world's eye at CES 2016 with a flashy concept car, is set to build a 3-million-square-foot operation in North Las Vegas.
One will build lithium ion batteries for cars, the other will construct actual vehicles. Both will potentially transform the state's housing market.
At the weekend, Faraday Future began clearing the site for its new facility, it announced on its Facebook page:
Together, the operations will require 11,000 new workers in the coming five years. While some may be sourced locally, the influx of employees is expected to surge by 80,000 people in Reno-Sparks and Vegas by 2020. They will all need somewhere to live.
Tesla's factory will be based in Storey County, in an industrial Centre that makes up around 60 per cent of the county's land mass. The park is based around the historic mining town of Virginia city, with its own emergency services, power plants and water facility.
"In a 5,000-acre component, we can build 100 million square feet under roof and employ a city the size of Carson City," Lance Gilman, a partner in the park, told the Review Journal.
The boom follows a similar trend in North Dakota, where an oil boom drove a flood of companies and workers to the area - a surge that prompted a race to build accommodation, from shipping containers to impromptu hotels. Oil prices have since plummeted, causing the mini-boom to go bust, but for seven years in a row, North Dakota enjoyed the USA's lowest unemployment rate.
Electric cars are being developed precisely to end a reliance on oil. If Tesla and Faraday continue to accelerate in the future, North Dakota's old unemployment title could well be stolen by Nevada.
Developers such as Lennar and Toll Brothers are already constructing projects in the area. Lansing is buiding the Santa Maria Ranch in the Dayton Valley, ultimately offering 2,214 new homes. The Reno Development Company has six developments in the works around Reno. Toll Brothers, meanwhile, is building the luxury community Presidio at Damonte Ranch.
Some developers, though, are reportedly reluctant to enter the market, following its previous crash.
"We will have a housing crisis if we don't respond to it," Mike Kazmierski, president of the Economic Development Authority of Western Nevada, tells Curbed's Property Lines.
"They are building at a pace that based on their historic trends has been adequate, but they need to accelerate the pace. The sooner we get things started the better."