Land sales and prices both rose across property types last year, and an uptick is likely to continue into 2020, if at a somewhat slower pace, according to the 2019 Land Market Survey, a joint survey from the REALTORS® Land Institute and the National Association of REALTORS®. The study acknowledges headwinds, with zoning regulations and obtaining financing as the top issues affecting land transactions. The survey is based on responses from more 800 real estate professionals involved in a land transaction over the past year.
Dollar sales volume on land rose, on average, by 2.2% from October 2018 to September 2019 compared to the previous year. Residential land sales saw the largest annual increase at 2.9%. Housing experts point to low mortgage rates as helping to boost sales volume and demand for land over the past year.
Respondents to the survey expect land sales to increase at about the same pace of 2.2% over the next 12 months. Sales will likely increase across types, but the largest increases are expected to continue with residential land at 2.8%, according to the report.
While the sales pace will likely continue, real estate pros surveyed expect prices to moderate and move at a slower pace for most types of land over this year. They predict that land prices will increase at 1.6% from September 2019 to September 2020.
Several challenges persist to the land industry. Forty percent of respondents said they considered U.S. economic conditions and access to financing and zoning regulations to be the top land issues. Nearly half of respondents said that residential land zoning ordinances have become more difficult over the past five years. Commodity prices were cited as an issue by 32% of respondents, followed by weather factors at 23%.
Source: “2019 REALTORS® Land Market Survey,” REALTORS® Land Institute/National Association of REALTORS® (2020) and “Land Sales Rose 2% in 2019, With Steady Growth in 2020, According to RLI-NAR Survey,” National Association of REALTORS® Economists’ Outlook blog (Jan. 30, 2020)
