The land market had an ideal yr in 2021, with gross sales up practically 6% and outperforming the tempo of acquisitions of different business actual property sorts. The 2021 Land Market Survey revealed this excellent news primarily based on analysis from the REALTORS® Land Institute and the Nationwide Affiliation of REALTORS®.
The annual survey seems to be at land transactions of members of RLI and NAR. Respondents to the most recent survey reported the very best land gross sales efficiency for the reason that organizations started recording the numbers in 2014. Driving the demand for land have been traditionally low mortgage charges, which drove house gross sales, the historic web absorption of multifamily and industrial business house, and the resiliency of the retail property market.
Different property sorts noticed gross sales progress in 2021—singlefamily rental gross sales have been up 5%; industrial property gross sales have been up 4%, gross sales of Class A condominium buildings have been up 2%, and gross sales of Class B/C condominium buildings have been up 3%—however none matched the expansion of land gross sales.
RESIDENTIAL, INDUSTRIAL, RECREATIONAL SALES UP 5% TO 7%
Residential, industrial, and leisure have been the most well liked classes of land gross sales, with REALTORS® reporting a median gross sales enhance of 5% to 7% in these classes. Land gross sales for workplace and retail use additionally rose about 3% in 2021 after staying flat in 2020. Residential land gross sales accounted for 59% of all land gross sales by NAR and RLI members.
Residential land gross sales accounted for practically 4% of the mixed gross sales of residential properties (single-family houses, condominiums, manufactured houses, residential land), up from about 3% in 2020, in accordance with NAR’s REALTORS® Confidence Index Survey, a month-to-month survey of transactions of members engaged in residential actual property.
As of the fourth quarter of 2021, the underlying worth of the land of actual property owned by households totaled $15 trillion, up from $13 trillion the earlier yr, in accordance with Federal Reserve Board knowledge. NAR estimates that land is 40% of the entire worth of family actual property belongings after deducting the worth of the construction, primarily based on alternative worth, from the entire worth of the true property belongings held.
The states with the biggest shares of land gross sales have been:
- Texas (15%)
- Florida (13%)
- California (6%)
- Georgia (5%)
- Arizona (5%)
Collectively, they garnered 44% of land gross sales in 2021.
LAND MARKET OUTLOOK FOR 2022
NAR Chief Economist Lawrence Yun famous within the survey report that he expects 2022 to stay a robust yr for the land market. “Even with rising rates of interest, I anticipate sustained progress in land gross sales and costs this yr, pushed significantly by the demand for multifamily and single-family housing. The shift from just-in-time to just-in-case stock administration … will proceed to drive the demand for land for brand new warehouses. Furthermore, agricultural grain costs will stay elevated as a result of warfare in Ukraine and thereby increase demand for farmland.”
As for challenges, 50% of respondents stated zoning laws contine to hamper improvement. With a shortfall of 6.8 million models since 2000, improvement of residential heaps is crucial to addressing the housing scarcity.