Jeff Simpson explains that the economic sky is not falling despite some clouds

By Jeff Simpson

Sunday, Jan. 21, 2007 | 7:19 a.m.

Thousands of Las Vegas business executives will spend $80 each on Thursday to attend Preview Las Vegas at the Thomas & Mack Center - $60 if they are members of the Las Vegas Chamber of Commerce.

I've enjoyed more than a few of these sessions, part business seminar, part civic pep rally, and I'm sure this year's event will be worthwhile as well.

Today I've decided to contribute my own Preview Las Vegas in column form, an advance Cliffs Notes version of the real thing.

Many folks undoubtedly want to know whether the housing slump will persist throughout 2007, and how long it will be before rapid real estate appreciation returns.

I think 2007 will be better than 2006, with a sluggish housing market improving by the end of this year and turning hot in 2008.

Chicken Littles who worried that our overheated real estate market in 2003, 2004 and early 2005 would result in a giant burst bubble, with sharply dropping real estate values, will be proven wrong.

The Las Vegas residential real estate market, including houses, condominiums and condos converted from apartments, benefited from strong investor interest in the market during its peak.

With a glut of properties available for sale and more attractive prices available elsewhere, much of the investor interest has cooled in the broader market, although high-end, Strip-area condominiums retain their investor appeal.

That cooling of investor interest doesn't mean that real estate values are getting ready to nosedive, however, as Las Vegas has a couple of aces in the hole.

Those are our population growth and an awesome pipeline of fantastic billion-dollar-plus resorts that will keep our construction and employment engines humming.

While our population growth may have dropped back one slot from our recent record of being the fastest-growing market in the country, being the second-fastest-growing market in the nation provides plenty of new income and additional demand for homes, condominiums and apartments.

Naturally, that growth also generates a lot of other business in greater Las Vegas.

The valley's top economic engine, of course, is the casino industry, and the next five years will produce the biggest period of resort growth in Las Vegas history, measured by invested capital.

With Palazzo scheduled to open next to its sister property Venetian by the end of this year, and Encore opening next to its sister Wynn Las Vegas by the end of 2008 - two ultra-high-end properties that each cost close to $2 billion - the stage will be set for two mammoth projects to follow.

MGM Mirage's $7 billion Project CityCenter and Boyd Gaming's $4 billion Echelon Place will signal a new era on the Strip corridor, with intensive development, a mix of high-end hotel brands and technical innovation fueling what will undoubtedly be incredible lures to our city's tourism corridor.

And there are plenty of other resort and condominium projects slated to be built, on and off the Strip.

With the new jobs created by the building and staffing of these new projects and the services the valley's newcomers will demand, the Las Vegas real estate and economic outlook is rosy, indeed.

That doesn't mean there are no concerns. Our transportation networks need investment, including improved roads and a new Ivanpah airport, and we should not underestimate the potential hit Las Vegas would absorb in the event of a terrorist attack or a dramatic downward turn in an already-tense world.

But, for now, the sky isn't falling for the Las Vegas real estate market and economy - it is sunny and blue, with only a few clouds on the horizon.