Land foreclosures are leading to pushing back of prices to the levels of 2003. Banks are aggressive in seizing land from defaulting owners and this is leading to a chain reaction. In Southern Nevada the prices have fallen to the lowest level since the last seven years.

This has been highlighted in the report on the first quarter by Applied Analysis. It indicated that 74.4% of all the land transactions came from the foreclosure category. This trend had been prominent during 2009. In the last quarter of 2009, 65.6% of the deals related to foreclosures undertaken by the banks.
Brian Gordon of Applied Analysis said that two years previously these types of trnsactions involving lenders just did not exist.

Land prices have been pushed down to $182,441 for each acre during the first three months of this year. So far the lowest has been $172,500 for one acre during the first three months on 2003. During the peak of the housing boom land was priced at $939,000 for one acre. Prices have tumbled by 80.6%.
Gordon said, “I think we will continue to see downward pressure on prices for a while. The demand for raw land is somewhat weak. There is excess inventory of office, industrial and residential; and development activity has come to a near standstill in many of those sectors, so that they don’t need raw land.”
Some of the residential plots that had been bought for development are being sold for the improvements done on the infrastructure. The deals on land continued to remain limited. 526.6 acres changed hands during the first three months – it being five acres less than the last quarter deals of 2009. In the first three months of 2003 deals involved over 3,100 acres.

During 2009 many of the owners of land returned their properties to the banks. During that year over 5% of the transactions were categorized as deeds-in-lieu-of-foreclosure as per the findings of Applied Analysis.

Gordon said that most of the owners of land have gone underwater and unable to continue with the debts. Thus they have taken the option of allowing the land to go back to the banks – something similar to the housing market scenario.
In April foreclosures of houses in Las Vegas increased. The banks took foreclosure action against more number of houses across the state compared to March.

Related tags

Nobody landed on this page from a search engine, yet!

We suggest you to read about: