The housing industry was counting on the creation of thousands of jobs with the opening of new resorts to help lift the market out of its doldrums of the past two years.

The importance of the housing recovery on the valley's economy was emphasized in the latest report by housing market tracker Metrostudy. The Las Vegas Valley lost more than 6,200 jobs during the past 12 months, ending in June, compared with 9,400 jobs gained the previous year. The unemployment rate shows no signs of slowing by reaching 6.5 percent at the end of June, according to the firm.

"It is evident that the Las Vegas economy is slowly contracting," says Josh Seime, manager of Metrostudy's Las Vegas division. "The Las Vegas economy may be on slightly more shaky ground than the nation as the region's economy does not have a wide diversity of economic drivers."

Metrostudy continues to pin hopes on the opening of resorts on the Strip in 2009 in being the key to a full recovery.

Metrostudy reported the second-quarter inventory of existing homes at 16.9 months, which is higher than other calculations by analysts in the market. Even though inventory has fallen in the past year, it could reach new highs in the third quarter if trends in foreclosures and credit markets persist, Seime says.

The increase in sales of existing homes since January is because of sales of bank-owned properties, Seime says.

The median sales price of an attached existing home in Las Vegas was $149,000, a drop of 29 percent from a year ago. The median price of a detached home was $221,590, a drop of 33 percent, according to Metrostudy.

"The existing-home market will be the key driver of the overall Las Vegas housing market in 2008 and into 2009," Seime says. "Deep price reductions have fueled greater demand and sales activity."

Even though the current sales trends are positive, the existing-home market is expected to be highly competitive throughout the rest of the year, he says.

Even though 5,500 people move into the area each month, that hasn't translated into demand because many potential buyers are remaining on the sidelines because of the credit crunch and negative perceptions of the market, he says.

"Las Vegas is one of the fastest-growing cities in the U.S., and it's expected to remain so for a long time," Seime says. "This bodes well for the long-term outlook of the Las Vegas housing market. In the short term, however, builders are dealing with demand-related issues such as a lack of consumer confidence and constricted credit environment."

As for the new-home market, closings have exceeded starts since the third quarter of 2006, further reducing its inventory, the firm reports.

There were 1,840 new single-family housing starts during the second quarter, a 55 percent decline from the second quarter of 2007. In 2008's second quarter, 2,158 closings were reported, a decline of 49 percent compared with 2007.

All price segments have been affected by the slowdown, even the lower-priced homes where demand is the strongest, Seime says. Sixty-seven percent of the new housing starts were homes priced below $325,000 compared with 49 percent in 2007's second quarter and 41 percent in the second quarter of 2006, he says.

The inventory of new homes has fallen 62 percent since it peaked in 2006's second quarter. Vacant housing is an important tool for monitoring the health of the market, Seime says. As for the condo market, closings have dropped below new starts in the past two quarters. Las Vegas reported 296 starts of attached homes during the second quarter, a decline of 77 percent from the second quarter of 2007, Metrostudy reports.

In contrast, 1,193 closings were reported in the second quarter, a 15 percent drop from 2007's second quarter, Seime says.

Vacant lots have remained stable since the beginning of 2007, Seime says. In the 12 months ending in June, they have declined 1.4 percent, for a total of 31,193 lots at the end of June, a 48.3-month supply, he says.

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