The future site of the Fontainebleau on the Strip, a project that will include condominiums, is seen June 23 from atop Sky Las Vegas. A newly issued report by the Federal Deposit Insurance Corp. shows sales of existing homes and condominiums dropped in the first quarter. Photo by Jeff Scheid.

Relentless job creation in Nevada could start to "place upward pressure on wages," the Federal Deposit Insurance Corp. concluded in an economic report released Thursday.

Nevada ranked first in the nation for job growth for the 13th consecutive quarter with employment gains of 6.2 percent. That helped drive unemployment to a 30-year low of 3.7 percent in this year's first three months, the FDIC said.

"The tightening job market likely contributed to the recent rise in (per person) income for Nevada residents," the FDIC said. The 2006 income level was $36,530, about the same as the national average. "And, going forward, (Nevada) employers may need to increase wages to attract qualified workers," the federal agency said.

Although the FDIC mentioned reasons for caution, the report was mostly upbeat about prospects for Nevada.

"There's still a shortage of land and still people are moving here," said Bill Martin, chief executive officer of Nevada State Bank. "As long as that prevails, I don't see the market slipping."

Michael Metz, chief investment strategist for New York-based Oppenheimer, said there's already reason for caution. The nation's economy depends on strong consumer spending, but consumers have been using their homes to borrow and spend, because "real wages are not rising, they're really rather stagnant," Metz said.

Declining home prices could diminish homeowners' appetite for more debt, he said.

"I think we're headed for a slowdown because the consumer will be less willing to leverage," Metz said.

For the moment, tourism-related businesses are thriving in Nevada partly because the average visitor is more affluent than a few years ago, the FDIC said. Some 79 percent of Las Vegas visitors last year reported household incomes exceeding $40,000, compared with 66 percent in 2003.

"This shift to visitors with higher incomes may lessen the state's vulnerability to weakening consumer finances or rising energy prices, two trends that may affect lower-income individuals more severely," the FDIC said.

About 10 million people visited Las Vegas in this year's first three months, 1.8 percent more than a year ago.

The housing market, another key pillar in the local economy, is slowing despite a continuing increase in prices. Sales of existing homes and condominiums dropped. Home and condo sales fell to an annualized pace of 79,600 units, 15 percent lower than the first quarter last year and 37 percent lower than the first quarter of 2004.

Yet Nevada home prices appreciated 17.1 percent in the first quarter, down from 32.8 percent one year ago.

The FDIC noted that National City/Global Insight reported that home prices in Las Vegas, Reno and Carson City appear overvalued in the context of economic fundamentals. National City reviews home prices in comparison with household incomes and other factors such as population densities, cultural attractions, expected price appreciation and schools.

The apartment rental market grew stronger with the conversion of rental units to condos, Property & Portfolio Research reported.

"However, Las Vegas multifamily vacancies could rise if the converted condominium units return to the rental pool because of rising interest rates," the FDIC said.

The agency implied that higher interest rates could cause owners to sell or to lose their condos in foreclosures.

Totals for bank commercial real estate loans, a category that includes construction and development loans, continued to grow. Nevada banks reported the second-highest concentrations of those loans nationally, the FDIC said.

Commercial real estate market conditions are improving generally around Nevada. Vacancy and rental rates for Las Vegas official and industrial properties continue to improve, Torto Wheaton Research reported. These conditions may lead to more industrial and office construction projects.