Las Vegas Market: Is this the year for turning the corner?

Implications: It is entirely believable that 2007 will be the year for Las Vegas starts to return to the kind of growth folks here have come to expect. The investors are gone, new home inventories are shrinking and the resale inventory is poised to be brought in line this year.

The kinds of new home incentives that buyers have become accustomed to will soon be a thing of the past! I think it is safe to say"buy now" or forget looking for all the freebies that the builders are giving away today.

Many of the builders have either used the land that they inventoried or some even sold off in a hurry, to compensate for the lack of sales. Are we going to be proven shortsighted? Will the BLM bring their prices back to reality this year? My guess is probably not! So look for things to gradually swing back to somewhat normal by mid to third quarter and my prediction, a frenzy by late 2007, into early 2008. Not like we have seen in 2004-2005 mind you, but a frenzy nevertheless.

Analysis: By late 2007 we should see builders go to the well for building permits and the cycle begins all over again. Building permits are down substantially in 2006 and YTD. Brace yourself for an upsurge in permits by end of year.

As inventories of new homes shrink and get depleted, buyers will shift to the large inventory of resale homes. Many of these homes have never been lived in. Could they represent the next phase of "good buy"? When that inventory starts to come in line, we should see a more normalized market.

If the economy continues as robust as it has proven to be, we should have a rather glorious 2008, when the our President gets elected.