There are 51,000 upscale condominium units either under construction or in the works in Las Vegas, according to Applied Analysis, but market observers suspect that many of those that have not yet broken ground will remain unbuilt.

The real estate research firm reports three canceled condo projects in the last year and five others whose futures are shaky.

Developers attribute failed projects to soaring construction and labor costs, the difficulty of securing financing, and the lack of demand for high-end units.

"There isn't enough wealth [in Las Vegas] for these prices," argues Molasky Group's Irwin Molasky, who says the market cannot be compared to New York or Miami.

Marcus & Millichap expects upscale condo prices to fall 15 percent or so in the coming year or so and notes that investors have inflated demand by purchasing upwards of 70 percent of available units in the hopes of reselling at a profit.

Despite weakness in the high-end condo market, Hanley Wood Market Intelligence reports that the Las Vegas market as a whole is benefiting from strong job growth, a robust economy, and demand for moderately priced single-family homes and condos.

Source: The Wall Street Journal (01/13/06); Corkery, Michael; Frangos, Alex