Recreational Land Prices

[66chevelle]

You have seen similar properties sell for 10-15% less than properties that closed 4-5 months ago or they lowered the pie in the sky prices 10-15%?

I have seen both. There was a 15 acre lot that sold for $285k back in November of 2022. It is back on the marker for $255k. I have seen a bunch drop their asking price also.

 

[66chevelle]

I just found this on tuckers website.

 

[Michigan Slim]

Glad I bought my 40. Tired of the weekly low-ball offers too. We have counter offered for a cool mil on the first 20 and offered the second twenty as a bonus. No answer.
I just wish it were closer. I get there once a month or so though.

 

[INPatriot]

Indiana Real Estate Broker here. Though, I represent Sellers and Buyers with all types of residential and commercial properties, estate-sized single family residential properties and unimproved land are the transactions in which I deal the most for my business. I cannot speak for the entire state, but as a member of the Central Indiana Board of Realtors, I have access to data that can range from North Vernon to Ft Wayne and north of Lafayette to Sullivan and sometimes further south and in between.

Here are some datapoints that I have personally experienced in 2023. This is all objective.

1) I have had more transactions this year that involved out of state buyers than ever before. They have been come from right next door, they have come from the other side of the country and in between. They don't negotiate price. They make favorable terms and conditions to Sellers. They are not asking Sellers to make repairs to properties. They sold high where they lived and are paying cash here. They contribute greatly to the increase in real estate market values.

2) Some of the Buyers want to live in a red state. Some just want to escape a dark blue state. Some want to be around a slower pace. Some want to take advantage of what they believe are really cheap real estate prices. Some come because the real estate may not necessarily be cheaper, but the property taxes are substantially lower, sometimes as much as 60% lower.

3) Properties coming onto the market are based on comparable properties sold. Even with the high interest rates, properties going on the market now, are being priced off 2022 sales and appraisers are approving of contract prices for the Lender.

4) Inventory is still painfully, painfully low and that keeps prices high.

5) Sellers are more engaged, educated and astute when it comes to market analytics and since prices have skyrocketed over the last three years, they are willing to be more patient than they may have been in the past.

6) In some instances, properties are going on the market for twice the assessed value of the neighbor's properties and selling.

7) Land is finite and it is not being made, at least here in Indiana.

Here is some subjective information. I cannot guarantee this will happen but I have a feeling things could go in this direction.

8) In speaking with the Lenders I use most, one for single family residential, the other for unimproved properties and new builds, there is belief that interest rates may come down in 2024 and 2025, maybe even as low as the 3's. That information can be researched so I will not start linking articles. If that is the case, I believe the flood gates will open and the dam will break making Q2 2020-Q3 2022 look like a picnic in terms of the maniacal frenzy that took place when it came to multiple offer situations, bidding, offers, sales prices, high senses of urgency among Buyers and nearly impossible expectations among Sellers. If that does take place, real estate values will skyrocket because the buyers that lost out in all of the hysteria of 2020, 2021 and 2022 will not be left out the go 'round.

9) Something to think about for the long term. The farther governments continue pushing the Green agenda, the more corporations are going to start scooping up tracts of rural land to "offset" their carbon footprint so that they stay off the government's ESG naughty list. That could be the greatest barrier to the middle class owning larger parcels of land. And would be parallel to corporations that are buying single family residential properties by the scores sight unseen with cash to lease for egregious monthly payments, pushing both first time and move up home buyers out of the market as well as pushing independent investors out of the market.

In closing, I will share what I recommend to all Buyers I represent. If a piece of property pops up and it catches your eye, and you know that it's the one, write an offer on the property that is going to give you peace of mind, one that will allow you to sleep at night. If you write a low offer and it is not accepted, you will have gone as far as you were comfortable. But if you write a low offer and it is accepted, then you will have your cake and eat it too. But, if you find a property that you want think you cannot live without, you must be ready to chase it and do whatever is needed to get it when it comes to price.

