It's become a familiar refrain.

Housing in Las Vegas is woefully overpriced. Home builders have created too much inventory, and investors desperate to flee the market are dumping entire subdivisions on the resale market. The supply glut will send home values in Southern Nevada tumbling in the next few quarters, perhaps as much as 8 percent. Or 9 percent. Or 21 percent. Or 28 percent.

The local real estate market has thus far held steady, but that hasn't stopped a prominent national publication from delivering fresh prognostications of housing doom and gloom in the Las Vegas Valley.

Fortune magazine's soothsayers, who include analysts from Moody's Economy.com and Fiserv Lending Solutions, are predicting that housing prices in Las Vegas will fall 6.6 percent in 2007, and shed an additional 8.1 percent in value in 2008.

By Fortune's reckoning, Las Vegas in the next two years will turn in the second-worst housing performance in the nation -- worse than Bakersfield, Calif., worse than Los Angeles, worse than Miami, worse even than Oakland, Calif., and Fresno, Calif. Only Stockton, Calif., will post higher value losses than Las Vegas, the magazine said.

Charmaine Buskas, an economist with Moody's Economy.com, said the rapid run-up in housing prices in 2004 and 2005, when local housing values nearly doubled, coupled with flagging demand for homes in coming months and years led to the company's forecast of falling home costs in Southern Nevada.

"Las Vegas was one of the most frothy markets in the United States (in 2004 and 2005), and a lot of that price appreciation was due to speculation," Buskas said. "There were a lot of second-home purchases for investment purposes. With a cyclical peak in interest rates, those investment properties were rapidly sold off, and that triggered a broad-scale slowdown in price appreciation. With weak demand fundamentals going forward, we expect the correction in the housing market will continue to progress."

Local real estate analysts don't discount Fortune's predictions out of hand.

"Anything is possible," said Larry Murphy, president of the Las Vegas real estate research firm SalesTraq. "I don't make fun of anyone for their predictions."

Murphy said he's especially wary of the amount of inventory sitting on the Multiple Listing Service, a computer database that the Greater Las Vegas Association of Realtors operates to account for all the homes its members have on the local market.

The service had 17,834 listings in December, a 33.3 percent increase over the number of listings posted in December 2005. And Murphy's research found that 44 percent of those homes for sale are vacant, likely because they're investor-owned.

"We still have a much-higher-than-normal number of investors holding vacant homes," Murphy said. "Prices could go down in 2007, and if we were going to ascribe one reason to (a decline), it would probably be the number of vacant listings."

And Tim Sullivan, president of San Diego-based Sullivan Group Real Estate Advisors, said Las Vegas housing prices are due for a correction following the big spike in prices two years ago.

"Affordability got way out of whack, and it's become very difficult to find product for the entry-level marketplace," Sullivan said.

But watchers of Las Vegas real estate also said Fortune's crystal ball might need a little dusting off. This isn't the first time the magazine's January numbers have augured a troubled year ahead for Las Vegas real estate.

Fortune said a year ago that housing prices in Las Vegas would plummet 8 percent to 9 percent in 2006. But that didn't happen: Prices overall were up in Las Vegas through November, SalesTraq's most recent data show. The median new-home price surged 12 percent, from $303,523 in November 2005 to $339,888 in November 2006. The median was also up 12.4 percent from January through November when compared with the first 11 months of 2005. The median resale price rose 1.8 percent, from $280,000 in November 2005 to $285,000 in November 2006. Comparing the first 11 months of 2006 with the first 11 months of 2005, the resale median rose 5.5 percent.

After posting appreciation in the low single digits for most of 2006, the Greater Las Vegas Association of Realtors' numbers turned in a slight decline in December. The median price of a single-family home in Las Vegas was $306,100 at the end of 2006, down 2 percent from a year earlier. The association's sales data reflect only homes its members sold.

Buskas said the Las Vegas bust that Fortune predicted didn't materialize in 2006 because the national and local economies performed better than economists expected.

"One of the things that took us by surprise was how well the national economy held up, even in the face of a cyclical peak in interest rates," Buskas said. "Certainly, the gaming industry was an important leader for the Las Vegas economy, which held up reasonably well in 2006. In the beginning of (2006), we were expecting a larger decline in the gaming industry, which would have had an impact on housing demand and house prices."

Nevada's largest hotel-casinos posted a net income of $2.1 billion in the fiscal year ended June 30, numbers from the Nevada Gaming Control Board show. That income was 17 percent higher than income earned in fiscal 2005.

"Our expectation was more to the downside, and we were proven wrong by the simple buoyancy of the economy," Buskas said.

Economists won't make the same mistakes in 2007, Buskas said.

Interest rates have spent a full, additional year at a cyclical peak, she said, and the nation's economic expansion is another year older. Consumers are also a year further down in their purchasing ability, she added.

