Archive for June 23rd, 2010

Institutional Players in Las Vegas Dirt

Wednesday, June 23rd, 2010

Describe them any way you want; institutional players, wall street investors, hedge fund operators, the “smart money” crowd … it doesn’t really matter. For the last eighteen months the “professional money” set has been very active in the Las Vegas real estate market. No one really doubts that the pendulum has swung too far back after the bubble years and that today’s prices for Las Vegas homes represent substantial long term value. As daily participants in the residential market we are constantly hearing stories about bulk purchases of product by various types of investment firms. The newest target by hedge funds and others seems to be raw dirt. As you can imagine, the price of land took a horrific beating along with everything else in Southern Nevada over the past few years and this has created an opportunity for so-called “value players”. The builders are still on the ropes and foreclosure pricing is still setting the tone, but it won’t remain that way forever. The Las Vegas market is demonstrably in the process of correcting itself and someday new home builders will find it economically feasible to re-start construction again. When they do, they will need raw land to build on, and the hedge funds will be there to sell it to them because they are bidding on it now, in bulk of course.