In two separate reports this week, Nevada's stellar job growth was touted as pacing the nation.

The Federal Deposit Insurance Corp. on Tuesday issued its Summer 2005 Nevada State Profile. In the report, the state was singled out for its nation-leading 6.7 percent job growth rate in the first quarter.

Las Vegas also was singled out for creating jobs at a rate of 7.6 percent in the quarter.

A day earlier, UNLV economist Keith Schwer also pointed to the state's better-than-expected economic expansion coming off record growth in 2004.

"We are still doing quite well," said Schwer, director of the Center for Business and Economic Research and author of the Midyear Economic Outlook 2005.

Based on the region's performance so far this year, Schwer is now expecting 2005 employment levels to increase by 8 percent over 2004 to 876,699. The midyear forecast also predicts Southern Nevada's population will hit 1.83 million by year's end, up 4.5 percent from 2004.

Gaming revenue also is expected to surge 6 percent from last year to $9.23 billion.

The state's good times, however, did not come without a big negative: The declining affordability of housing.

Since the fourth quarter of 2003, FDIC statistics showed double-digit, year-over-year housing appreciation rates in Nevada. With the biggest gain coming with a 37 percent year-over-year jump in the third quarter of 2004. During that time, however, the greatest gain in per capita personal income came with a jump of 6.1 percent in the fourth quarter of 2004.

"Annual home price appreciation in Nevada moderated slightly in the first quarter 2005, but gains still ranked first nationwide," the FDIC report said. "However, home price growth far outpaced increases in per capita personal income, suggesting continued declines in housing affordability."

Barbara Ryan, associate director of the FDIC's Division of Insurance and Research, said that the run-up in Nevada home prices caused affordability in the state to decline by 24 percent.

Richard Brown, chief economist for the FDIC, emphasized that while Nevada's situation is dramatic it is not uncommon. He said several metropolitan areas along both coasts and Florida are experiencing similar booms.

"It's not unprecedented," he said, also indicating that a housing boom does not mandate a bust. In fact, Brown said busts are almost always accompanied by "severe economic distress," such as oil market collapses or military cutbacks.

Should a correction occur in the Las Vegas -- or Nevada -- market, it is more likely to come slowly.

"There's a question with affordability. Are prices likely to snap back suddenly?" Brown said. "It usually happens with what we call a sticky downward. People are reluctant to part with their homes at depressed prices. Then the disparity is resolved through periods of stagnation, allowing incomes to catch up with prices."

"Now, that may seem like a bust for people who can't sell their homes," Brown added.

The FDIC report pointed to investors and speculative transactions as a significant factor in rising home prices.

"DataQuick Information Systems estimates that investors who re-sold homes within six months accounted for 11.5 percent of Las Vegas-area home sales during first quarter 2005, versus 2.4 percent 5 years ago," the FDIC report said.

The national average for speculative transactions in a market is 3.7 percent, the FDIC report said.

Schwer agreed that the housing market does not appear to be a bubble ready to burst. He also indicated that affordability appears to be a long-term issue rather than raising the spectre of a sudden correction.

Schwer's report pointed to an overall cost of living index score for Las Vegas at 112.7 in the fourth quarter of 2004. The housing cost of living was 122.5 for the same period. The national average for both indexes is 100. Phoenix, a chief competitor for economic development efforts, was below the national average in both indexes.

Schwer said -- and FDIC researchers agreed -- that the continued migration into the state and the persistent job growth should support home prices. But other local economic efforts could be hampered, Schwer said.

"No doubt, affordability is a concern for us," he said. "Housing affordability will make (economic) diversification more difficult."

Regardless of long-term concerns, Schwer remained bullish on Southern Nevada.

Schwer also pointed out that his optimistic 2005 projections for Southern Nevada come amid a "soft-growth period" nationally as oil and housing prices weigh on consumers.

While the rate of increase might be down from 2004, Schwer said Southern Nevada still manages to pace the nation.

"At this rate, you're still going to win," he said. "It's just a question of how fast you're going to go."

Such national concerns played out locally in modest increases in tourist traffic, the UNLV outlook said.

The report showed that first-quarter visitor volume was up a "modest" 1.4 percent from the same 2004 period and that April increases were no better.

"To be sure, this low growth may be attributable, at least in part, to higher gasoline prices affecting both air and highway travel," the report said.

Schwer also said that the low numbers could be blamed on some visitors postponing trips until after the opening of Wynn Las Vegas. He also pointed out that while visitor volume is weak, gaming revenue is growing at a record pace, suggesting that "visitors are spending more per capita in Las Vegas."

Kevin Rademacher is a reporter for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.