One national builder has called the third quarter "one of the most difficult in homebuilding history."

When Congress and the Bush administration enacted a housing stimulus bill in July, many expected the bill's main provision, a temporary $7,500 tax credit for first-time homebuyers, would help the industry.

That hasn't been the case, especially in Las Vegas where new-home sales in July (731) and August (792) were the weakest of the year. September is likely to be even worse because of the meltdown on Wall Street and tight lending standards hampering the ability of many potential buyers to obtain mortgages.

Builders are facing continued competition from foreclosed homes, which is bringing down the price of existing homes to $200,000. New-home prices fell below $260,000 in April, but have steadied since, landing at $253,000 at the end of August. That gap between new and existing homes had been as little as $28,000 in April.

Through the end of August, new-home closings were down 49 percent compared with the first eight months of 2007. In contrast, existing home closings were up 5 percent, according to SalesTraq.

"All you have to do is look at the numbers, and you can see the (stimulus) has not helped the housing market," said Steve Bottfeld, executive vice president of Marketing Solutions. "It didn't have a huge impact."

Without the Wall Street meltdown, Bottfeld says it could have made a difference, but the dynamics of the market have changed.

"The tax credit can't get you a mortgage, and that is the key issue on whether you can buy a home," Bottfeld says.

Bottfeld, one of the biggest cheerleaders for the housing market, says he remains concerned about where the market is heading because he thought prices would start rising by the fourth quarter and first quarter of 2009.

A Wall Street bailout package will help the housing market because it should give buyers access to loans. It will slow down foreclosures because owners will be able to refinance, Bottfeld says. More important, it begins to restore confidence because people will realize prices are bottoming out, he says.

"Until prices go up, we are still going to be in a recession," Bottfeld says.

What the bailout won't do, however, is address the long-term concerns of what triggered the need for the bailout in the first place, Bottfeld says. Housing needs to go back to being treated as shelter rather than a commodity, he says.

"This bill is not doing that," Bottfeld says. "I love investors to death. They were 20 percent of the Las Vegas market up through the boom, but speculators are deadly because they don't give a damn about the neighborhood. All they care about is turning a profit fast."

The value of building permits issued by Las Vegas has dropped 27 percent through the first three quarters of 2008 compared with the same period in 2007.

Through Sept. 30, $588 million in permits were issued, down from $809 million a year earlier. The biggest decline has been in new-home permits, whose numbers declined from 1,941 last year to 939 this year. The value dropped from $230 million to $103 million. New-commercial construction fell sharply from $344 million to $120 million. The category showing the most improvement was the construction of apartment complexes with $134 million in permits issued compared with none a year ago.

In September, the value of permits fell 20 percent to $34 million, down from $43 million a year ago. There were $11.3 million in new-home permits compared with $10.8 million a year ago and new-commercial construction was $9.2 million, up from $7.6 million a year ago. The category that recorded a decline was duplex construction, which fell from $9.2 million a year ago to zero.