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Land Prices Pulled Down by Las Vegas Bank Owned Properties

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By : Allana Castro    99 or more times read
Las Vegas bank owned properties dragged down land prices to price levels in 2003, based on studies from a real estate analysis firm.

In the first quarter, more than 74 percent of all land transactions in Southern Nevada were bank foreclosures, up from 66 percent in the previous quarter. Banks intensified their foreclosures on delinquent residential lots as well as on industrial and commercial lots because many owners have already given up on saving their mortgages.

Record numbers of landowners have even voluntarily given back lands to their lenders. Last year, more than five percent of land transactions were deeds in lieu of foreclosure. Owners found they could no longer service their debts, as their planned development projects did not push through. Tight lending and other effects of the weak economy have wiped out their loan payment projections.

Over the past 3 years, as Las Vegas bank owned properties surged in number, land prices in the area outside the Strip swooped down by almost 81 percent from $939,400 per acre in 2007 to $182,441 in the first quarter this year. The rate has gone down sharply to land price levels in 2003 when the per-acre rate was $172,500.

Analysts said the downward price direction for lands in Southern Nevada will continue in the coming months as demand for land slows down and as bank owned properties in Nevada continue to surge in number. The state and Greater Las Vegas both continue to top foreclosure charts, with Nevada still posting increases in filings in March and in April.

In April, the number of bank owned homes for sale in the state spiked by 57.5 percent from the 2,601 units repossessed in March. The percentage of REO units also increased over the month, from 17.6 percent in March to 25.3 percent of all filings in April.

Nonetheless, the decrease in the drop rate of home prices over the past few weeks are raising hopes that the downward price pressure of Las Vegas bank owned properties is now being contained.

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