A sale of federally owned land in the Las Vegas area is signaling a positive turn for the region’s beleaguered housing market and economy that collapsed amid the Great Recession.
Seven parcels encompassing 109 acres were sold Tuesday by the U.S Bureau of Land Management for a total of $21.4 million. The bulk of the acreage was purchased by two home developers, D.R. Horton and Pardee Homes.
It’s the first time in years developers have shown any interest to acquire vacant land from the federal government around Nevada’s sprawling desert metropolis. During the prior three years combined, only about 30 acres were sold as Nevada languished in the grip of recession.
The sales reflect a turnaround in the housing market that has produced strong demand for homes along with a limited inventory.
“We have more buyers than houses and land and the builders are smart to do it,” said David Tina, president of the Greater Las Vegas Association of Realtors.
BLM officials said the combined sales exceeded by more than $7 million the appraised value of the nine parcels offered.
Karla Norris, BLM assistant district manager who oversees the Southern Nevada Public Land Management Act under which the land auctions are authorized, said the sale prices equate to $181,000 per acre. Over the last few years the going rates were between $5,000 and $25,000.
In 2007 before the recession and housing market crash, the federal government sold 40 acres in the Las Vegas are for around $659,000 an acre, Norris said. The year before that, 3,152 acres were sold at an average cost of $252,676 per acre.
Then the bottom fell out and land sales stalled.
D.R. Horton, a national homebuilder based in Dallas-Fort Worth, purchased 51 acres in two separate parcels for roughly $6 million. Pardee Homes bought 22.5 acres for nearly $2.8 million.
Neither company returned phone messages seeking comment.
But Robert Beville, president of Harmony Homes in Las Vegas, said land is once again a hot commodity as demand for homes begins to rebound.
“We came to a grinding halt with the problems we had and now the demand is there but the plots and land supply is not,” Beville said Thursday. “Right now it is very difficult to find parcels. I’m always looking for land.”
It’s a big swing from just three years ago, when the Nevada housing market and Las Vegas in particular imploded, leading to high foreclosure rates and vacant homes. Since then many homes have been snatched up by investors and there is pent-up demand.
Nevada’s construction industry lost tens of thousands of jobs during the recession, but the sector is regaining ground. A report Thursday by the Nevada Department of Employment, Training and Rehabilitation showed construction employment in southern Nevada grew by 1,700 year-to-date, or 4.8 percent. But there’s still a lot of lost ground to make up. Construction employment in the Las Vegas area peaked just shy of 110,000 and now is around 40,000.
Marcus Conklin, a former Nevada assemblyman now associate director of the Lied Institute, said it’s too soon to tell if the land purchases foretell a return to boon times, but the development is encouraging.
“It’s all positive. It’s circular, too,” he said. “As jobs grow the demand for housing grows ... As the economy repairs itself so will housing. As housing repairs so will the economy.”
The BLM plans another land sale in the fall, when about 400 acres will be auctioned.