Forty-eight high-rise condos closed escrow in May, including 40 at SoHo Lofts, above, at Las Vegas Boulevard South and Hoover Avenue. Photo by Gary Thompson.

The housing market in Las Vegas is entering a period of extraordinary transition with the first real influx of high-rise condominium sales in May, a local researcher said Wednesday.

Larry Murphy, president of SalesTraq, said May's housing statistics offer "intriguing clues" as to why the much ballyhooed housing bubble has not burst in Las Vegas.

While the inventory of homes for sale reached an all-time high of 20,515 in May, about double from a year ago, it's a supply of six to seven months based on sales through the Multiple Listing Service. That's a relatively healthy market, Murphy said.

Prices have yet to diminish, as many predicted at the beginning of the year, he said.

Median resale prices are hovering around their all-time high at $284,950, a 5.5 percent increase from May 2005, and new home prices jumped 11.8 percent to $324,757. The number of new home subdivisions in the market declined for the second consecutive month.

Forty-eight high-rise condos closed escrow in May, including 40 at SoHo Lofts in downtown Las Vegas. That compares with 64 total sales in 2005 and 11 through April of this year.

"While the number was relatively small, it's a harbinger of things to come," real estate consultant Steve Bottfeld of Marketing Solutions said. "They're going to be closing all of building one at MGM Residences, 580-some units over the next two to three months. Panorama is closing, SoHo, Sky (Las Vegas). So suddenly this has all been coming and coming and now it's here. Start looking for that to be a regular and increasing number."

Combined with the slowdown in sales of lower-priced condo conversions, the uptick in high-rise sales will drive home prices significantly higher by the end of the year, he said. There were 352 condo conversion sales in May, a 29 percent decline from a year ago and less than half of January's sales.

Bottfeld forecast a drop in condo conversions at SaleTraq's housing seminar in January. He said the slowdown in conversions would push vertical construction, particularly midrise, to the market's forefront over the next two to three quarters.

The number of high-rise units coming onto the market will continue to rise as the first wave of new projects are completed, said Aaron Yashouafar, developer of the 45-story, 409-unit Sky Las Vegas condo tower on the Strip.

"Obviously, this is going to shoot up total sales volume in the Las Vegas area," he said. "This is a very exciting time for the Las Vegas residential market."

New home closings rose by a fraction in May from the same month last year at 2,933, according to SalesTraq. Year-to-date new home sales are up 8.9 percent. On the other hand, existing home sales are down 9.8 percent for the year. There were 4,163 resales in May, a 17 percent drop from a year ago.

Murphy said the big story is the number of incentives being offered by builders, including paying higher broker commissions, putting in free upgrades and paying for closing costs. "The list is getting longer every day, and for the last two months incentives are getting bigger," he said.

The first clue that there is no housing bubble in Las Vegas is price stability over the entire year, Bottfeld said. Price appreciation has dropped in markets such as Phoenix, Denver and San Diego, according to the Office of Federal Housing Enterprise Oversight. Over the fourth quarter of 2005 and the first quarter this year, appreciation in the Las Vegas market has risen.

Secondly, the new-home market in Las Vegas is beginning to compress in response to market conditions, he said. With fewer new home communities, the resale inventory will be absorbed quickly.

Murphy is less optimistic.

"This inventory will be with us for the rest of the year and will moderate the prices," he said.