For those who may not be familiar with The Land Market Survey, it is an annual report published with the collaboration between the REALTORS® Land Institute and the National Association of REALTORS® Research Group. This is a tool for real estate land professionals in all sectors of the business to use for bench-marking and as an informational resource when conducting business. The survey is designed to reveal current trends and the current state of land markets across the US.
So, how would this interest a land owner if its an industry tool?
I will let you in on a little secret.... these survey results give a prediction for the next year that may guide a land owner on whether to sell or hold, or look for other ways to conduct business on his or her property to increase value for a future sale.
Now let's get into the report... So, this report was published on April 20, 2021 (later than usual - normally in January or February) by The Realtors® Land Institute and National Association of Realtors® Research Group, releasing the results of their annual Land Markets Survey. The survey is available below in it's entirety via a slideshow. It outlines multiple property types and markets. For this post I am going to focus on residential land.
As we review this report at the beginning of November 2021, one may ask, "With the year almost over, why should I care about the predictions for 2021? First, we all know nothing was normal for 2020 and thus far into 2021, so I implore you to read further to do a little comparison to a previous year's reports, to see what the numbers show us. I promise you that the numbers will interest you.
Starting off, as this snippet above from the 2020 report shows, respondents expect the strongest sales growth in sales of residential land (5.9%) with prices rising on average by 5% for 2021. Now, since we know 2020 was not a year that could be analyzed easily, let's take a quick look back at what the survey respondents predicted for 2020 in the 2019 Report - as shown in the snippets below along with the link in the reference section at the bottom.
Let's compare notes: The 2019 report prediction below states for 2020, that the sales volume would increase for residential land and others by 2.2%, with a price growth at a slower pace of 1.6%.
IMAGE: 2019 Land Market Survey Survey Highlight for Residential
Now, let us compare this to what the latest report for 2020 shows - to see if we met or exceeded their predictions for 2020, for both sales volume and sales price.
The 2020 Land Market Survey Report states below that land sales rose across all types of land as led by Residential and Industrial Lands, with the graph showing a 6% sales growth increase in 2020 - with the previous report predicting a 2.2% increase.
IMAGE: 2020 Land Market Survey Survey - Land Sales Volume Data
The 2020 Land Market Survey Report states below that land sales prices rose across all types of land as led by Residential and Industrial Lands, with the graph showing a 6.8% sales price increase in 2020 - with the previous report predicting much less at 1.6% increase.
IMAGE: 2020 Land Market Survey - Sales Price Data
To read the entire 2020 Land Market Survey Report, flip through the slideshow below or use the link in the reference section at the bottom.
In conclusion, with the prediction for residential land sales and prices to increase for 2021, the question at the end of this year won't be, "will we exceed those numbers? But, by how much? Double, triple?" In reality, we will only have a few months to wait until the next survey results are compiled and published. We will revisit this report in the spring of 2022 to see the answer to that question.
But wait, what does this all mean to a land owner TODAY?
Based on their personal situation, the questions may be, "do I list my property for sale now, or wait till 2022? Will I get a higher sales price for my property if I wait to list it?" That is a very common question and not easily answered.
Overall, the market for residential land in Central Florida has been positive regardless of COVID-19 for both 2020 and thus far into 2021. With many experts debating about whether we are about to enter into a "Real Estate Bubble," the fact remains that our country as a whole is experiencing a housing shortage. This alludes to the fact that developable land will always be in demand, with the largest variables being location and land use per zoning laws.
As a real estate professional, I advise any land owner to begin the conversation with me to develop a plan of action. This gives me the chance to understand your personal needs and what your land offers you as an investment. Let's start the discussion, regardless if a sale happens now or in the future. Knowledge is priceless and I am here to share it.
©Copyright 2021 Reinvest In Orlando - Theresa M. Kraa, REALTOR®, NHCB
Reference Links
2020 Report
2019 Report
The Realtors® Land Institute