overview of land markets survey conducted by nar research for the realtors® land institute lawrence...
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Overview of Land Markets Survey Conducted by NAR Research for the
REALTORS® Land Institute
Lawrence Yun, Senior Vice President & Chief EconomistJed Smith, Managing Director, Quantitative Research
Gay Cororaton, Research EconomistAugust 2014
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Survey Conducted July 9 – July 31, 2014
• REALTORS® Land Institute Survey.– Surveyed 1,000 members plus
approximately 9,500 non-members.– 629 responses.
• 542 respondents provided information on membership: o 63 percent from RLI; o 80 percent are NAR members;o 13 percent are CCIM members; o 35 percent have other memberships
(e.g., ABR, ALC, ASFMRA, CIPS, CRB, CRS, CRE, GRI, SIOR, TAR, ULI, Society of American Foresters )
• Characteristics about the sale pertain to the most recent land sale transaction of the respondent.
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Highlights of the NAR-RLI Land Business Survey
• Regions 3 (KY, TN, NC SC, GA, AL, MS, FL) and 4 ( KS, MO, AR, LA, OK, TX) accounted for approximately 69 percent of respondents.
• Major practice areas: Agricultural (69 percent of respondents), and Recreation (59 percent of respondents).
• Transaction and price growth, past year: 4 percent. • Individuals/families: 58 percent of buyers. • Days on market varied-- from 60 days for irrigated
agricultural land to 237 days for commercial land.• Financing: on average, 31 percent of the transaction
is financed.
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RLI Regions 3 and 4: Locations of Much of Activity
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Agriculture and Recreation: Leading Practice Areas
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Land Sales
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Type of Seller in the Most Recent Land Sales*
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Price Growth, Past 12 Months (July 2013-2014)Median Price Change: 4 Percent;
Mean Price Change: 4 Percent
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Sales Growth, Past 12 Months (July 2013-2014)Median Percent Sales Growth: 4 PercentMean Percent Sales Growth: 4 Percent
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Agriculture and Recreation46 Percent of Most Recent Sales Transactions
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Types of Land Most Recently Sold by Region*Percent of Sales Transactions
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Median Acres of Most Recent Land Sale Variation by Region and Land Type
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Irrigated Land Transactions44 Percent in Region 5; 14 Percent Overall
• Pricing for Agricultural Land: $5,600 per acre.
• Price varies widely for irrigated land vs. non-irrigated.– Irrigated--Very expensive in
California and Iowa.– Irrigated--Less Expensive
elsewhere• Accordingly, prices are not
broken out on following slides for irrigated vs. non-irrigated land.
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Median Price of Most Recent Land Transaction Variation by Region and Land Type
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Mineral Rights Conveyed in 60 Percent of Most Recent Land Sale Transactions
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Land Sales Transactions With Mineral RightsVariation by Region and Land Type
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Type of Land Most Recently SoldIndividual/Family
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Type of Land Most Recently SoldCorporations/Partnerships
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Individual and Corporate Sellers: Majority from Regions 3 and 4
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Purchases
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Individuals/Families: The Major Buyers
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Major Types of Land TransactionsIndividual/Family Buyers: Recreation and Agriculture
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Major Types of Land TransactionsCorporations/Partnerships: Commercial and Development
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Major Types of Land TransactionsExpansion Farmers: Agriculture
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Major Types of Land TransactionsInvestors: Diversified
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Regional PurchasesIndividual/Family Buyers
Corporations/Partnerships
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Regional Purchases Expansion Farmers
Investors
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Market Details
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Median Days on Market, By Region and Type of Land
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Transaction Financing On Average, 31 Percent of the Land Value is Financed
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Transaction Financing by Type of Land
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Major Conclusions
• Most Prevalent Type of Land by Buyer – Individual buyers -> agriculture, recreation– Corp/partnerships-> development , commercial– Expansion farmers-> agriculture– Investors-> diversified across types of land– 1031 Exchange –> agriculture, ranch– Foreign buyers –> ranch, recreation – Others -> development
• Most Prevalent Type of Land By Region:– Region 1: development, recreation– Region 2: agriculture– Region 3: timber/ranch, recreation,– Region 4: Timber/ranch, agriculture, recreation– Region 5: agriculture, timber/ranch
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Major ConclusionsPrice, Financing, and Market Growth
• Median Price: $5,125 per acre with Great Variability– Agri, irrigated: $6,000 ; Agri, non-irrigated: $5,500– Timber:$2,075 ; Ranch: $4,150– Recreation: $3,000; Development: $40,000– Commercial $96,875 ; Other: $9,125
• Median Number of Acres in Transaction: 81 with Great Variability– Agri, irrigated: 160; Agri, non-irrigated: 117– Timber: 202; Ranch: 294– Recreation: 81; Development: 17 – Commercial: 5 ; Other: 23
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Major ConclusionsPrice, Financing, and Market Growth
• Median days On Market: 120 days with Great Variability. – Agri,irrig: 60 ; Agri,non-irrig: 73– Timber: 120; Ranch: 153– Recreation: 150; Development: 123– Commercial: 237 ; Other: 180
• Irrigated land: 14 percent of most recent sales.• Mineral rights: Conveyed in 60 percent of sales.
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Major ConclusionsPrice, Financing, and Market Growth
• On average, 31 percent of Transaction Value is financed.
• Market Growth Over Past Year.– Median prices have changed typically at 0 to 5
percent.– Sales have changed typically also at 0 to 5
percent.