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REALTORS Land Institute

February 2015 Land Business Survey


Conducted by the National Association of REALTORS

Lawrence Yun, Senior Vice President & Chief Economist


Jed Smith, Managing Director, Quantitative Research
Gay Cororaton, Research Economist
March 2015

About the REALTORS Land Institute-NAR


February 2015 Land Business Survey
Objective: gather information about the land business for the period July-Dec
2014 and the outlook for Jan-June 2015.
Survey was conducted from Feb 23 Mar 17, 2015.
REALTORS Land Institute sent the online survey to its 1,000 members plus
approximately 9,500 non-members.
Responses: 619 responses; approximately the same as in the July 2014 survey
(629 responses); 52 percent were members of the REALTORS Land Institute.
Regions 3 (KY, TN, NC SC, GA, AL, MS, FL) and 4 ( KS, MO, AR, LA, OK, TX)
accounted for approximately 54 percent of respondents.
Survey asked characteristics about the most recent transaction in July-Dec
2014.
New items.
Canada, and International, Excluding Canada were included as
geographic areas of land practice.
Price and Sales Outlook for Jan-June 2015.

Regions 3 and 4: Top Respondent Practice Regions


Regions Where Most Sales Occur Among Respondents
2014Jul Survey

2015Feb Survey

40%
35%

Number of Respondents

35%

34%

30%

30%
24%

25%
19% 19%

20%
15%

19%

15%
12%

10%

17%
9%

7%
5%

5%

1%

0%
1

5
Region

Canada

Intl,Ex
Canada

Membership of Respondents
Professional Memberships of Respondents*

Number of respondents

2014Jul Survey

500
450
400
350
300
250
200
150
100
50
0

431

2015Feb Survey

429

339
294
190

68

REALTORS Land Inst.


*Respondent can identify more than one membership.

NAR

177

58

CCIM

Other

Highlights of the REALTORS Land Institute-NAR


Land Business Survey
Prices and Sales, Up: July 2014 Survey reported dollar sales
growth at 4 percent, past 12 months. February 2015 Survey
reports 8 percent sales growth in last 6 months, ending December
2014.
Outlook, first half of 2015: Strong land sales with modest price
growth.
87 percent expect about the same to stronger growth in sales.
Commercial, Recreation, Development , and Other (includes
residential) are strongest markets.
2.5 percent price growth for first part of 2015, compared to 8 percent
price growth, last part of 2014.

Major practice areas: Agricultural (63 percent), Recreation (55


percent), and Development (48 percent).
Individuals are major buyers (61%), followed by investors (23%).

Market Conditions and Outlook

Types of Land Practice Among Respondents


Multiple Responses as Appropriate
Types of Land Practice Focuses On
80%

70%

2014Jul Survey
69%

Percent of respondents

63%

59%

60%
50%
40%
30%

2015Feb Survey

41% 41%

55%
48%
43%

45%
36%

33%
26%

20%

15%

10%

0%

*Other includes residential , equine, coastal/beach, hobby farms

13%

Land Prices Increased Across All Types


Median Percent Change in the Price of Land ($/acre) in Past 6 Months*
2014Jul Survey

2015Feb Survey

10%

9%

9%

8%

8%

9%
8%

8%

8%

7%

7%

Percent change

7%
6%
5%
4%

4%

4%

5%
4%

3%

3%
2%
1%
0%

* July-Dec 2014 compared to the same period in 2013

5%

4%

4%

Dollar Sales Volume Increased Across All Types


Median Percent Change in Dollar Sales in Past 6 Months*
10%

2014Jul Survey

9%

8%

9%
8%

8%

8%
Percent change

9%

2015Feb Survey
9%
9%

7%

7%

6%

6%
5%

5%
4%

4%

3%

3%
2%
1%
0%

* July-Dec 2014 compared to the same period in 2013

4%

5%

5%

4%

Price Outlook: Median Expected Annual Percent


Change in Prices ($/acre) for Jan-June 2015
Median Expected Change in Price of Land ($/acre) for Jan-June 2015
Compared to Same Period in 2014
3.3%

3.5%

2.8%

Percent change

3.0%
2.5%

2.1%

2.0%
1.5%
1.0%
0.5%
0.0%

1.5%

2.7%

3.2%
2.9%
2.5%

Price Outlook: Generally Modest Growth, But With


Expectations of Price Decrease and Increase for Jan-June 2015

Percent distribution, by Type of Land

Distribution of Expected Change in Price of Land ($/acre) for


Jan-June 2015 Compared to Same Period in 2014
Agricultural

Timber

Ranch

Recreation

Development

Commercial

Other

All

60%
50%
40%
30%
20%

10%
0%
worse than -20% to -20%
10%

-10% to - -5% to 0% 0% to 5% 5% to 10%


5%

10% to
20%

over 20%

Sales Outlook for Jan-June 2015: 87 Percent Expect


About the Same to Stronger Growth
Outlook for Dollar Sales in Jan-June 2015
Weaker

