Las Vegas Sun

November 16, 2018

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2010 saw increase in land sales as prices continued to fall

More land traded hands in 2010 than it has since the recession began, but prices continued to plummet, according to a Las Vegas research firm.

Applied Analysis said the 2,113 acres of land was transferred in 2010, a 32 percent increase over 2009 when 1,623 acres was sold. Despite the increase, which in part was attributed to lenders taking back ownership of properties, the sales levels are one-quarter of what they were five years ago.

The price of land sold in 2010, at an average of $194,508 per acre, was 27 percent below the $266,317 per acre in 2009, the firm reported. Land prices have come down since the price per acre in 2007 was $1.39 million.

When excluding resort property, the value of land sales in 2010 was $176,253, 27 percent lower than the price of $241,287 in 2009. The price was $784,150 per acre in 2007.

Applied Analysis Principal Brian Gordon said there’s no indication that land prices will start increasing. A large number of residential foreclosures, rising housing inventory on the market and high vacancy rates with commercial space limits the demand for new construction and therefore land, he said.

The reduced price of land is taking into account that anyone who buys it is going to have to hold it, Gordon said.

“As long as the economy remains weak, including job creation and household income, there’s little incentive to develop property based on mere speculation,” Gordon said.

During the fourth quarter of 2010, sales posted their lowest level of the year with 420.8 acres transferred, a 7.3 percent decrease from the third quarter and 20.8 percent decline from the fourth quarter of 2009, the firm reported.

Distressed ownership transfers continue to play a large role in transactions of raw land, the firm reported. Lender foreclosures accounted for 46.8 percent of the market activity.

During the fourth quarter of 2010, the biggest transaction was 30.9 acres in the resort corridor between Tropicana Avenue between Koval Lane and Paradise Road. The vacant property was transferred at a price of $20 million or $649,088 per acre through the foreclosure process, the firm said.

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