"The longevity of the expansion simply suggests that there's less room for an upside surprise," she said.

Local real estate analysts aren't predicting any upside surprises either, but they said they don't expect a precipitous drop in valuation.

"Worse than Fresno? Sorry, I don't see it," Sullivan said.

Sullivan added that marketwide predictions of depreciation didn't make sense.

"You need to zero in on product types and geographical areas," he said. "If we're talking about detached homes for under $300,000 (in Las Vegas), we're not going to see prices in that market go down 15 percent in the next two years."

Murphy said Fortune's numbers were off in 2006 because economists outside Las Vegas take too simplistic a view of the market's dynamics.

"I maintain they just look at how much prices went up in 2004 and 2005, and they back into an equation that says homes are obviously overpriced and have to come down a certain fraction of that increase," he said.

Missing from such an analysis, Murphy said, are two key factors: Population growth and job formation.

Murphy pointed to reports showing that 7,000 people a month continue to flock to Las Vegas. The state's Department of Employment, Training and Rehabilitation predicts Nevada's employment growth will come in at 5 percent in 2007, spurred in part by the addition of several thousand hotel rooms on and around the Strip.

"(National economists) ignore the fact that we have continued strong demand for housing in Las Vegas," Murphy said. "If we don't build about 36,000 new homes a year, those new residents will be sleeping in their cars."

Clark County Assessor Mark Schofield said population and employment growth should help prop up the city's real estate prospects in 2007 and 2008. He said Fortune's depreciation numbers "sound excessive."

"We're not seeing significant drops in values. What's happened here is the market has corrected itself, and I think it's just about through doing so," Schofield said. "I'm telling people that I believe within nine months to a year, we're going to start seeing normalized appreciation of half a percent a month, or 6 percent a year."

Buskas agreed that population expansion and job creation could bolster the city's housing fortunes, but she called those factors "long-term drivers." Both indicators look "quite good" for Las Vegas, she said, but not in the short range thanks to a glut of investment properties that still languish on the market.

Also reducing the odds of a noticeable correction in 2007 is a dwindling overall supply of homes, Murphy said.

Though the Realtors' association has more listings on the market than it had a year ago, the number of existing homes for sale has plummeted in recent months, from a high of 23,474 homes in October to 17,834 units in December.

What's more, local home builders are obtaining fewer permits for construction of new properties. Builders pulled 27.2 percent fewer permits in the first 11 months of 2006 than they did in the same time period in 2005, including year-over-year permitting drops of 54.5 percent in September, 63.4 percent in October and 63.8 percent in November, according to SalesTraq's data.

Just two of the city's 20 biggest builders pulled more permits in 2006 than they had sales, Murphy said. One major national builder with a local presence has instituted an "inventory-neutral" plan that will require the company's local managers to have equal numbers of pulled permits and written sales contracts. The builder now has just 17 homes in its standing inventory, he said.

"We may be in the process of creating the next housing shortage by virtue of the permits we've not pulled, and by virtue of everybody trying to get to some inventory-neutral scenario," he said.

Buskas acknowledged that falling housing supplies could rein in price drops in Las Vegas in coming months. But she said she stills sees a "fairly orderly correction" in store for the city's housing market in 2007.

Murphy is predicting a flat year for housing appreciation in Las Vegas.

"The market will be moderated by the fact that we have a lot of inventory, and the fact that 44 percent of our resales on the market are vacant," he said. "If it weren't for that, I'd be bullish. That vacancy rate keeps me less than ecstatic about 2007. That's where I see a flat scenario, but no bursting bubble."

Buskas said Las Vegans shouldn't worry too much about the toll faltering home values might take on the Las Vegas economy.

Softening housing prices would improve housing affordability, and that would mean more of the city's new residents could purchase a home without the "exotic mortgages that propped up the market in 2004 and 2005," she said.

Existing homeowners might be disappointed to learn that lower home values won't translate into lower property-tax bills.

The Nevada Legislature passed a property-tax cap of 3 percent in the 2005 legislative session. The tax ceiling took effect in the 2004-05 taxation cycle, just when appreciation was going on its double-digit tear. Thus, taxes remain well behind values, Schofield said.

The Review-Journal ran a formula in November that showed property taxes increasing even as actual values fall.

A house with a taxable value of $136,160 in 2004-05 would have posted a tax bill of $1,404. Even as the home's value nearly doubled in the next two years, the property tax would have increased just $86, as a result of the tax cap.

In 2006-07, the home's value will decrease by $7,300, but the tax bill will grow by $44 as the tax tries to catch up to the value.

"Because of the extraordinary appreciation we had, it would take years to catch up to the relief provided to homeowners," Schofield said. "But I guarantee that 99 percent of the time, homeowners are still going to see pretty dramatic savings from the cap, as opposed to if the whole tax rate were applied."