Americans love the countryside—and are willing to pay more for it. That’s according to a recent survey conducted by National Land Realty (NLR). Among surveyed real estate brokers and agents, 70% said they saw a slight to significant increase in land values in 2021—particularly for recreational land, farmland, country homes, and timberland.
VALUE INCREASE BY LAND TYPE
Surveyed brokers and agents reported the biggest value increases among the following land types:
- Recreational land (49% of respondents)
- Farmland (24% of respondents)—more than 6% over 2020
- Country homes and timberland (each 10% of respondents)
- Ranchland (5% of respondents)
The majority of buyers (65%) came from urban and suburban areas. Compared to 2020, last year saw a small bump in the percentages of buyers who hailed from major metro and smaller metro areas.
“Both investors and urban professionals ran for rural land in a big way in 2021… which made for a very good year for land sales, with record-breaking volume throughout the year,” Jason Walter, CEO of NLR, said in a statement. Founded in 2007, NLR specializes in farm, ranch, country home, timber, recreational, and commercial development properties. Headquartered in Greenville, S.C., NLR has more than 80 offices in 40 states.
In terms of the change in land values from 2020 to 2021, more than 2 in 5 respondents (41%) said that land values jumped by more than 10%. More than one quarter (26%) said that land values increased by 6% to 10%. And fewer than one in five (18%) said values grew by only 1% to 5%. Fewer than 1 in 10 respondents (8%) said they saw no change in land value. No respondents said they lost property value.
Respondents apparently felt that the past is a good predictor of the future: Brokers and agents indicated they’re sanguine about 2022.
REAL ESTATE OUTLOOK FOR 2022
More than 90% of respondents said they’re very or somewhat optimistic that land real estate will do well over the next 12 to 18 months. And more than 70% expected land values to continue to appreciate in 2022. Specifically, almost 12% said land value will appreciate by more than 10% in 2022, 17% said value will rise by 6% to 10%, and 42% indicated value will go up by 1% to 5%.
For individual brokerages, almost one third (32%)—a 6% increase from last year—said they anticipated their business will grow by more than 10% in 2022. About one in five (19%)—a 7% drop from last year—expected their business to grow by 6% to 10%.
Despite their optimistic outlook, brokers and agents seemed well aware of the challenges they face. A significant majority of respondents (74%) said the biggest challenge facing real estate brokers is finding potential sellers. That’s followed by establishing the right listing price (33%) and finding affordable prices for buyers (21%).
On the other hand, finding buyers isn’t so difficult in a seller’s market. Only 19% of respondents said that attracting potential buyers is their biggest challenge.
The NLR survey polled over 80 brokers and agents around the country who specialize in land real estate.
