While so many industries are suffering because of COVID-19, rural real estate is booming. Winter is traditionally real estate’s slow season, but the hot real estate land market isn’t cooling down. Land agents across the country are still seeing record demand for rural properties.
The land market took off in 2019 and has yet to slow down; ever since, it’s been no stranger to low inventory- it’s one of the biggest challenges in the current market. Buyers are actively searching for and purchasing land, but there just isn’t enough land for sale to meet the growing demand. When there are more buyers searching for rural land, and fewer sellers looking to list their property, the market is tipped in the seller’s favor. This is commonly referred to as a “sellers market”.
The pandemic lockdowns, the upswing in the number of companies who have adopted remote working, and social unrest have buyers hunting feverishly for properties in small towns and rural counties. People are fleeing to rural retreats to have more space while they’re quarantined. Additionally, historically low interest rates and stock market uncertainty have had investors locking up safe haven assets like land.
Hunting and fishing were social distancing activities before it was a thing. In a recent article, The Washington Post reported that officials in nearly every state have seen a moderate-to-massive spike in hunting in 2020. Here at LANDFLIP, we can verify that since the shutdown began last March, “farmland” and “off-grid” have been the most searched keywords on the LANDFLIP NETWORK, and the most viewed properties are 100 acres or less.
Are you considering selling your land? Well, now may be the perfect time. As a landowner in a seller’s market, you’ll have the upper hand. Here are three ways low inventory can help you win if you’re ready to jump in and take advantage of the hot land market.
1. Prices Soar
With so many more buyers in the market than available land for sale, sellers can expect to get a great price for their property. The fierce competition due to low inventory will often cause a bidding war. During bidding wars, buyers will make competing offers and drive up the price, typically above what the seller initially asked for. As a seller, this could potentially net you more for your property when the transaction closes.
2. Greater Return on Investment
The value of your land is based on what willing buyers in the market will pay for it, but every buyer is different. The more your property appreciates from the purchase price, the more profit you’ll net at resale. Rising prices mean your land is going to gain value, which increases equity. Rural land is inherently an appreciating asset for two simple reasons: limited supply and increasing demand. Land will increase in value as demand grows for the limited asset. It’s not a question of whether or not land appreciates, but rather how much it will appreciate. Unfortunately, it’s hard to predict an exact rate of appreciation, since that’s based on things that are always changing. Sellers can make improvements to their land over years or decades to increase its equity value while enjoying it.
3. As The Seller, You Set the Terms
In the current market, sellers are holding the upper hand. As a seller, you have the power to sell on your own terms. When the land market isn’t as competitive, deal sweeteners like certain improvements or asking the seller to pay for closing costs are concessions the buyer can ask the seller to pay for in the contract. However, most seller concessions are lost in a bidding war, since you don’t have to entice the buyer. If you are emotionally invested and looking for a buyer that will love, care, or continue conservation efforts on your property, as a seller in a hot market, you have the privilege to be selective in which offer to choose.
If inventory is low, buyers are more likely to use an agent to locate land for sale either before they come on the market or immediately upon listing. Most of the time, land agents are looking on the top land for sale websites like the LANDFLIP NETWORK or talking with other agents in order to find new listings for their buyers. For the most exposure for your sale, secure the services of a local land agent to advertise your land for sale to take advantage of the multiple buyers that are actively looking.