Overview of Land Markets Survey Conducted by NAR Research for the REALTORS® Land Institute Lawrence...
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Transcript of Overview of Land Markets Survey Conducted by NAR Research for the REALTORS® Land Institute Lawrence...
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
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.
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.
RLI Regions 3 and 4: Locations of Much of Activity
Agriculture and Recreation: Leading Practice Areas
Land Sales
Type of Seller in the Most Recent Land Sales*
Price Growth, Past 12 Months (July 2013-2014)Median Price Change: 4 Percent;
Mean Price Change: 4 Percent
Sales Growth, Past 12 Months (July 2013-2014)Median Percent Sales Growth: 4 PercentMean Percent Sales Growth: 4 Percent
Agriculture and Recreation46 Percent of Most Recent Sales Transactions
Types of Land Most Recently Sold by Region*Percent of Sales Transactions
Median Acres of Most Recent Land Sale Variation by Region and Land Type
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.
Median Price of Most Recent Land Transaction Variation by Region and Land Type
Mineral Rights Conveyed in 60 Percent of Most Recent Land Sale Transactions
Land Sales Transactions With Mineral RightsVariation by Region and Land Type
Type of Land Most Recently SoldIndividual/Family
Type of Land Most Recently SoldCorporations/Partnerships
Individual and Corporate Sellers: Majority from Regions 3 and 4
Purchases
Individuals/Families: The Major Buyers
Major Types of Land TransactionsIndividual/Family Buyers: Recreation and Agriculture
Major Types of Land TransactionsCorporations/Partnerships: Commercial and Development
Major Types of Land TransactionsExpansion Farmers: Agriculture
Major Types of Land TransactionsInvestors: Diversified
Regional PurchasesIndividual/Family Buyers
Corporations/Partnerships
Regional Purchases Expansion Farmers
Investors
Market Details
Median Days on Market, By Region and Type of Land
Transaction Financing On Average, 31 Percent of the Land Value is Financed
Transaction Financing by Type of Land
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
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
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.
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.