Rural Land Brokers See an Increase in Business

Land brokers got a lot busier during the pandemic.

Almost 22% of land brokers experienced a significant increase in business, while 33.6% saw some growth during the pandemic. Twenty-five percent saw no change, according to the first land real estate agent and broker survey from National Land Realty.

Land values also went up during the pandemic. For 44.5% of respondents, land increased between 1% and 5%. Another 5% saw land increase significantly, while 29% saw no change.

During the pandemic, more than 60% of brokers saw an increase in land values, especially for recreational land and farmland. Five percent of respondents said that land rose significantly, while 29% saw no change. Recreational land increased 50.9%, followed by farmland at 18%

Almost 40% of respondents said that the price per acre for properties over 100 acres was $1,500 to $2,500 before COVID hit. Around 30% said it was $3,500 or more, and about 25% said it was $2,500 to $3,500.

Now, more than 30% said that the price per acre for properties over 100 acres is $3,500 or more, while less than 40% say it is $1,500 to $2,500.

“Investors rediscovered a safe haven in land real estate in 2020, which made for a very good year for land sales, with record-breaking volume in the second half of the year,” said Jason Walter, CEO of National Land in a prepared statement.

National Land Realty survey backed up other data that says people left major cities in 2020. It found 12.7% of buyers came from major metro areas like Atlanta, while 25.4% arrived from smaller metro areas like Austin. Twenty-nine percent came from the suburbs.

While 2020 was a good year for land, 2021 could be even better. More than 83% of agents told National Land Realty they are optimistic or somewhat optimistic about land real estate’s performance over the next 12 to 18 months.

Other observers also see strong growth in the land market. “I think the [land] market will grow at a much more rapid pace,” says Omar Eltorai, market analyst at Reonomy. 

Land has traditionally been viewed as an alternative investment. While Eltorai doesn’t think the land market will necessarily go mainstream, he does believe it will get more attention. If institutions move into the space, it could speed up changes.

“The movement of institutions into this space is likely to speed up consolidation that’s already been underway,” Eltorai says.

Twenty-six percent of agents tell National Land Realty that their business will grow by more than 10%, while 26% think it will grow between 6% to 10%. Almost 24% say their business will grow as much as five percent.

Despite the generally positive commentary, agents that National Land Realty surveyed said that geopolitical risk (23.6% of respondents), financing or interest rate risk (20%) and COVID-related issues (17%) were potential challenges.