land market survey 2015

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

15%

19%

35% 34%

19%

7%

12%

19%

24%

30%

17%

5%

9%

1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1 2 3 4 5 6 Canada Intl,ExCanada

Nu

mb

er

of

Re

spo

nd

en

ts

Region

Regions Where Most Sales Occur Among Respondents

2014Jul Survey 2015Feb Survey

Membership of Respondents

339

431

68

190

294

429

58

177

0

50

100

150

200

250

300

350

400

450

500

REALTORS® Land Inst. NAR CCIM Other

Nu

mb

er

of

re

spo

nd

en

ts

Professional Memberships of Respondents*


*Respondent can identify more than one membership.

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

69%

33%

41%

59%

43% 45%

15%

63%

26%

41%

55%

48%

36%

13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Pe

rce

nt

of

resp

on

den

ts

Types of Land Practice Focuses On


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

Land Prices Increased Across All Types

4%

3%

4% 4%

5% 5%

4% 4%

7% 7%

8% 8%

9% 9%

8% 8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Pe

rce

nt

ch

ange

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


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

Dollar Sales Volume Increased Across All Types

4% 3%

5% 4%

5% 5%

6%

4%

7% 8%

8% 9% 9% 9% 9%

8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Pe

rce

nt

ch

ange

Median Percent Change in Dollar Sales in Past 6 Months*


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

Price Outlook: Median Expected Annual Percent Change in Prices ($/acre) for Jan-June 2015

1.5%

2.1%

2.8% 2.7%

3.3%

2.9%

3.2%

2.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Pe

rce

nt

chan

ge

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

Price Outlook: Generally Modest Growth, But With Expectations of Price Decrease and Increase for Jan-June 2015

0%

10%

20%

30%

40%

50%

60%

worse than-20%

-20% to -10%

-10% to -5%

-5% to 0% 0% to 5% 5% to 10% 10% to20%

over 20%

Pe

rce

nt

dis

trib

uti

on

, by

Typ

e o

f La

nd

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

Sales Outlook for Jan-June 2015: 87 Percent Expect “About the Same” to “Stronger” Growth

22% 13% 13% 8% 9% 12%

5% 13%

51% 61% 56%

54% 51% 52% 55%

54%

27% 26% 31% 38% 39% 36% 41%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Outlook for Dollar Sales in Jan-June 2015

Weaker About the Same Stronger

Characteristics of Land Sales*

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

Regions 3 and 4 Account for Most of Land Sold

11% 13%

30%

26%

15%

5%

10.0%

16.9%

21.9%

28.3%

13.6%

3.8% 5.0%

0.5% 0%

5%

10%

15%

20%

25%

30%

35%


Pe

rce

nt

of

resp

on

den

ts

Region

Location of Land Most Recently Sold (Percent distribution)


Agriculture and Recreation are Major Types of

Land Sold

10%

15%

11% 13%

21%

13%

10% 8% 8%

17%

7%

14%

23%

15%

7%

10%

0%

5%

10%

15%

20%

25%

Pe

rce

nt

dis

trib

uti

on

of

resp

on

ses

Type of Land Most Recently Sold by Respondent


Types of Land Recently Sold by Respondents in Regions*

13%

61%

12% 20% 21% 25% 24%

13%

6%

28%

31% 18% 6% 10%

23%

13%

26%

29%

29%

13% 5%

33%

7% 20%

8%

14%

13% 29%

50%

3% 4% 8% 5%

5%

19%

19% 50%

18% 10% 7% 6%

13% 25%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Pe

rce

nt

dis

trib

uti

on

by

regi

on

Type of Land Most Recently Sold in Past 6 Months

(July-Dec 2014) by Region*

Other

Commercial

Development

Recreation

Timber/Ranch

Agriculture

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

Acreage Sold by Region

44

98

82

104

129

64

81

20

80

103

113

61

20 20 12

80

0

20

40

60

80

100

120

140


All

Acr

es

Median Acres Based on Most Recent Land Sold, By Region

July 2014 Survey 2015Feb Survey

Acreage Sold By Type of Land

160

117

202

294

81

17 5

23

81

250

130

220

150

88

10 8 18

80

0

50

100

150

200

250

300

350

Acr

es

Median Acres Based on Most Recent Land, By Type of Land

July 2014 Survey 2015Feb Survey

Median Price Per Acre By Region: In the U.S., Regions 5 & 6 Had Highest Price Increase

$6,666

$9,000

$4,000

$4,000

$7,450

$5,000

$5,125

$8,250

$8,275

$4,326

$4,000

$15,000

$23,000

$35,000

$80,000

$6,200

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000

1

2

3

4

5

6

Canada

Intl,Ex Canada

All

Median Price Per Acre

Median Price Per Acre Based on Most Recent Land Sales , By Region

2015Feb Survey July 2014 Survey

Median Price Per Acre By Type of Land: Commercial and Development Had Highest Price Increase