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

27%

51%

22%

26%

61%

13%

31%

56%

13%

About the Same

38%

Stronger

39%

36%

54%

51%

52%

8%

9%

12%

41%

33%

54%
55%

5%

13%

Characteristics of Land Sales*

* Based on the most recent transaction in July-Dec 2014

Regions 3 and 4 Account for Most of Land Sold


Location of Land Most Recently Sold
(Percent distribution)
2014Jul Survey

2015Feb Survey

Percent of respondents

35%
30%

30%
25%

21.9%

20%
15%
10%

28.3%
26%

16.9%

15%
13.6%

13%
11%
10.0%

5%

5%

5.0%
3.8%
0.5%

0%
1

5
Region

Canada

Intl,Ex
Canada

Agriculture and Recreation are Major Types of


Land Sold
Type of Land Most Recently Sold by Respondent
Percent distribution of responses

2014Jul Survey

2015Feb Survey

25%

23%
21%

20%

17%

15%

15%
10%
5%
0%

11%

10%
8%

7%

13%

14%

15%
13%
10%

10%
7%

8%

Types of Land Recently Sold by Respondents in Regions*


Type of Land Most Recently Sold in Past 6 Months
(July-Dec 2014) by Region*

Percent distribution by region

100%
90%

18%

80%

3%

13%

70%
60%

10%
4%
7%

33%

30%
20%
10%
0%

6%
5%
8%

20%

23%

25%

13%

29%

13%
18%

6%

20%

21%

25%

24%

Development
Recreation
50%

13%
13%
1

12%
2

Other
Commercial

5%
10%

28%

50%

19%
29%

31%

14%
19%

14%

26%

61%

13%
5%

29%

6%

50%
40%

7%
8%

Timber/Ranch
Agriculture

Canada Intl,Ex
Canada

*Results for Region 6 and International- Excluding Canada need to be taken with caution; 16 respondents
for R6 and 2 respondents for International Excluding Canada.

Acreage Sold by Region


Median Acres Based on Most Recent Land Sold, By Region
July 2014 Survey
140

129

120
103

98

100

Acres

2015Feb Survey

80

80

113
104

82

81

61

64

60
44
40
20

20

20

20
12

Canada

Intl,Ex
Canada

All

80

Acreage Sold By Type of Land


Median Acres Based on Most Recent Land,
By Type of Land
July 2014 Survey

2015Feb Survey

350
294

300

Acres

250
200
150

100
50
0

250

220
202
160
130
117

150

81

88

81
17 10

5 8

23 18

80

Median Price Per Acre By Region: In the U.S., Regions


5 & 6 Had Highest Price Increase
Median Price Per Acre Based on Most Recent Land Sales , By Region
2015Feb Survey

July 2014 Survey

$6,200
$5,125

All

$80,000

Intl,Ex Canada
$35,000

Canada
6

$5,000

$23,000

$15,000
$7,450
$4,000
$4,000
$4,326
$4,000
$8,275
$9,000
$8,250
$6,666

5
4
3
2

1
$0

$10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000


Median Price Per Acre

Median Price Per Acre By Type of Land: Commercial


and Development Had Highest Price Increase
Median Price Per Acre Based on Most Recent Land Sales, By Type of Land
2015Feb Survey

July 2014 Survey

$6,200
$5,125

All

$100,000
$96,875

Commercial
Development

$40,000

$56,500

$3,100
$3,000
$3,250
$4,150
$1,950
$2,075
$5,688
$5,500
$6,000
$6,000
$9,250
$9,125

Recreation
Ranch
Timber
Agri-non-irrig
Agri-irrig
Other

$0

$20,000

$40,000

$60,000
$80,000
Median Price Per Acre

$100,000

$120,000

Individuals/Families: The Major Buyers


Multiple Responses As Appropriate

Type of Buyer in Most Recent Land Sale Transaction


2014Jul Survey

Percent of respondents

70%
60%

2015Feb Survey

58% 61%

50%
40%
30%
20%

10%
0%

23%
17% 15%

17%
10% 9%
1% 3%

6% 5%

Individuals/Families: Recreation Land Was Major


Preference
Type of Land Bought by Individual Buyers

Percent of Individuals/Families Buyers

July 2014 Survey

Feb 2015 Survey

35%

32% 31%

30%
25%
20%
15%
10%
5%
0%

17%17%

16%
11%
8% 9%

14%
12%

10%

10%
6%

5%

2% 2%

Corporate Buyers: Development and Commercial


Were Major Preferences
Type of Land Bought by Corporate Buyers
July 2014 Survey

Feb 2015 Survey

Percent of Corporate Buyers

35%
30%

30%
25%

20%

9%

10%

0%

26%

25%

17%

15%

5%

28%

4%

12%

10%
7%

5%

6%

11%
4%

3% 4%

Expansion Farmers: Non-irrigated Agriculture Land


Was Major Preference
Type of Land Bought by Expansion Farmer Buyers

Percent of Expansion Farmers Buyers

July 2014 Survey

Feb 2015 Survey

70%
60%
55%

60%
50%
40%
30%
20%

30%
17%
13%

11%

10%
0%

0%

3%

0%

3%

0% 0%

0%

3%

3% 3%

Investor Buyers: Non-irrigated Agriculture and


Development Land Were Major Preferences
Type of Land Bought by Investor Buyers
July 2014 Survey
29%

