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Land Market Survey 2015

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The REALTORS® Land Institute and The National Association of REALTORS® are pleased to present the findings of the 2015 LAND MARKET SURVEY. This report is the only one of its kind and contains pertinent details about the current state of the real estate land markets.

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Land Market Survey 2015

  1. 1. 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
  2. 2. 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.
  3. 3. 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,Ex Canada NumberofRespondents Region Regions Where Most Sales Occur Among Respondents 2014Jul Survey 2015Feb Survey
  4. 4. 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 Numberofrespondents Professional Memberships of Respondents* 2014Jul Survey 2015Feb Survey *Respondent can identify more than one membership.
  5. 5. 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%).
  6. 6. Market Conditions and Outlook
  7. 7. 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% Percentofrespondents Types of Land Practice Focuses On 2014Jul Survey 2015Feb Survey *Other includes residential , equine, coastal/beach, hobby farms
  8. 8. 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% Percentchange Median Percent Change in the Price of Land ($/acre) in Past 6 Months* 2014Jul Survey 2015Feb Survey * July-Dec 2014 compared to the same period in 2013
  9. 9. Dollar Sales Volume Increased Across All Types 4% 3% 5% 4% 5% 5% 6% 4% 7% 8% 8% 9% 9% 9% 9% 8% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Percentchange Median Percent Change in Dollar Sales in Past 6 Months* 2014Jul Survey 2015Feb Survey * July-Dec 2014 compared to the same period in 2013
  10. 10. Price Outlook: Median Expected Annual Percent Change in Prices ($/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% Percentchange Median Expected Change in Price of Land ($/acre) for Jan-June 2015 Compared to Same Period in 2014
  11. 11. Price Outlook: Generally Modest Growth, But With Expectations of Price Decrease and Increase for Jan-June 2015 0% 10% 20% 30% 40% 50% 60% worse than -20% -20% to - 10% -10% to - 5% -5% to 0% 0% to 5% 5% to 10% 10% to 20% over 20% Percentdistribution,byTypeofLand Distribution of Expected Change in Price of Land ($/acre) for Jan-June 2015 Compared to Same Period in 2014 Agricultural Timber Ranch Recreation Development Commercial Other All
  12. 12. 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
  13. 13. Characteristics of Land Sales* * Based on the most recent transaction in July-Dec 2014
  14. 14. 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% 1 2 3 4 5 6 Canada Intl,Ex Canada Percentofrespondents Region Location of Land Most Recently Sold (Percent distribution) 2014Jul Survey 2015Feb Survey
  15. 15. 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% Percentdistributionofresponses Type of Land Most Recently Sold by Respondent 2014Jul Survey 2015Feb Survey
  16. 16. 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% 1 2 3 4 5 6 Canada Intl,Ex Canada Percentdistributionbyregion 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 respondents for R6 and 2 respondents for International – Excluding Canada.
  17. 17. 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 1 2 3 4 5 6 Canada Intl,Ex Canada All Acres Median Acres Based on Most Recent Land Sold, By Region July 2014 Survey 2015Feb Survey
  18. 18. 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 Acres Median Acres Based on Most Recent Land, By Type of Land July 2014 Survey 2015Feb Survey
  19. 19. 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
  20. 20. 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
  21. 21. 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% Percentofrespondents Type of Buyer in Most Recent Land Sale Transaction 2014Jul Survey 2015Feb Survey
  22. 22. 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% PercentofIndividuals/FamiliesBuyers Type of Land Bought by Individual Buyers July 2014 Survey Feb 2015 Survey
  23. 23. 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% PercentofCorporateBuyers Type of Land Bought by Corporate Buyers July 2014 Survey Feb 2015 Survey
  24. 24. 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% PercentofExpansionFarmersBuyers Type of Land Bought by Expansion Farmer Buyers July 2014 Survey Feb 2015 Survey
  25. 25. 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% PercentofInvestorBuyers Type of Land Bought by Investor Buyers July 2014 Survey Feb 2015 Survey
  26. 26. 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% PercentofForeignandOtherBuyers Type of Land Bought by Foreign and Other Buyers July 2014 Survey Feb 2015 Survey
  27. 27. 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% PercentofRespondents Type of Seller in the Most Recent Land Sales* 2014Jul Survey 2014Jul Survey
  28. 28. 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% PercentofIndividuals/FamiliesSellers Type of Land Most Recently Sold by Individual/Family Sellers July 2014 Survey Feb 2014 Survey
  29. 29. 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% PercentofCorporate/PartnershipsSellers Type of Land Most Recently Sold by Corporations/Partnerships
  30. 30. 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 DaysonMarket Median Days on Market of Most Recent Land Sales , By Type of Land 2014Jul Survey 2015Feb Survey
  31. 31. 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% 2014Jul Survey 2015Feb Survey PercentofRespondents Did Mineral Rights Convey? Not Applicable No Yes
  32. 32. 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% 1 2 3 4 5 6 Canada Intl,Ex Canada All Percentsharetoregion'ssales Land Sales Where Mineral Rights Conveyed, As Percent of Sales of the Region 2014Jul Survey 2015Feb Survey
  33. 33. 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% Percentsharetolandsales,bytype Land Sales Where Mineral Rights Conveyed, As Percent of Sales by Type of Land
  34. 34. 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% 1 2 3 4 5 6 Canada Intl,Ex Canada All Percentshare Percent of Irrigated Land Sales to Region's Sales 2014Jul Survey 2015Feb Survey
  35. 35. 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% Percentofthelandtransactionvaluefinanced Average Percent of the the Value of the Transaction Thas Was Financed, By Type of Land 2014Jul Survey 2015Feb Survey
  36. 36. 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).
  37. 37. 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 region’s transactions where mineral rights conveyed. • Regions 5 and 6 had highest share of the region’s 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).

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