Completion of new space significantly outpaced absorption in every sector in 2001, but that started to turn around in 2004 and continued into 2006.

"Nothing lasts forever," Peter Korpacz of PricewaterhouseCoopers said during a four-hour presentation on the real estate economy.

"They (investors) recognize we're in a boom market, but almost to a person they're a little nervous, a little uncomfortable. Why? Low cap rates. There's only one way for them to go -- up -- and they get a little nervous. I'm always looking for that two-by-four coming up behind me and smacking me in the head."

Korpacz listed the top and bottom 15 markets in the United States based on capitalization rates in office, industrial, retail and apartments. Las Vegas did not show up in either of the rankings.

That's because Las Vegas is not a stable market for cap rates compared with Los Angeles, San Diego and Manhattan, Korpacz said.

"Investors are concerned about overbuilding and a bit of a condo problem," he said. "They recognize the high growth, but there's a little more risk."

Manhattan was the top office market with a cap rate of 5 percent and the Inland Empire east of Los Angeles topped the industrial market with a 6.1 percent cap rate.

The average price for office buildings nationwide increased from $130 a square foot in 2002 to $225 a square foot in 2006, while industrial property jumped 50 percent from $40 to $60 a square foot in the last two years, Korpacz said.

Stephen Laposa said investors need to look beyond the basic income capitalization formula and track underlying economic and demographic trends that drive real estate performance.

"(Comedian) George Carlin was right," Laposa said. "We all have our stuff and we need real estate to store our stuff."

The big question is where will the echo boomers live tomorrow, he said. Single, educated echo boomers are moving to regenerated downtown areas and central cities for the lifestyle, while married couples prefer to remain in the suburbs and live near good schools, Laposa said.

With 28 percent population growth from 2000 to 2006, Las Vegas ranked fifth on the list of fastest-growing U.S. cities behind St. George, Utah; Greeley, Colo.; Ft. Myers, Fla; and Bend, Ore.

"Densities significantly increase in high-growth markets. No doubt, land values increase too," Laposa said.

Foreign capital sources provided $18.4 billion for acquisition of U.S. real estate properties in 2006, Korpacz noted.

"Global economy is more than a phrase to throw around at a cocktail party to sound smart. It's real," he said.

Many of the top investment markets are on the West Coast, Korpacz said, because investors like locations along global pathways such as Los Angeles, San Diego and San Francisco.