The above chart shows price appreciation and depreciation in the Las Vegas residential real estate markets since 2001.  On average Las Vegas historically had a 5% price appreciation rate year over year until the boom in 2004. 

If the historical increases hold true and prices continue to fall it looks like we will hit a true un-inflated value of residential real estate some time in the first quarter of 2008.  This however does not automatically eliminate the over supply of home on the market.  It is very possible that in the short term prices will fall below the average appreciation line until surplus inventories shrink significantly. 

For those Buyers sitting on the side lines waiting for prices to re-adjust, this is good news as the wait may be only 3 to 6 months more. 

Remember as the new mega resorts on the Strip begin opening,  job growth will begin to spike.  Economists estimate for each new hotel room that opens in Las Vegas 6 new jobs are created to support it.  These jobs would include not only maids, casino, entertainment and restaurant jobs but also maintenance and support services for the workers that fill those jobs. 

This will create more people looking for home ownership at the new lower home prices decreasing excess inventories and eventually driving Las Vegas home prices towards appreciation once again.