Housing Price Bubble Seen in Vegas

Price inflation of resale homes in the greater Las Vegas area averaged a record 45.3% over the past year, suggesting the existence of a housing price bubble that could deflate at any time, according to Foreclosures.com, a Sacramento, Calif.-based distressed property investment advisory firm.The 45.3% Clark County price rise from July 2003 to July 2004 represents "an all-time record for U.S. housing markets, and is far above a sustainable level," said Alexis McGee, president of Foreclosures.com. She cited figures from the Greater Las Vegas Association of Realtors indicating that new listings of single-family detached homes have risen 78.4% during the same period, reaching a median price of $329,900. "That's a sure sign that speculators are in the Las Vegas market," Ms. McGee said, and that they are "buying new homes from builders, and reselling them at a profit a few weeks later." But some major builders are scaling back prices in new subdivisions, and the Realtors group says the time on market for new houses has risen from 8-10 days to more than 30 days, Ms. McGee said. "When things slow down, the speculators will leave the scene and there will be a shakeout," she said. The firm can be found online at http://www.foreclosures.com.