Jason Beaver of San Francisco followed some untimely advice from a friend who'd made a hefty profit flipping homes in Las Vegas.

He paid $350,000 for a three-bedroom, 1,500-square-foot new home in the Solera subdivision of Anthem last September, just weeks before the builder, Bloomfield Hills, Mich.-based Pulte Homes, lowered prices in several communities across Las Vegas Valley.

Pulte and a handful of other builders had to lower prices in response to an increase in inventory, which had slowed demand for new homes and curbed runaway appreciation rates that led the nation for the second and third quarters.

The business decision sparked a class action lawsuit from people who closed escrow on Pulte homes between Aug. 1 and Oct. 1, about two-thirds of them investors. Pulte cut prices by as much as $100,000 on Oct. 2.

Beaver's home dropped in price to $280,000. He's unable to cover his mortgage with the $995 monthly rent he collects from the home.

"There were shady practices," he said of Pulte's sales process. "They don't make decisions on a whim, on the spur of the moment. They had a bad quarter and they were trying to dump inventory. They knew what they were doing."

Las Vegas attorney Sean Claggett, who represents more than 50 Pulte homeowners, said required mediation has failed and the case will go to litigation.

"I was anticipating a settlement offer, but it never came through. Now it's out of the question," he said. "It's our position that Pulte's conduct was such that it misled buyers not only to the value of their homes but the type of community they were buying into."

Instead of socially active neighborhoods advertised by Pulte, buyers found "ghost towns" with signs in the yards of homes for sale and rent, he said.

Claggett said his clients are joining a class action lawsuit filed July 5 by attorney Tom Mehesan, who also represents more than 50 Pulte homeowners in the Anthem master-planned community. Between the two groups, the lawyers are seeking more than $10 million in damages.

Mehesan said he participated in five sessions with Pulte's lawyers and a mediator, but couldn't discuss settlement offers.

Total purchase price of the homes in Mehesan's case was $23 million and a preliminary estimate of actual out-of-pocket losses for his clients topped $5 million, he said.

Some people sustained six-figure losses because they couldn't afford to carry a mortgage on the home through litigation and had to resell right away, Mehesan said.

Greg Gilbert, Pulte's attorney, said only half the story is being told, that a lot of out-of-state investors jumped into the Las Vegas real estate market and skewed prices.

"I think there's more to the story than bad home builder treats home buyers in bad way," Gilbert said. "The reality is if you talk to other home builders, they'll tell you a similar thing on out-of-state investors. From a more objective perspective, there's a lot going on in the real estate market, as to whether investors have anything to do with it."

Mehesan said Pulte knew in July 2004 that a price cut was coming in October and continued to close escrow on homes purchased months earlier at the higher prices.

"What you're going to find is they (buyers) weren't told the right things when they bought and by the time they closed escrow, Pulte claimed they'd have $50,000 or $60,000 profit and it turned out not to be true," Mehesan said.