Uh-oh... Las Vegas housing prices slip

Another market that is gonna get real ugly real fast.. The land of the dreamer, Las Vegas, has seen a crazy real estate ride as investors bid up properties that have no potential future residents - there are simply no people to live in these units.

But now they're getting out. But there's so many units going up. So what happens to them - do they stop construction half-way up? Do they complete and go bankrupt, leading the bank to auction off units? What a mess in the making...

The median price of existing homes sold in October declined for the first time in six months, an indication that some of the air is being released from the resale pricing bubble, a local housing expert said Wednesday.

The median resale price in October was $285,000, down $5,000 from the previous month, said Dennis Smith, president of Home Builders Research. It's still an 11.1 percent increase from $252,000 a year ago.

"We don't give a lot of importance to a one-month change, but it is something to monitor during the next quarter," he said. "It could be that the supply of resales is high enough that the resale prices are entering an adjustment mode. But not to worry. It is not a long-term trend that will alter the overall Las Vegas market demand."

Smith said the resale price in Las Vegas was static until January 2004, when it began a steady climb from about $175,000 to $251,000 at the beginning of this year.

"This might be a good argument for those who believe our housing market was undervalued and was just catching up with West Coast prices," he said. "Maybe."

David Ehlers, chairman of Las Vegas Investment Advisors, suggests that Las Vegas residential real estate in general and high-rises in particular may be "on the verge of a major upheaval."