The volume of November home sales in Las Vegas trailed off 5.5% from October, but spiked 44% from the start of 2009, according a report from MDA DataQuick.

The San Diego-based information provider said the home sale surge comes from the usual factors: price declines, low mortgage rates and the federal tax credit for homebuyers.

Foreclosure resales continued to dominate the Vegas housing market but also continue to gradually decline, according to MDA DataQuick. In November, 64.2% of homes and condos in Las Vegas were foreclosure resales, down from 66.8% in October and 68.1% below levels seen in November 2008. In April 2009, foreclosure sales peaked, taking up 73.7% of the region’s sales activity, but that percentage has declined every month since — perhaps as lenders and servicers have held up foreclosure activity.

The 4,787 new and resale homes and condos was the highest number of sales for a Vegas November since 2006, when 5,803 homes sold. November marked the 15th consecutive month that sales increased from one year earlier.

The region’s median sales price continued to fall on a year-over-year basis — marking 31 consecutive months of declining prices — and by November, it stood 56.8% below its $312,000 peak, recorded in November 2006. This November, the median price paid for all new and resale houses reached $134,900, up 3.8% from October but down sharply 29% from $190,000 last year.

What exactly is all this government involvement doing? According to an article in NuWireInvestor the government involvement is slowly making things even worse.

The so-called recovery in housing has been boosted by artificial government actions. The Fed has kept interest rates at historically low levels at between 0%-0.25%. Fannie Mae and Freddie Mac have been bailed-out at levels that are setting new records to keep them in business and provide a base for mortgage financing in the U.S. The government is offering first time home buyers an $8,000 tax credit and those who haven't bought a home in five years $6,500. And lastly the Fed is buying up billions of dollars of mortgage securities.

At no other time has the government been so involved in real estate like it is in the current crisis, and there's more to come from the White House in February before the president offers the annual State of the Union Address.

But before any real stabilization will develop many of the artificial protections for the market have to come off. The tax credit will expire April 30th. The Treasury will have to stop buying securities that back-up mortgages. The Fed will eventually have to raise interest rates. The hint of higher rates by the Fed will cause bankers to increase home lending rates before the Fed ever makes an announcement. That's how it works in money markets.

Sooner or later the government will be forced to deal with whether it will nationalize Fannie Mae and Freddie Mac. There are already eager suitors waiting in line, but any take over these days would come at a massive cost to tax payers, who own the majority of the stake in both government sponsored entities by the sheer volume of money that it's taking to keep them operating.

The climb out of the mortgage mess is expected to take at least four or five years before the government acts to make a decision on Fannie and Freddie.

The government's housing rescue package has been orchestrated by federal policy makers with little public transparency. As part of the program bankers have been given financial incentives to modify mortgages, but the plan has been deemed a failure. Still, bankers are provided with incentives to work out a short sale or have homeowners sign a deed in lieu of foreclosure.

The foreclosure epidemic has led to the worst economy since the Great Depression, despite economic improvements in some business sectors. In order for the housing market to stabilize the huge number of unemployed will have to go back to work in order to qualify to become homeowners. At its very core the nation is under-going a huge shift in the government paradigm controlling the mortgage market.

The shift is painful for millions of Americans, who are unemployed, under-employed or losing their homes. As usual the government has done very little for the majority of those suffering through the crisis. But the shift to new standards will slowly transform the culture of investing both in real estate and other investments to a new understanding of the nation's future.