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.

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."

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.