$9,125

$6,000

$5,500

$2,075

$4,150

$3,000

$40,000

$96,875

$5,125

$9,250

$6,000

$5,688

$1,950

$3,250

$3,100

$56,500

$100,000

$6,200

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000

Other

Agri-irrig

Agri-non-irrig

Timber

Ranch

Recreation

Development

Commercial

All

Median Price Per Acre

Median Price Per Acre Based on Most Recent Land Sales, By Type of Land

2015Feb Survey July 2014 Survey

Individuals/Families: The Major Buyers Multiple Responses As Appropriate

58%

17%

10%

17%

1% 6%

61%

15% 9%

23%

3% 5%

0%

10%

20%

30%

40%

50%

60%

70%

Pe

rce

nt

of

resp

on

den

ts

Type of Buyer in Most Recent Land Sale Transaction


Individuals/Families: Recreation Land Was Major Preference

8%

16%

10%

17%

32%

5% 2%

12% 9%

11%

6%

17%

31%

10%

2%

14%

0%

5%

10%

15%

20%

25%

30%

35%

Pe

rce

nt

of

Ind

ivid

ual

s/Fa

mili

es B

uye

rs

Type of Land Bought by Individual Buyers

July 2014 Survey Feb 2015 Survey

Corporate Buyers: Development and Commercial Were Major Preferences

4%

10%

17%

6% 4%

30%

26%

3%

9% 7%

5%

12% 11%

28%

25%

4%

0%

5%

10%

15%

20%

25%

30%

35%

Pe

rce

nt

of

Co

rpo

rate

Bu

yers

Type of Land Bought by Corporate Buyers


Expansion Farmers: Non-irrigated Agriculture Land Was Major Preference

30%

55%

0%

13%

0% 0% 0% 3%

11%

60%

3%

17%

3% 0%

3% 3%

0%

10%

20%

30%

40%

50%

60%

70%

Pe

rce

nt

of

Exp

ansi

on

Far

me

rs B

uye

rs

Type of Land Bought by Expansion Farmer Buyers


Investor Buyers: Non-irrigated Agriculture and Development Land Were Major Preferences

9%

13%

20%

9%

13%

17%

14%

6% 4%

29%

14% 12%

10%

21%

5% 4%

0%

5%

10%

15%

20%

25%

30%

Pe

rce

nt

of

Inve

sto

r B

uye

rs

Type of Land Bought by Investor Buyers


Foreign and Other Buyers: Development and Commercial Land Were Major Preferences

11%

15%

7%

18%

13%

18%

9% 9% 10%

7%

3% 3% 3%

31%

21% 21%

0%

5%

10%

15%

20%

25%

30%

35%

Pe

rce

nt

of

Fore

ign

an

d O

the

r B

uye

rs

Type of Land Bought by Foreign and Other Buyers


Individuals/Families: The Major Sellers Multiple Responses As Appropriate

72%

23%

7%

74%

14%

3%

12%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Pe

rce

nt

of

Re

spo

nd

en

ts

Type of Seller in the Most Recent Land Sales*

2014Jul Survey 2014Jul Survey

Individuals/Families: Sold Mostly Recreation and Non-Irrigated Agricultural Land

10%

18%

11%

14%

22%

8% 7% 9% 9%

19%

6%

16%

24%

12%

4%

10%

0%

5%

10%

15%

20%

25%

30%

Pe

rce

nt

of

Ind

ivid

ual

s/Fa

mili

es S

elle

rs

Type of Land Most Recently Sold by Individual/Family Sellers


Corporate/Partnerships: Sold Mostly Development Land

6% 5%

17%

12%

17%

24%

14%

5% 5%

9% 9%

13%

18%

25%

11% 9%

0%

5%

10%

15%

20%

25%

30%P

erc

en

t o

f C

orp

ora

te/P

artn

ers

hip

s Se

llers

Type of Land Most Recently Sold by Corporations/Partnerships

Days on Market Agricultural Land Sold More Quickly. Commercial Land Took the Longest.

60 73

120

153 150

123

237

180

120 104

60

105

180

149 150

212

150

120

0

50

100

150

200

250

Day

s o

n M

arke

t

Median Days on Market of Most Recent Land Sales , By Type of Land


Mineral Rights Conveyed in 61 Percent of Transactions

60% 61%

26% 25%

14% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Pe

rce

nt

of

Re

spo

nd

en

ts

Did Mineral Rights Convey?

Not Applicable

No

Yes

Regions 2 and 3: Highest Share of Land Sales Where Mineral Rights Conveyed to Total Region’s Land Sales

53%

76%

68%

53% 51%

57% 60%

68%

75% 71%

56% 53% 50%

21%

0%

61%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


All

Pe

rce

nt

shar

e t

o r

egi

on

's s

ale

s

Land Sales Where Mineral Rights Conveyed, As Percent of Sales of the Region


Land Sales Where Mineral Rights Conveyed, As Percent of Land Sales, by Type

75% 77%

67%

57% 60%

37%

49% 53%

60%

70% 76% 72%

55%

71%

48%

37% 44%

61%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Pe

rce

nt

shar

e t

o la

nd

sal

es,

by

typ

e

Land Sales Where Mineral Rights Conveyed, As Percent of Sales by Type of Land

Regions 5 and 6: Highest Share of Irrigated Land Sales Relative to Total Region’s Land Sales

2% 5%

11% 9%

44%

19%

14%

8% 7% 9% 9%

37%

31%

21%

50%

14%

0%

10%

20%

30%

40%

50%

60%


All

Pe

rce

nt

shar

e

Percent of Irrigated Land Sales to Region's Sales


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

(68 percent down payment)

30% 33%

21%

38%

32% 31% 28%

31% 31% 33% 34%

28% 29%

37%

29%

23%

35% 32%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Pe

rce

nt

of

the

lan

d t

ran

sact

ion

val

ue

fin

ance

d

Average Percent of the the Value of the Transaction Thas Was Financed, By Type of Land


Major Conclusions

• Strong land market in July-Dec 2014, with sales growth at8 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 thestrongest 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, whileCommercial land sold within 9 months.

• Regions 2 and 3 had highest share of the region’stransactions where mineral rights conveyed.

• Regions 5 and 6 had highest share of the region’ssales for irrigated land; also, about half of land soldinternationally (except Canada) was irrigated .

• On average, about 32 percent of the value of thetransaction was financed (68 percent down payment).

land market survey 2015

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