30%

Percent of Investor Buyers

Feb 2015 Survey

25%

20%

17%

15%
10%
5%
0%

21%

20%
13%
9%

14%

9%
4%

14%

12% 13%

10%
5%

6%

4%

Foreign and Other Buyers: Development and


Commercial Land Were Major Preferences
Type of Land Bought by Foreign and Other Buyers

Percent of Foreign and Other Buyers

July 2014 Survey

Feb 2015 Survey

35%

31%

30%
25%

21%
18%

20%
15%
10%
5%
0%

15%

18%
13%

11%10%
7%

21%

9%

7%
3%

3%

3%

9%

Individuals/Families: The Major Sellers


Multiple Responses As Appropriate

Type of Seller in the Most Recent Land Sales*


2014Jul Survey
80%

72%

2014Jul Survey

74%

Percent of Respondents

70%
60%
50%
40%

30%
20%
10%
0%

23%
14%

12%
3%

7% 4%

Individuals/Families: Sold Mostly Recreation


and Non-Irrigated Agricultural Land
Type of Land Most Recently Sold by
Individual/Family Sellers

Percent of Individuals/Families Sellers

July 2014 Survey

Feb 2014 Survey

30%
24%
22%

25%
18%19%

20%
15%
10%

10%

16%
14%
12%

11%
9%

8%
6%

5%
0%

9%

7%
4%

10%

Corporate/Partnerships: Sold Mostly


Development Land
Percent of Corporate/Partnerships Sellers

Type of Land Most Recently Sold by Corporations/Partnerships


30%
25%
24%

25%
20%

15%

13%
12%
9%

10%
6% 5%
5%
0%

18%
17%

17%

5%

14%

11%

9%

9%
5%

Days on Market
Agricultural Land Sold More Quickly. Commercial Land Took the Longest.
Median Days on Market of Most Recent Land Sales ,
By Type of Land
2014Jul Survey

2015Feb Survey
237
212

250

Days on Market

200

180
153

150

120
105

104
100
60
50
0

73

60

180
150 149

150
123

150
120 120

Mineral Rights Conveyed in 61 Percent of


Transactions
Did Mineral Rights Convey?
100%
90%

14%

14%

26%

25%

Percent of Respondents

80%
70%
60%
Not Applicable

50%

No

40%
30%

Yes
60%

61%

2014Jul Survey

2015Feb Survey

20%
10%
0%

Regions 2 and 3: Highest Share of Land Sales Where


Mineral Rights Conveyed to Total Regions Land Sales
Land Sales Where Mineral Rights Conveyed, As Percent of Sales of
the Region
2014Jul Survey

2015Feb Survey

Percent share to region's sales

90%
76% 75%

80%
70%

60%

68%

71%
68%
56%
53%

53%

50%

53%
51%

60% 61%

57%
50%

40%
30%

21%

20%
10%

0%

0%

Canada

Intl,Ex
Canada

All

Land Sales Where Mineral Rights Conveyed, As


Percent of Land Sales, by Type

Percent share to land sales, by type

Land Sales Where Mineral Rights Conveyed, As Percent of Sales


by Type of Land
90%
80%
70%
60%
50%

40%
30%
20%
10%
0%

77% 76%
75%
72%
70%
67%

71%
57%
55%

60% 61%

60%
48%
37%

49%

37%

53%
44%

Regions 5 and 6: Highest Share of Irrigated Land Sales


Relative to Total Regions Land Sales
Percent of Irrigated Land Sales to Region's Sales
2014Jul Survey

2015Feb Survey

60%

50%

50%

Percent share

44%

40%

37%
31%

30%
19%

20%
10%

21%
14% 14%

8%

7%
5%

11% 9%

9%9%

2%
0%
1

Canada

Intl,Ex
Canada

All

On Average, Buyers Financed 32 Percent of the Value of the


Transaction
(68 percent down payment)

Percent of the land transaction value financed

Average Percent of the the Value of the Transaction Thas Was


Financed, By Type of Land
2014Jul Survey
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

38%
33%
30%

33%34%
28%
21%

29%

2015Feb Survey

37%
32%

31%

29% 28%
23%

35%
31%
31% 32%

Major Conclusions
Strong land market in July-Dec 2014, with sales growth at
8 percent.
About 87 percent of respondents expect land sales to be
about the same or stronger in Jan-June 2015, with
prices growing at a modest pace of 2.5 percent.
Recreation, Development, Commercial , and Other
(includes residential) land markets are expected to be the
strongest markets in Jan-June 2015 .
Families/individuals still bulk of buyers (61 percent),
followed by investors (23 percent).
Most land sold was Agriculture (25 percent), Recreation
(23 percent), and Development (15 percent).

Major Conclusions
Agriculture land typically sold with 3 months, while
Commercial land sold within 9 months.
Regions 2 and 3 had highest share of the regions
transactions where mineral rights conveyed.
Regions 5 and 6 had highest share of the regions
sales for irrigated land; also, about half of land sold
internationally (except Canada) was irrigated .
On average, about 32 percent of the value of the
transaction was financed (68 percent down payment).