In August more than half of the 3,051 sales of existing homes were priced under $200,000, Smith says. He reported a median price of $200,000, a decline of $75,000 compared with August 2007 and a decline of $10,000 compared with July.

About 25 percent of the listings on the Multiple Listing Service are short sales in which owners are trying to persuade banks to allow the homes to be sold for less than what is owed on the loan. Of the 8,500 short sale listings, only 3 percent are under contract, Smith says.

"This demonstrates how most Realtors have been staying away from short sales," Smith says. "It is well known and talked about how the short sales can take three to six months and more just to get an answer from some lenders."

That is a large part of the inventory that needs to be sold and many of those homes could have been off their books months ago, Smith says. Many will end up going through foreclosure and likely be sold for less than they would have been as a short sale, he says.

"If homeowners could have had their mortgages redrawn or renegotiated, many of the homes probably would not be sitting for a year or more deteriorating other home values in their neighborhood."

Smith calculates the 3,051 sales of existing homes in August brings the yearly total to 18,720, a decline of 299 transactions or 2 percent compared with the same period in 2007. By his calculations, Smith says the August numbers are the first monthly decline since November, but he says it's too soon to say whether that is a trend.

The National Association of Realtors reported existing home prices suffered a record drop in August, but the inventory of homes continues to shrink. That trend reflects what's happening in the Las Vegas housing market as well. Nationwide, prices fell 9.5 percent to $203,100. What's different in Las Vegas is that sales of existing homes continued to rise, although they fell in the country as a whole.

Housing market consulting firm Metrostudy, which tracks the Las Vegas housing market, reports that in markets where sales have increased, the activity has been driven by "opportunists who are looking for bargains, particularly foreclosure properties," says Brad Hunter, Metrostudy's chief economist and national director of consulting.

"The surge in foreclosure buying at discounted prices is pushing median home prices lower," he says.

Job losses and weak consumer confidence have been preventing people who would actually live in the home from buying, Hunter says. Many are afraid to buy a home right now because they have lost money in the stock market and fear falling home prices.

"That has immobilized many prospective buyers, particularly in the middle to high end of the market," Hunter says.

Metrostudy reports the pace of new-home absorption has slowed with the pace of move-ins falling sharply.

"Home prices cannot stabilize until end-user housing demand firms," Hunter says. "It is a bit of a dilemma - buyers are waiting for a price bottom before they buy, but prices cannot revive until demand returns," Hunter says. "Still, there is some pent-up demand, and we have seen proof in recent weeks that when prices are attractive enough, people buy."

Lennar Corp., a Las Vegas homebuilder, reported that through the end of August, its nationwide sales plunged more than 50 percent, and executives say they are continuing to cut prices, reduce construction costs, cut jobs and consolidate divisions to improve profitability. Executives say the stimulus bill enacted in July that gave a $7,500 tax credit for first-time home buyers hasn't helped as the company reported its sharpest drops in its Western markets.

KB Home, meanwhile, reported its third-quarter loss quadrupled from a year ago with revenues dropping 56 percent.

The company reported half of the home buyers backed out of their contracts and blamed rising foreclosures and tight lending standards for the problems.