A weak economy has dealt some bad hands to Carson Valley gaming and some retail sectors, but the good news is that real estate markets may be recovering.
Following the New Year, the Nevada Gaming Commission reported a net loss of $7.5 million for Carson Valley and Carson City casinos for 2007.
"Our industry has definitely felt the effects of the economy," said Bill Henderson, director of sales and marketing for Carson Valley Inn. "When people have less money to spend, they game less, go out to eat less."
Henderson said the same economic factors are affecting both Nevadans and visiting Californians the gaming industry depends on.
"The rising price of energy is affecting people's ability and willingness to travel," he said. "In California, people are going to Indian casinos because they don't have to waste a lot of time and gas."
Henderson said the expansion of Indian casinos in California has long been a problem for Northern Nevada casinos, which is made worse by a lousy economy.
"The profitability of gaming in Northern Nevada is never going to be what it used to be," he said.
He said the industry is facing rising costs of business, including insurance, benefits for its employees, energy costs and maintenance. He said unlike other businesses that can raise product prices to compensate for larger expenditures, gaming cannot raise its prices for the consumer.
"There's no way to raise our prices. We can't go in and tighten our machines," said Henderson. "We depend on the volume of people we get, and when the volume of people goes down, our profits go down."
According to the last report issued by the Nevada Department of Taxation, taxable sales in Douglas County were down 7.3 percent for the month of October. Some retailers were forced to close, many of them small mom-and-pop stores. Other businesses consolidated, including Capital Ford, who at the beginning of January closed their Minden branch at the intersection of Highway 395 and County Road.
But there's good news for the housing market. Although sale of new homes is still sluggish, resales, the selling of old homes, is rising, according to Realtor Marsha Tomerlin of Coldwell Banker Itildo.
"Every six months, it's getting better," Tomerlin said. "There is a group of people who know now is the time to buy a house."
She said a large inventory of property with low interest rates is providing prospective home buyers with tremendous opportunity.
"The market is turning into a mini-bull market," she said. "The bear is sleeping, but the bull is getting more aggressive."
In economic lingo, a bear market is a slow, down-turning market where investors sell. A bull market is an aggressive, expanding market where investors buy.
"Our bread and butter are resales," said Tomerlin. "A couple of very big builders are discounting new homes to get rid of their inventory."
She said resale profits are equal across the Valley.
"The upper end market, homes over $600,000, is decent, while the lower end, the sale of homes between $200,000 and $350,000, is very good and strong," she said. "The market is on the rise. I think 2008 will be a good year."
