A new survey shows that there was a significantly positive impact on sales in the rural land real estate sector in 2021, with more than 70% of agents seeing a slight to often significant increase in land values, especially with recreational land, farmland, country homes and timberland. The findings are from National Land Realty’s second annual land real estate agent and broker survey, release last week.
Land values in 2021
- Last year, brokers saw recreational land increase the most (48.72% of respondents), followed by farmland (24.36% of respondents), with the latter jumping more than 6% over 2020. Country homes and timberland tied for 3rd with 10.26% of brokers saying that these types of land increased the most. Ranchland (5.13% of respondents) and commercial land (1.28% of respondents), rounded out the top six.
- In terms of percentage of change from 2020 to 2021, land values overall increased more than 10% (40.48% of respondents), 6-10% (26.19% of respondents), and 1-5% (17.86% of respondents). 8.33% of brokers said they experienced no land value increase, while no respondents had any property that lost value.
Outlook for 2022 optimistic
- For land value appreciation, nearly 12% of brokers think it’ll be more than 10%, while 16.67% think land will increase by 5.01-10%, and the largest group (41.67%) think it’ll increase by as much as 5%. 15.48% think it’ll remain the same and almost 6% think it could drop by as much as 5%.
- For individual brokerages, 32.14% believe their business will grow by more than 10%, a more than 6% increase from 2021, while 19% think it’ll grow between 6-10%, a 7% drop from last year. And 16.67% say their business will grow as much as 5%, a more than 7% drop YoY.
Majority of buyers coming from urban or suburban areas (65%)
- 67% from major metro areas like Atlanta and Dallas, which is a 4% increase over 2020.
- 57% from smaller metro areas like Austin and Birmingham, a 3% increase from 2020.
- 24% from the burbs, a 9% drop from 2020.
- 24% from rural areas, a more than 10% jump from 2020.
- 52% from small towns, a nearly 4% drop from 2020.
Challenges in 2022
- The biggest challenges facing land real estate brokers are finding potential sellers (74% of respondents), establishing the right listing price (33% of respondents), and finding affordable prices for buyers (21% of respondents).
“Both investors and urban professionals ran for rural land in a big way in 2021, albeit for different reasons, which made for a very good year for land sales, with record-breaking volume throughout the year,” said Jason Walter, CEO of National Land Realty. “And with all of the traumatic events of last year, people continue to look to not only invest in land outside of cities, but they also want to live on the land they buy, to be able to breathe the fresh Covid-free air and reconnect with the great outdoors without being locked down. This significant move away from urban areas is now all the more possible through the popularity of remote or hybrid working arrangements.”
“2021 was a very strong year for land and 2022 is starting out the same way. More than 90% of our brokers are optimistic that land real estate will do quite well over the next 12 to 18 months,” said Jason Burbage, president of National Land Realty. “And more than 70% of them expect land values to continue to appreciate in 2022 as much as 5% to more than 10% YoY.”
For more information, https://nationalland.com/