BluefoxToday blog : Las Vegas land prices in a flux

Las Vegas land prices in a flux

As the mortgage sector and the residential real estate market in the valley stumble along, the same type of instability is now evident in the raw land arena. The weakness in the former is clearly beginning to affect the latter.

In the fourth quarter of 2007 land prices here climbed to a $1.51 million per acre average over the same time period in 2006, announced local research shop Applied Analysis. That amounts to a 21.8% increase year over year. Now, if the comparison is made with the third quarter of 2007, the value in essence decreased 25%, giving it a totally different flavor. Prices are unmistakably floating back and forth and creating a large judgment dilemma for appraisers and banks.

Land on and near the Strip naturally commands a handsome premium, so when it is removed from the data the average price now comes to a much lower $939,400 an acre. That still is roughly a 20% hike from the same quarter a year before.

Residential land values, though, have lately been under a fair amount of pressure, reports Home Builders Research, so much so that they are actually losing ground now. Builders, especially the large ones, are selling some of their holdings and are also reducing new home permit applications.

Last summer a finished lot, typically 3,500 square feet, was appraised around Sam Boyd Stadium at $130,000. Recently similar lots in the same area were purchased from a bankrupt company for $55,000 a piece, according to Home Builders Research. A major price reduction that speaks volumes. What it also means is that homes built on these cheaper lots will be much more affordable, somewhere within a range where an average home buyer can again qualify for a mortgage.

 

_______________________________________________________________________________

Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 9 commentsEsko Kiuru • February 23 2008 02:20AM

Comments

Esko, This is a very interesting piece - We have also just started seeing land value decrease.  The major builders out here have really slowed down - I live in a new subdivision that has a section that a developer has developed and not a single builder has started anything.  When I mean developed (streets, curbs, and gutters)   Good luck in Vegas
Posted by Vincent McKamy, Realtor Fredericksburg Virginia (Long & Foster ) over 10 years ago
I hope you guys will be on the road to recovery soon, the fall seems to have started with Vegas early.
Posted by Joey Remondino, Broker, GRI, E-Pro (RE/MAX Preferred Properties) over 10 years ago

Esko

Pretty amazing statistics

Sincerely

Tom Braatz

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) over 10 years ago

Vincent,

Correction is also underway in land prices here.

Posted by Esko Kiuru over 10 years ago

Joey,

We might already be at the bottom of the cycle, or at least very near, and then it's recovery time.

Posted by Esko Kiuru over 10 years ago

Tom,

The lot sale price drop is pretty serious.

Posted by Esko Kiuru over 10 years ago

Esko, I bet you wish you had bought a couple of acres of land near the strip when they were affordable.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 10 years ago

George,

That would have been nice.

Posted by Esko Kiuru over 10 years ago
Wto3Ic sjjqinplxniq
Posted by cgwdrx almost 7 years ago

Participate