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Sector performance has been volatile in commercial real estate, but “land demand has held on very well,” said Lawrence Yun, chief economist at the National Association of REALTORS®, during a webinar highlighting results of NAR’s 2023 Land Market Survey.
“By type of land, residential, industrial and timber land posted the strongest price growth, in line with pre-COVID performance,” said Oleh Sorokin, co-presenter and NAR data analyst for commercial real estate.
The survey analyzed 2023 transaction data in 10 U.S. regions reported by members of the REALTORS® Land Institute.
Here are the six highlights:
1. Land sales: Land sales grew 1.2%. Although this marks a slower pace compared to past performance, the data point highlights the market’s resilience.
2. Land value: As of 2023’s third quarter, the underlying value of the land of household-owned real estate totaled $18.6 trillion, up from $17.2 trillion in 2022 Q3.
3. Length of time for purchase: Land sales generally concluded within 60 days, and 25% of these transactions are wrapped up in less than 30 days.
4. Land price growth: Growth in land price per acre adjusted to a rate of 1.9% on average in 2023. By type of land, residential, industrial and timber land posted the strongest price growth of 1.9% to 2.9%. Timber and ranch land prices also have increased since the end of the pandemic.
5. Hottest markets: Regions 1, 9 and 10 had the largest increases in land sales, in the range of 2.8% to 3.7%.
6. Most expensive residential land: Region 1 had the highest prices for residential land, commanding up to $200,000 per acre.
