Las Vegas has been in the top rankings as one of the fastest growing communities for many years. Nevada is one of the few states that does not have a state income tax and is a business friendly environment to relocate. By California standards, Las Vegas has always been a bargain in the housing market. Investors from California have been buying homes here for many years. Investors have told me that they are not really looking for positive cash flow rentals but for appreciation. They purchase homes in the best areas of the city for the price range, and plan on holding them for 3 to 5 years. They feel that if they can break even on the rent, they are happy. Home prices saw a dramatic increase in 2004 and 2005. Many of the more desirable communities saw home prices almost double. A lot of investors started buying up homes during this time. Home loans were easy to get and many of these homes were purchased with 100% financing, no income verification and very little concern by the banks if the buyer could actually afford the property. Everyone thought that the prices would continue to go up and the economy was in good shape. Well, of course we all know what has happened and where we are at today. Many of these homes were also purchased with an adjustable rate mortgage. The payments started out low and the investors thought that they could sell or “flip” the property before the payments increased. As the values started to decline and the payments increased, the investors had no choice but to walk away and let the banks foreclose. Las Vegas will continue to stay at the top of the list for bank foreclosures until this inventory is sold. My guess is 2 more years. This does not mean that home prices will continue to go down. It will become a supply and demand issue and as more of the homes sell, the prices will start to go back up. The economy of the United States depends on the housing market getting back on tract. Las Vegas should be one of the first to see this correction. If you are a buyer, your ship has just come in.