Las Vegas land prices are rising at an unsustainable and “downright scary” pace as the valley’s home building market continues to rebound, a new report says.
Residential developers bought land in the Las Vegas Valley in November and December for about $175,000 to $185,000 per acre. Prices climbed to more than $200,000 per acre in January and to the $250,000 to $275,000 range in February for some parcels, according to Home Builders Research.
So far this month, a few parcels are in escrow for more than $350,000 per acre.
Land prices are expected to level off around mid-year and hold steady for a while, as the economy still is too weak “to sustain this level of increases,” research firm President Dennis Smith said in the report.
“Aside from being downright scary how quickly the raw land values rose, it is good to hear that values in Las Vegas are returning,” he wrote.
Land prices are soaring as builders sell more houses and ramp up construction plans in the valley.
There were 510 new home sales in the region in February, up 65 percent from 310 sales in February 2012. The median sales price last month was $234,467, up 21 percent from $193,900 a year earlier, Smith reported.
Local builders also pulled 498 new home permits in February, more than double the 236 permits they pulled in February 2012.