Las Vegas Housing Starts Surge While New Homes Stand Vacant

Builders are in the process of putting up 1,100 new homes in Las Vegas. Does that mean it's good time to gamble on a new home in one of the nation's most depressed housing markets? Probably not.

Las Vegas has been one of the hardest-hit residential real estate markets of the past two years. More than 9,000 new homes are empty, and the foreclosures keep coming. Real estate prices are down by 60 percent from 2006.

But buyers want new houses, according to one builder: "We're building them because we're selling them."

There is a lot of truth in that statement, says David Crowe, chief economist at the Washington-based National Association of Homebuilders. The association's most recent survey, which polls its membership monthly to get its read on the market, reported its highest level of confidence in the housing market since August 2007. The survey asks builders -- mostly family-owned, local builders -- about their current sales, the amount of traffic they are getting in calls and model homes, as well as their expectations for the next six months.

"Older homes might not be as energy-efficient, or they have been abused," says Crowe. "If the cost to purchase an existing home and a new home are the same, many people will opt for the new home."

Still, with so many homes vacant across the U.S., does new construction in Vegas make sense?