The number of acres sold during the second quarter, excluding the Strip, was down 61 percent from the second quarter of 2006 and was down 49 percent from the first quarter of this year, Applied Analysis reported.

With that softened demand in the second quarter, the price per acre paid was $718,500 — 11 percent lower than the second quarter of 2006. That's 9.5 percent below the first quarter price of $793,700 per acre, the firm reported.

That is simply a snapshot of the market because it takes three to six months to consummate a deal, but what's happening in the marketplace today is continued softening demand and prices falling even further, said Craig Cherney, director of Western operations with the Philadelphia-based American Land Fund, a private equity land acquisition group that buys raw land and entitles it.

Cherney, who until recently was in charge of land acquisitions for Pulte Del Webb in Las Vegas, said the sticker price today is $700,000 per acre and property owners are lucky if they get $650,000.

The reason: major public builders have stopped buying land given the housing slowdown and the large balance of lots they have, Cherney said. Only a handful of private builders with cash are making selective purchases. Among them are Rhodes Homes, Signature Homes and Astoria Homes, Cherney said.

That's bad news for land owners, especially for those who bought in late 2005 or 2006 and are carrying debt, Cherney said. Land loans generally don't exceed three years, and the buyers were speculating on appreciation.

That hasn't happened and many of those land owners are finding themselves in similar situations as homeowners as evidence by the high rate of foreclosures, Cherney said.

"They are either going to have to cut their prices or give them back to the bank just like homeowners," Cherney said.

Many loans will expire by the end of 2007 and into 2008 and 2009. If the banks take them over, they will be aggressive in their pricing, Cherney said.

With that in mind, he said he expects the price per acre to fall to the high $500,000s by the fourth quarter of 2008.

Land holders who aren't carrying any debt on their property and have the ability to be patient will be in good shape, Cherney said. He estimates 50 percent of property owners aren't carrying debt.

"A lot of land owners have done so well in the last 10 years that they kept rolling (cash) into new parcels without any debt," Cherney said.

The land market is a reflection of the housing market, but land prices are always the last to fall, Cherney said.

That will be the case until 2009 when Cherney said he expects public homebuilders to start coming back into the market to purchase land. Some even have enough inventory that they will wait even longer, he said.

That timeline of a recovery correlates with the opening of several major resorts along the Strip and in-migration and spin-off development that is expected to result from it.

As for the land off the Strip, the demand for land has slowed not only because of the decline in the housing market but because of healthy levels of commercial inventory, high costs to develop and volatility in interest rates, said Applied Analysis principal Jeremy Aguero.

In his assessment, Aguero said the slowdown in the land market will likely continue for another year but that should change once 40,000 hotel rooms are added to the market in the next three years. That will generate extra demand for housing and commercial space, he said.

Any discussion of the falling land prices, however, doesn't apply when talking about the Strip.

In the second quarter, 32 acres along Las Vegas Boulevard was acquired by MGM Mirage in two separate transactions averaging $17 million per acre. When including those two with other land transactions, the year-over-year appreciation was up nearly 84 percent, Applied Analysis reported.

In other real estate and development news:

• Centra Realty Corp., an Irvine-based developer, has purchased 5.78 acres of vacant land in the Hughes Airport Center for $5.5 million, Voit Commercial Brokerage announced. Centra plans to develop a 100,000 square-foot for-sale Class-A office and research and development industrial project. Plans call for construction to begin in the fourth quarter. Centra bought the property from CIP Real Estate.

• LaPour, a regional commercial real estate development firm, announced it has started construction on a $19 million, three-story 70,000 square LEED-registered office building at the southwest corner of Diablo and the I-215 frontage road north of Russell Road. The for-lease project is slated to be completed in the second quarter of 2008.

• EJM Development Co. has started construction on a 148,000 square-foot building in its 110-acre master planned Arrowhead Commerce Center in Green Valley, The property at 3755 E. Post Road is scheduled to be completed in the second quarter of 2008.