During the first six months of 2004 many real estate investors flocked to Las Vegas to invest in the real estate market and drove prices up an unprecedented 35% in some parts of the Valley. Much of this invested money was out of the California market where real estate investments had hit a ceiling due to high prices and a now field of investment was being sought. Perceptive California investors were liquidating their properties in order to take advantage of the better cash returns Las Vegas could offer. Most new homebuilders quickly placed a moratorium on investor purchases to prevent future competition from buyers who flipped their new home purchases and cashed in on quick profits.
A scarcity of vacant land for developers to build on and a continuing influx of over 6,000 new Las Vegas condos a month quickly turned the estate market of las Vegas into a battlefield for buyers who ended up in multiple offer situations as they competed for a dwindling supply of homes.
More Las Vegas condominium homes sold for over list price in just a few months this past spring than in the previous five years combined. In late July and August however, the dramatic upward surge rapidly ceased, as new homes purchased by investors who were under contract before the moratorium was implemented, finished construction and went back on the market. In addition, local residents who had already toyed with the idea of moving out of state decided to cash in on the bonanza profits as well. Through the end of October the supply of Las Vegas condominium homes increased steadily, the sales settled back to a normal pace, and also the prices even decreased slightly as the market stabilized.