In the beginning of August, John Paulson’s hedge fund invested in over 875 acres in a resort village not far from Las Vegas, presumably with an eye on a housing market recovery indicated by a shrinking pool of available real estate for sale.

Paulson & Co purchased $17 million worth of real estate with the appropriate level of hedge fund due diligence at the resort community of Lake Las Vegas in Henderson, Nevada. The deal was brokered through the Paulson Real Estate Recovery Fund whose role is to build houses on undeveloped land and then resell the properties to homebuilders. The 875-acre purchase represents the majority of the remaining undeveloped land at the 3.600-acre community, and was the largest single land purchase in the area for at least the past three years.

“Paulson & Co. was prompted to invest heavily in the Las Vegas market because the supply of new housing is rapidly receding and few new projects are being planned in the Henderson area,” said Greg Gross, director of the Nevada region for Metrostudy, a Houston-based firm that tracks new construction.