While more parcels changed hands in the fourth quarter they totaled just 321 acres, which is down 29% from the same 2007 period. For the year, 1,223 acres changed hands, which is approximately one-half of the 2007 total and approximately one-fourth of the 2006 total. No resort-corridor land changed hands during the corridor.

A lack of demand for raw land kept values on the decline. On average, non-resort-corridor properties traded for $391,900 per acre or $9 per square foot, a 15% drop from the third quarter of 2008 ($459,798 per acre; $10.56 per square foot) an a 58% drop from the fourth quarter of 2007 ($939,000 per acre; $21.56 per square foot), which marked the highest quarterly average recorded in Las Vegas' history for non-resort-corridor properties.

"The national recession combined with sluggish local fundamentals have investors and developers contracting and conserving resources, which is placing downward pressure on pricing," Applied Analysis principal Brian Gordon says. "Commercial vacancy rates have reached new highs in the majority of segments, which limits demand for underlying real property. We expect these conditions to continue into the foreseeable future as unemployment rates remain above 9%, office vacancies extend beyond 17 percent, gaming and sales activity are down significantly from the prior year and consumer confidence levels remain at all-time lows."

Gordon's partner Jeremy Aguero says that although the correction now underway was not unexpected it has left many investors, developers and lenders in a tenuous position. While the company's analysis focused on vacant land the company has been monitoring similar trends for land underlying homes, office buildings and retail centers.

"This value that was once equity underlying development and collateral for residential and commercial loans has been reduced significantly," Aguero says. "There are few signs market conditions will improve significantly during 2009, and we expect an increasing number of vacant land sales to come from distressed and bank-owned transactions."