Limited demand for vacant land in the Las Vegas Valley reflects continued weakness in the housing and commercial markets, with just 107 parcels changing hands in the fourth quarter, a report from Applied Analysis business advisory firm showed.
A total of 206.5 acres were sold during the period, compared with 420.8 acres in fourth quarter 2010, and the average price declined nearly 50 percent to $102,491 an acre.
For the entire year, 1,545 acres changed ownership, down 28 percent from 2010 and the second-lowest annual sales volume in the past decade.
At $2.35 a square foot, vacant land prices have fallen 90 percent from their peak in 2007, Applied Analysis senior manager Jake Joyce noted. They're at levels not seen since the 1990s.
As long as demand for what can be built on that land is limited, the market will remain depressed, Joyce said.
One out of every four square feet of office space is vacant, and nobody's going to build industrial space with the imbalance of supply and demand in the Las Vegas market, Joyce said.
"Retail continues to struggle. Consumer spending is up in some categories, but even tenants that are well capitalized are not ready to expand," he said.
Las Vegas is coming off a year of record low new-home sales and very little construction in the commercial markets due to elevated vacancy rates. Along with limited demand, distressed assets continue to cast a shadow on the market, keeping prices well below historical averages, Joyce said.
It's worth noting that only 54 percent of land deed transfers during the fourth quarter were regular "arm's-length" transactions between private parties that did not involve a lender, he said. Trustee deeds represented 32.6 percent of activity.
No resort property transactions occurred during the fourth quarter. For the year, a modest 13.3 acres in the resort corridor were sold at an average of nearly $2 million an acre. Excluding resort property, fourth-quarter land prices declined 38.7 percent from $167,276 an acre in fourth quarter 2010.
No transaction was more than 20 acres. KB Home "pulled the trigger" on 20 acres in the third quarter, but that was the last transaction of any significant size, Joyce said. While home builders have shown some interest in buying land , he said, significant development of finished residential lots is likely years away.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.