Residential land values - USA

There was an intriguing article in the weekend FT on US residential land values. To cut a long story, values have fallen (and food prices risen), so developers are selling their land banks back to farmers (at a huge book loss).

But look at the figures involved:
Lakewood homes, a small mid-western builder, sold 290 acres of land in the Chicago suburb of Newark at $9,650 (€6,086, £4,831)) an acre in April, nearly 40 per cent below the $15,865 an acre the company paid for the land in November 2005, to a local agricultural investor.

Assuming that Newark is a typical sort of town, even £8,000 per acre is considerably less than one per cent of the average price/value of residential land in England/Wales, which had reached about £1,200,000 per acre in January 2008.

"Sure", I hear you cry, "but the US is a big country - we have a land shortage in the UK".

Well, yes and no. The UK is more densely populated, but don't forget that in either country, most of the population lives in urban or suburban areas - and what you are paying for when you buy a house is proximity to the nearest town, because you need access to jobs, schools, shops, hospitals etc.

Further, according to the Case Schiller Index, Chicago house prices are down by about 10% over the last two years. In the UK, the maths is simple: house price = bricks and mortar plus land value. In the 1990s crash, UK house prices fell by a third (in real terms) but land values (being a balancing figure) fell by two-thirds (in real terms).

But the typical price for a house in Newark appears to be about $300,000. If prices have fallen by 10% and land values were only $1,600 per residential plot at the peak, and assuming that such land cannot have a negative value, what's the balancing figure? Where did the other $30,000 fall in value go?