The land market recorded its busiest year in nearly a decade in 2021 as land sales rose 6%, outpacing acquisitions of other commercial real estate properties like single-family rentals (5%), industrial properties (4%), and apartment buildings (2% Class A and 3% Class B/C), the National Association of Realtors reports. Historically low mortgage rates throughout the COVID-19 pandemic drove up demand for home building nationwide, which ultimately led to a significant increase in land sales and development.
Residential land sales accounted for 59% of all land purchases in 2021, and by Q4, the underlying value of the residential land owned by households totaled $15 trillion, up from $13 trillion in Q4 2020.
NAR Chief Economist Lawrence Yun noted in the report that he expects 2022 to remain a good year for the land market: "Even with rising interest rates, I expect sustained growth in land sales and prices this year, driven particularly by the demand for multifamily and single-family housing needs. The shift from just-in-time to just-in-case inventory management amid supply chain issues will continue to drive the demand for land for new warehouses. Moreover, agricultural grain prices will remain elevated due to the war in Ukraine and thereby boost demand for farmland."