Thursday, January 16, 2014

Trends in Land Prices....What are Land Prices Doing?

Well it’s the beginning of a new year and this year like other years gives me a chance to review the numbers and reflect back. By far the most frequent questions I get are….”What are LAND prices doing?....When will LAND prices come back?” The first question is easy; the second question requires a crystal ball and I don’t have one!

Let’s begin by looking at the numbers in the above chart.  Don’t get too caught up in the exact number, trends are more important. I work west central Georgia and I picked three counties I am most active in, Meriwether, Talbot and Harris Counties. I looked at sales on tracts of 20 acres and up. These counties are close to Columbus. There was limited data for 2012 and quite a bit for 2013. As you can see from the chart above, we had precipitous drops year over year until we reached 2012. There appears to be a flattening of prices. Statistically speaking, I am not sure we had a decrease in 2013. Actually there was a lot of activity early in 2013, but things seemed to slow later in the year. I feel like and the data suggests we are at the bottom i.e. we did not see a real decrease from 2012 to 2013.

What’s next? The real estate gurus and professional journals suggest things are getting better. Certainly, housing is improving and in certain metropolitan areas, prices overall are improving. Specific markets are seeing 2005-06 prices again. Well…what about land? Land generally tracks housing, i.e. there is a lag between housing and land. When the demand outpaces supply, developers begin buying land and building houses. I believe we are headed in the right direction. I believe we will see a moderately busy year in land sales. Certainly we are all anxious for an improving market and I believe we are at the doorstep!!!!

FOR SELLERS.... I hope and believe we will begin to see some price improvement before the end of the year. There is a lot of pinned up demand and this will help drive prices. 

FOR BUYERS.... the stars are aligned. We have had 6 years of price reductions and I am not expecting prices to go any lower. Now is the time to buy!

For Information on  buying or  selling  land,  contact G. Kent Morris, ALC, RF   at                  (706) 457-0090