The "rapidly cooling" Las Vegas housing market could lead to a surge in foreclosures next year, according to Foreclosures.com.The Las Vegas market has been distorted by out-of-state speculators who bought new homes to "flip for fast profits," with some homes selling two or three times in a matter of months, said Alexis McGee, president of Foreclosures.com. "When you see year-over-year price appreciation of over 52%, you know that rate is unsustainable," she said. ".... The hotter the market, the steeper the price correction will be in order to get back to normal. It looks like the speculators have left town, and the housing supply has jumped from one month's inventory to five." When interest rates rise, increasing downward pressure on prices, homeowners who bought at the height of the boom with adjustable-rate mortgages will find themselves "upside down" in their property -- that is, owing more than the house is worth, Foreclosures.com said.

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