Las Vegas Land Market

 

The Las Vegas land market has been one of the most affected market segments as a result of the 2008 recession and the poor residential market conditions that have in part caused it.  Few market sources provide information on the land market.  Independent appraisal research has revealed that the land market has gone into a state of "suspended animation."  While a few sales are being made, most owners have not actively marketed their properties.

 

While the residential market saw increasing sales volume in 2009, with about 80% of the activity being foreclosures and short sales, the land market has not seen owner losses of this magnitude.  While a number of properties have been sold with significant discounts due to overcollaterization, many parcels have gone back to banks, the market clearly does not react like the housing market.  There is a limited supply of land, and the market was not swamped with hundreds of thousands of excess parcels like the housing market.  It is likely that the land market will return to normalcy qucikly after the housing market stabilizes.    

 

With demand for residential housing at a record low, and the commercial markets struggling, there are significantly few builders / users acquiring land in 2009.  Investor / speculators are, however, purchasing land when large discounts (30% +) are offered, especially those with a clear utility.  Thus, the underlying strength of the land market has been proven in 2008 and 2009.  Most owners have elected to wait out the recession and thus land prices are bolstered by an unwillingness to discount.

 

While vacant land appraisals only require a sales approach analysis, reports of this type are difficult to complete accurately due to the number of sources that must be researched and the price variability that often exists in the market due to differences in factors like; location, planned use, size, shape, accessibility, off-site improvements (like roadways and utility services), traffic count, orientation, hard zoning, approved zoning, zoning overlays, topography, soils, easements / rights-of-way, adjoining uses and deed restrictions.       

 

Expectations for Las Vegas and its short-term future are consistent with the recent past.  The slow market conditions that are being experienced in early 2009 will likely continue until upward changes / increases in employment begin to influence the market.  Las Vegas is anticipating employment gains due in part to the opening of the six (6) high-rise towers, casino and 4,000 room hotel that will have cost approximate $ 9.0 Billion dollars at the MGM Mirage CityCenter on the Las Vegas Strip just south of the Bellagio Hotel & Casino.  Early reports indicated that 12,000 new permanent jobs would be created by this project which now has a "late 2009" expected opening date.

 

On the opposite side of the coin, Las Vegas has seen major casino owners, like Station Casinos and the MGM, struggling to keep their corporations afloat.       

 

The long-term prospects for the Las Vegas land market, like those of the other Las Vegas commercial markets is considered to be good.  Private land is still scarce in Nevada, and while demand is at record lows, when a market demand does return the supply of private land will still remain somewhat restricted.  Current land sales (in early 2009) generally require a significant discount from past prices to motivate buyers.  

 

Contact us with your questions or concerns regarding land market or land appraisals or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.                   

 


                    



Copyright 2007 Horizon Village Realty & Appraisal

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.