RENO - Northern Nevada's economy will continued to be challenged this year by the struggling housing market, economists and real estate experts said.
"The adjustment will take longer than we think. The bottom line is, we'll muddle through 2008," Keith Schwer, economist at the University of Nevada, Las Vegas, said Wednesday at the annual Associated General Contractors' "Construction Outlook."
Nationally, housing still is in a free-fall, said Ken Simonson, chief economist for AGC of America.
"Home building will continue to be a weak market all year long," Simonson said.
Ken Stark, owner/broker of Stark & Associates/TCN Worldwide Commercial Real Estate, said Northern Nevada's housing market and lack of qualified workers hindered interest last year in companies looking for commercial space here.
"They relocated to Sacramento, Las Vegas, Boise and Salt Lake City, where there's less of a gamble," Stark told about 100 people at the forum sponsored by the AGC Nevada chapter.
He said office vacancy rates as of December were 19.6 percent, up from 11.6 percent four years earlier. One bright spot, he said, is downtown Reno, where the rate is at a record low and the 12-story former Porsche building sold in September for $38.2 million.
In 2008, Stark said, the office market will have to be flexible, as "people are definitely, in these times, cost-conscious."
Brad Elgin, vice president at Stark & Associates, said the region's industrial sector also saw marked increases in vacancies in 2007 and will continue to do so this year.
But he cited growth in the outlying areas, including east of Sparks at the 104,000-acre Tahoe-Reno Industrial Center.
"While the majority were expansions, this is positive," Elgin said. "But future success depends on our ability to encourage new companies into the market."