Land prices rose a median of 4 percent across the country for the 12 months ending in June, according to the 2014 Land Markets Survey of more than 600 members of the REALTORS® Land Institute.
About half of the most recent land sales were located in the heartland, including Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi, and Florida. About 26 percent of recent sales were also centered in Kansas, Missouri, Arkansas, Louisiana, Oklahoma and Texas.
About three-fourths of recent land sales were recreational (21 percent); timber/ranch (25 percent); and for agricultural uses (27 percent), according to the report.
Some additional findings from this year’s report:
- On average, 31 percent of the land value was financed by purchasers.
- Fifty-eight percent of buyers in land sales transactions are individuals and families; 17 percent are corporations/partnerships; 17 percent are investors; and 10 percent are expansion farmers. Individuals and families tend to buy land for agricultural or recreational purposes, whereas corporations are more strongly motivated by development and commercial purposes.
- Pricing for agricultural land is $5,600 per acre but can vary widely among states. For example, irrigated land vs. non-irrigated land shows a big difference in price, with irrigated land highest in California and Iowa.
- The median time on the market for land sales was 120 days, but that also varied considerably. Agricultural, irrigated land tended to have much lower time on the market, at 60 days, compared to commercial, which averaged 237 days.
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Source: NAR Economits Outlook 09/03/2014