In some cases, builders have made little or no profit by selling homes during the housing slowdown. But the question is, if that's the case, why don't builders shut their operations down and wait for the market to rebound?

Well, according to some of the analysts monitoring the Las Vegas housing market, builders have essentially done that. There is somewhere between a one-month and two-month supply of new homes — considered a small amount in the industry.

Builders are on pace to construct fewer than 21,000 homes by the end of the year, which is 46 percent off a high of 38,782 in 2005. They are also on pace to take out fewer than 15,000 building permits, less than half of the 30,149 issued in 2005.

But why not cut back production even further?

With the launching of master-planned communities, the last thing builders said they want to do is stop, even if they are chewing up land and making little or no profit from sales. They need communities to be established so when the market does rebound, they can position themselves and make up for the losses later on.

Builders can't close their doors when sales are going poorly as they need to sell homes even if they are not profitable, said John Burns, a California-based national housing expert.

"You have interest on loans to pay back and people you have to pay and you have expenses," Burns said. "They will bring in revenue. Whether they are making money or not, they have to recoup as much as they can to pay down their debt so they can be in great shape to buy land."

An example of what's happening in the market is with Las Vegas-based private builder Astoria Homes. The company is holding its first sale this weekend in its 12-year history by discounting homes as much as $200,000 and offering homes as low as $112 a square foot when they have been in the $140 to $150 foot price range.

Astoria Homes President Tom McCormick said companies like his stand to gain little by shutting down their operations even if they save their supply of land for better conditions.

"We have good people and for us to keep those people, we need to keep selling homes," McCormick said. "This market will turn around, and when it does, I need quality people. That is why we win awards."

During the market peak, McCormick said, Astoria was selling 100 homes a month and now it's down to 30 to 40 homes. Since the credit crunch started in the fall, there have been fewer buyers, but he said he hopes things are picking up, since September was the best month since February.

"I think people have a sense that prices feel fair again," McCormick said.

McCormick said Astoria has no plans to lower prices even further and even this drop is a temporary one to move inventory comparable to a car dealer's year-end clearance sale to prepare for new models it will be building.

"It is a way to bring on our new product," McCormick said. "You can continue to build the same homes and continue to cut prices and undermine your own prices or bring something fresh and exciting," he said. "Even as successful as the Honda Accord is, they update it every few years."

Buyers will see a much higher-level design with finer detailing, McCormick said. In some cases, there will be three-story homes built where there were only two stories. Some subdivisions will have more open space, and in some neighborhoods there will be smaller and more affordable homes. People have even gotten to the point they won't buy a home until it is finished, he said.

"It is risky," McCormick said. "It is much easier to stick with what you have, but I think there are huge opportunities right now. One of the benefits of being a private (company) is that you can move faster."

The one downside of cutting prices is that it angers buyers who've already purchased in the subdivision at a higher price.

McCormick said existing homeowners don't like it but at the same time you try and convince them this is a marketwide issue. They don't want to see subdivisions sit idle either and want further growth in their neighborhoods. They understand prices will return.

"This is not one builder undercutting everyone. Even if we don't lower our prices, people are selling at lower prices. We are very careful not to lead the market in price cuts."

McCormick said the prices of existing homes, whose cuts have lagged those of builders, must come down if people want to sell them given the record level of inventory on the market. It's tough for people to sell a home for $350,000 knowing it was once worth $400,000, but they have to look at the bigger picture.

With price cuts and incentives offered by builders, they can make up that $50,000 they lost and even more by purchasing a new home now, he said.

"We are cutting prices as low as we can, and this is the best price we ever offered, but I can tell you that after the sale is over, prices are going to go back up," McCormick said.

In other news

• Sotheby's International Realty Affiliates announced that Dyson & Dyson Real Estate Associates, a luxury real estate company in Las Vegas, has joined the Sotheby's International Realty network. Owned by Bob and Loraine Dyson, the firm will now do business as Dyson & Dyson Sotheby's International Realty. The company has one office on West Sahara Avenue and another in Green Valley.

• The Vertical Lifestyle Coalition will hold its first Live It Up Tour, a four-day event, to show people with it's like to live in a mid-rise development. The tour begins Oct. 11 and runs through Oct. 14. The properties hosting the event are Boca Raton, Brickwater, C2 Lofts in Summerlin, Juhl, Luxe Lofts, Manhattan West, Paxton Walk, Promenada at Rainbow, Stephanie Village, the Mercer and Vantage Lofts. The event will contribute to the Keep Memory Alive Foundation. More information is available at www.liveituptour.com.

• The average price of a home in Las Vegas at $362,188 is more affordable than the national average of $422,343, according to a survey done by Coldwell Banker. The company evaluated 2,200-square-foot homes with four bedrooms in 394 markets across the country and Puerto Rico and Canada. No. 1 on the list was Beverly Hills, Calif., at $2.2 million. That was followed by Greenwich, Conn., and the California cities of La Jolla, Santa Monica, Newport Beach, Santa Barbara, Palo Alto, San Mateo and San Francisco. Boston was No. 10 at $1.3 million. The most affordable is Killeen, Texas, at $136,725. Las Vegas' price of $22,312 lower than Reno.

• Sullivan Square in the southwest Las Vegas Valley off the Las Vegas Beltway announced it's making residences in its second tower, Madison II, available for sale earlier than scheduled. Throughout its 20 floors, Madison Tower II is offering 176 units with 27 floor plans ranging in size from 641 to 1,900 square feet. Prices begin in the low $300,000s and go up to $1.8 million. When completed, it will have 1,300 residences.