That's the assessment of Brian Gordon and Jeremy Aguero, principals of Applied Analysis who this week released the latest figures on land transactions. Demand dropped sharply in the fourth quarter, down nearly 68 percent from the same period in 2005 and off 33 percent from July through September of this year.

But for those properties that are selling, the average price per acre rose 25 percent in 2006. Gordon and Aguero said that kind of continued escalation seems unlikely for now (outside of the resort corridor) because prices and rental rates for developed property make it difficult for developers to proceed with projects at the elevated land prices.

Investors and developers are looking for lower-priced, in-fill properties for higher densities in mature parts of the valley, including the northeast, while foregoing higher-priced land in the northwest, southwest and southeast in Henderson, Gordon said.

"I think there is less speculation going on in the market," Gordon said. "It is similar to other sectors of the real estate market. The price points have made financially feasible projects much more challenging. Developers have been forced to sharpen pencils."

Because of the slowdown in the housing market, builders have less demand for vacant land. Many builders announced last year that they dropped out of deals to purchase property.

With that, there will be more and more speculators and homebuilders searching for land in outlying areas such as Pahrump and Coyote Springs, where prices could be 10 percent to 25 percent lower, Gordon said. More people are willing to accept longer commutes for more affordably priced homes, Aguero said.

Even though transactions have tapered off, especially in terms of residential property, there still remains a strong demand for land for commercial use, Gordon said.

"Speculation, increased development densities and relatively low interest rates in some cases outpaced concerns over a potential housing and real estate bubble," Gordon said.

The $782,300 per-acre price paid for nonresort property between October and December was up 17 percent from the preceding three months and 24 percent from the fourth quarter of 2005 when it was priced at $628,600 per acre, Applied Analysis reported.

Sellers aren't getting the prices, however, that they believed they would get six to 12 months ago, Gordon said. Anyone who bought property recently isn't willing to cut prices to take a loss, but property owners who have a lot less invested have been unwilling to cut prices even though they could do so.

"We see a similar concept in the resale home market where home sellers are unwilling to cut prices and buyers are unwilling to pay premiums at the moment," Gordon said. "Over time, that should correct itself."

Several land owners have been seeking high density valuation for their properties, many of which are no longer feasible because only so many mid-rise and high-rise projects can be built, Gordon said. But he added that "reality may be setting in for many of them" over what they can charge.

Vacant property suitable for neighborhood retail shopping centers will see more stable prices given that high-density residential and mixed use isn't feasible at every location where it's proposed and entitled, Gordon said.

The price per acre was actually much higher in the fourth quarter at $1.2 million but that number is skewed by the $279.9 million sale price for the former Westward Ho site on the Las Vegas Strip.

Metrostudy, which provides data to the housing industry, reported that while growth slows for the country as a whole, the Las Vegas economic picture looks positive, especially for the long-term health of the housing market.

But the company says homeowners shouldn't expect double digit appreciation - a fact much of the decade - won't return anytime soon. The housing market continues to work through high inventory.

Las Vegas added 45,900 jobs in 2006 with growth in those sectors that are higher paying, said Josh Seime, manager of Metrostudy's Las Vegas division.

The firm reported that vacant developed lot inventory remained abundant. At the end of 2006, there were 34,066 vacant developed lots, an increase of 11.7 percent compared to 2005. Based on annual starts, that level of inventory represents a nine-month supply of finished lots, Seime said.

Metrostudy said it expects the Las Vegas market will remain highly competitive for the foreseeable future as consumers have many similar options when it comes to purchasing a home.

"In the face of reduced demand at current price points, builders have pulled back on production in an effort to move units off their balance sheets," Seime said in his report. "On the bright side, the Las Vegas economy is strong and the fundamentals of demand remain in place - both which are positive indicators for the home-building industry. In order to expand margins from current levels, market strategies will need to evolve to reflect market conditions."