Presentation on theme: "Overview of Land Markets Survey Conducted by NAR Research for the REALTORS® Land Institute Lawrence Yun, Senior Vice President & Chief Economist Jed Smith,"— Presentation transcript:
Overview of Land Markets Survey Conducted by NAR Research for the REALTORS® Land Institute Lawrence Yun, Senior Vice President & Chief Economist Jed Smith, Managing Director, Quantitative Research Gay Cororaton, Research Economist August 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
Type of Seller in the Most Recent Land Sales*
Price Growth, Past 12 Months (July ) Median Price Change: 4 Percent; Mean Price Change: 4 Percent
Sales Growth, Past 12 Months (July ) Median Percent Sales Growth: 4 Percent Mean Percent Sales Growth: 4 Percent
Agriculture and Recreation 46 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 Transactions 44 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 Rights Variation by Region and Land Type
Type of Land Most Recently Sold Individual/Family
Type of Land Most Recently Sold Corporations/Partnerships
Individual and Corporate Sellers: Majority from Regions 3 and 4
Individuals/Families: The Major Buyers
Major Types of Land Transactions Individual/Family Buyers: Recreation and Agriculture
Major Types of Land Transactions Corporations/Partnerships: Commercial and Development
Major Types of Land Transactions Expansion Farmers: Agriculture
Major Types of Land Transactions Investors: Diversified
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 Conclusions Price, 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 Conclusions Price, 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 Conclusions Price, 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.