Land Markets Survey Shows Individuals and Families Continue to Invest in Land
The REALTORS® Land Institute
September 2, 2014 (Chicago, Ill.)- While overall median land prices steadily rose 4 percent, individuals and families continued to invest in land and account for 58 percent of buyers in land sales transactions, according to a 2014 Land Markets Survey, conducted jointly by the REALTORS® Land Institute and National Association of REALTORS®. In addition, the survey also revealed that 17 percent of land purchasers are corporations/partnerships, 17 percent are investors, and 10 percent are expansion farmers.
The 2014 Land Market Survey is the first of many biannual reports aimed to develop accurate information on current trends in the land markets and on the general state of land sales. The results are representative of over 625 land professional respondents from across the United States.
According to the survey, 43 percent of the purchases where individuals/families were buyers were purposed for farm and ranch (24 percent agriculture and 17 percent ranch) and 31 percent for recreation. Of those surveyed, expansion farmers purchased 98 percent of land for farm and ranch (85 percent agriculture and 13 percent ranch). Investors purchased a diversified portfolio of land (21 percent agriculture, 20 percent timber, 17 percent development, 14 percent commercial). Of the 17 percent of land purchased by corporations, development land accounted for 30 percent, commercial land accounted for 26 percent, and 17 percent accounted for timber.
Terri Jensen, ALC Advanced, 2014 Institute National President-Elect of REALTORS® Land Institute, states that the findings “follow my experience in that 70 to 85 percent of land buyers are expansion farmers/individuals/families; the balance are investors and/or 1031 exchange buyers.”
The results appropriately correlate to the findings that responding land professionals across the United States primarily focus their practices in agriculture (69 percent) and recreation (59 percent). The market and growth for land is steady. The survey recorded that over the past twelve months, ending in July 2014, the median land price change is growth of 4 percent.
According to Jensen, “Land prices are noting stable versus rapidly rising prices with decreases noted in some areas. Most decreases were less than 10 percent of responses and reflected 0 to 10 percent decreases and increases. The 0 to 5 percent increase in 50 plus percent of responses note the change to stability versus rapid changes up or down.”
The 2014 Land Market Survey was based on data collected in July 2014. The survey was emailed to 1,000 REALTORS® Land Institute members and approximately 9,500 non-members and generated 629 usable responses. The full survey is available for free online.