Land Sales in Las Vegas Seeing Ups and Downs
Once upon a time, Las Vegas was a hot spot for land speculators and there just wasn’t enough land to go around. However, sales diminished during the recession and took some time to recover. It has been noticed, however, that land sales have dropped again. The investors in the area have cut back on buying, and the land that is still available is priced high, which has kept investors from buying tracts of land.
Land Market Still on the Verge
While the sales are not where real estate professionals want them to be, the land market has not completely dried up. Some professionals feel that it has just reached a more normal level and this level could rise in the future. While the sales volume may not return to the levels that it was before the reception, this is still good news.
Buyers bought 2700 acres in the Las Vegas area last year and these parcels had a median price of around $317,000 per acre. This is compared to the 2400 acres in 2014 at a median price of $287,000 an acre and the 3000 acres in 2013 at a median price of $211,000 an acre. When you compare these numbers to numbers before the recession at 10,000 acres in 2003 and 2004 and a median price of around $960,000 an acre, you can see why the economy nose-dived and the bubble exploded.
While the real estate market is seeing some healing from the recession, it is still afflicted with underwater homeowners, foreclosures, and no growth in wages or the job market. This is seeing some turn arounds, however, which can help the market to heal, but not nearly as fast as it once did.
Construction Levels Picking Up
New construction was one area of the market that really suffered. Planned communities simply quit building and many construction companies found themselves without any work at all. As the economy has mended, however, construction has picked up. This is largely due to the warehouse and apartment developers. If this trend continues, investors may become more interested in developing sites.
The big deals that were found in the last decade may be gone, but acreage still sells in huge chunks and at big prices. For example, developer Eric Cohen a co-founder of the Calida Group said that five or size years ago his group paid about $180,000 an acre for fully graded land and now they are paying around $600,000 an acre for quality locations.
Many homebuilders feel that landowners are asking too much for land now, which keeps them from buying land. There is land available, but much of it is owned by the federal government. This means that builders have a very hard time finding land that is affordable and in quality locations. The lack of land available is a problem that has been part of the market for years. Vacant land may have no underground utilities, which makes development more expensive, which can be a turn off as well.
While the real estate market is picking up and beginning to come back, there is still much to be done to help it achieve a balance for builders and other real estate professionals.