DR Horton and Pardee Homes gobbled up most of the recent land offering from the government here in Las Vegas. The Bureau of Land Management auctioned off some 109 acres, raising around $21.4 million. This purchase is almost universally being heralded as a great sign for the Las Vegas housing market. Since the housing crash in 2008, the government has only sold around 30 acres of Las Vegas land. It's not that the government didn't want to sell, the developers simply had no interest in buying. With the massive amounts of foreclosures on the market from 2008-2011, partially developed communities sat vacant across the valley as home builders essentially closed up shop. Now, with inventories of existing homes at all time lows, builders are once again in the buying mood.
It also seems that they are willing to pay a premium for the land they are purchasing. According to BLM officials, the $21.4 million paid for the auction's nine parcels exceeded the appraised value of the land by more than $7 million. The sale price worked out to be around $181,000 per acre. Values during the recession had sunk as low as $5K - $25K per acre. The rebounded price, however, is still much lower than the bubble prices of 2006/2007, when acres of land in Las Vegas sold for upwards of $650,000 per acre.
Robert Deville, president of Harmony Homes in Las Vegas, reiterated that land is becoming increasingly difficult to come by in the now booming Las Vegas real estate market. “We came to a grinding halt with the problems we had," he explained, "and
now the demand is there but the plots and land supply is not. Right now it is very difficult to find parcels. I’m always
looking for land.”
Showing posts with label land prices. Show all posts
Showing posts with label land prices. Show all posts
Friday, July 19, 2013
Sunday, March 31, 2013
Las Vegas Land Prices Fuel Surging Housing Market
But is it a second bubble?
The price for residential land in Las Vegas has risen 90% in only a year as
new construction continues to feverishly attempt to capitalize on the
demand for housing created by the slow down in foreclosures. According
to an article in the Las Vegas Review Journal, Sunbelt Development and
Realty Partners reported an average price of $202,983 an acre for
medium-density (six to 14 units an acre) residential land in the fourth
quarter of 2012, compared with $170,450 in the third quarter and
$104,000 at the beginning of the year. This rise in land prices comes
as the last of the “dinosaurs” haunting the Las Vegas valley are sold
off. These dinosaurs are projects that were abandoned in various stages
of incompletion after the real estate bubble burst in 2008. For
several years, home builders who wanted to, could purchase these
partially finished lots for fabulously low prices...but not many wanted
to. New home construction ground almost completely to a halt in 2009.
Over the last year, however, demand for new homes has skyrocketed and
developers who could have purchased land cheaply three years ago are now
entering bidding wars for residential lots.
new construction continues to feverishly attempt to capitalize on the
demand for housing created by the slow down in foreclosures. According
to an article in the Las Vegas Review Journal, Sunbelt Development and
Realty Partners reported an average price of $202,983 an acre for
medium-density (six to 14 units an acre) residential land in the fourth
quarter of 2012, compared with $170,450 in the third quarter and
$104,000 at the beginning of the year. This rise in land prices comes
as the last of the “dinosaurs” haunting the Las Vegas valley are sold
off. These dinosaurs are projects that were abandoned in various stages
of incompletion after the real estate bubble burst in 2008. For
several years, home builders who wanted to, could purchase these
partially finished lots for fabulously low prices...but not many wanted
to. New home construction ground almost completely to a halt in 2009.
Over the last year, however, demand for new homes has skyrocketed and
developers who could have purchased land cheaply three years ago are now
entering bidding wars for residential lots.
Land is becoming a precious commodity in Las Vegas. This is partially due
to the geography of the valley itself. There is only a limited amount
of land remaining in the Las Vegas valley and much of it is owned by the
United States government as BLM land. This is an issue that Las Vegas
developers have always known they will have to face sometime in the
future. In the near term, there are still plenty of residential lots to
be had, but prices are escalating rapidly. Home Builders Research
President Dennis Smith has described the increase land prices over the
last year as “downright scary.” Robb Beville, president of Las
Vegas-based Harmony Homes, elaborated, “Low inventory is what is driving
up the demand, not job growth or employment growth.”
to the geography of the valley itself. There is only a limited amount
of land remaining in the Las Vegas valley and much of it is owned by the
United States government as BLM land. This is an issue that Las Vegas
developers have always known they will have to face sometime in the
future. In the near term, there are still plenty of residential lots to
be had, but prices are escalating rapidly. Home Builders Research
President Dennis Smith has described the increase land prices over the
last year as “downright scary.” Robb Beville, president of Las
Vegas-based Harmony Homes, elaborated, “Low inventory is what is driving
up the demand, not job growth or employment growth.”
This “artificial” increase in real estate prices is something we’ve been
talking about for the last year. It is creating a lot of uncertainty in
the Las Vegas real estate market and makes it difficult to know if the
recovery we are currently experiencing in home prices will continue, or
lead to another bubble bursting. As always, in this time of
uncertainty, we strive to bring you the best real estate investment
bargains available, as well as the best information and advice on the
market. We recently offered one of these “dinosaur” unfinished
condominium developments to our investors for pennies on the dollar. If
you are interested in finding deals, like this one, that still exist in
Las Vegas, call and speak to Glenn personally.
talking about for the last year. It is creating a lot of uncertainty in
the Las Vegas real estate market and makes it difficult to know if the
recovery we are currently experiencing in home prices will continue, or
lead to another bubble bursting. As always, in this time of
uncertainty, we strive to bring you the best real estate investment
bargains available, as well as the best information and advice on the
market. We recently offered one of these “dinosaur” unfinished
condominium developments to our investors for pennies on the dollar. If
you are interested in finding deals, like this one, that still exist in
Las Vegas, call and speak to Glenn personally.
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