The way the residential real estate market today is going in Southern Nevada it's no surprise that raw land values here are heading south. Demand for land is way down as the housing sector struggles with a large inventory of new and resale homes. Even if a builder wanted to purchase acreage for a project, getting financing now would be a challenge in this lending environment. The slowing economy doesn't help much either.
In the second quarter median vacant land price stood at $570,279 per acre which turns out to be $148,232 less than at the same time last year, or a 21% decline, reports Applied Analysis, a local market research firm. The frenzied speculation of a few years ago has come to a stop and actually reversed course. Prices are now somewhere near where they were about three years ago.
But there is a big difference if resort corridor dirt is included in the picture. The median price leaps now to over $4.08 million an acre which makes for a whopping 135% increase from the same quarter the year before. Some might scratch their heads at that because a few Strip projects have lately experienced difficulties in securing financing and Echelon actually decided to temporarily halt construction on its site where Stardust used hold court. Nevertheless, parcel prices are reaching for new highs and the reason is that there isn't that much land left for development sitting in prime location and zoned for gaming, hotel and condominium use.
The resort development community seems to feel comfortable about the long-range outlook for Las Vegas. They are already focusing on what will it be like ten years from now. The current economic, housing, mortgage and commercial finance struggles will be resolved down the road and they are counting on their current land investments paying off sometime in the future when it still makes business sense.