I know it's hard to believe how expensive land has become, but in 5 or 10 years and beyond, we're going to look back and be shocked at how cheap it was.

 

[Dholcomb]

Indiana Real Estate Broker here. Though, I represent Sellers and Buyers with all types of residential and commercial properties, estate-sized single family residential properties and unimproved land are the transactions in which I deal the most for my business. I cannot speak for the entire state, but as a member of the Central Indiana Board of Realtors, I have access to data that can range from North Vernon to Ft Wayne and north of Lafayette to Sullivan and sometimes further south.

Here are some datapoints that I have personally experienced in 2023. This is all objective.

1) I have had more transactions this year that involved out of state buyers than ever before. They have been come from right next door, they have come from the other side of the country and in between. They don't negotiate price. They make favorable terms and conditions to Sellers. They are not asking Sellers to make repairs to properties. They sold high where they lived and are paying cash here. They contribute greatly to the increase in real estate market values.

2) Some of the Buyers want to live in a red state. Some just want to escape a dark blue state. Some want to be around a slower pace. Some want to take advantage of what they believe are really cheap real estate prices. Some come because the real estate may not necessarily be cheaper, but the property taxes are substantially lower, sometimes as much as 60% lower.

3) Properties coming onto the market are based on comparable properties sold. Even with the high interest rates, properties going on the market now, are being priced off 2022 sales and appraisers are approving of contract prices for the Lender.

4) Inventory is still painfully, painfully low and that keeps prices high.

5) Sellers are more engaged, educated and astute when it comes to market analytics and since prices have skyrocketed over the last three years, they are willing to be more patient than they may have been in the past.

6) In some instances, properties are going on the market for twice the assessed value of the neighbor's properties and selling.

7) Land is finite and it is not being made, at least here in Indiana.

Here is some subjective information. I cannot guarantee this will happen but I have a feeling things could go in this direction.

8) In speaking with the Lenders I use most, one for single family residential, the other for unimproved properties and new builds, there is belief that interest rates may come down in 2024 and 2025, maybe even as low as the 3's. That information can be researched so I will not start linking articles. If that is the case, I believe the flood gates will open and the dam will break making Q2 2020-Q3 2022 look like a picnic in terms of the maniacal frenzy that took place when it came to multiple offer situations, bidding, offers, sales prices, high senses of urgency among Buyers and nearly impossible expectations among Sellers. If that does take place, real estate values will skyrocket because the buyers that lost out in all of the hysteria of 2020, 2021 and 2022 will not be left out the go 'round.

9) Something to think about for the long term. The farther governments continue pushing the Green agenda, the more corporations are going to start scooping up tracts of rural land to "offset" their carbon footprint so that they stay off the government's ESG naughty list. That could be the greatest barrier to the middle class owning larger parcels of land. And would be parallel to corporations that are buying single family residential properties by the scores sight unseen with cash to lease for egregious monthly payments, pushing both first time and move up home buyers out of the market as well as pushing independent investors out of the market.

In closing, I will share what I recommend to all Buyers I represent. If a piece of property pops up and it catches your eye, and you know that it's the one, write an offer on the property that is going to give you peace of mind, one that will allow you to sleep at night. If you write a low offer and it is not accepted, you will have gone as far as you were comfortable. But if you write a low offer and it is accepted, then you will have your cake and eat it too. But, if you find a property that you want think you cannot live without, you must be ready to chase it and do whatever is needed to get it when it comes to price.

I know it's hard to believe how expensive land has become, but in 5 or 10 years and beyond, we're going to look back and be shocked at how cheap it was.

Thanks for taking the time to share! Great post

 

[duanewade]

Yeah, I've got 10 acres, 1/2 wooded, 1/2 meadow I'd let go for about $1,000,000. Family ground so it's worth more to me. Probably not gonna see any takers at my price and that's ok.

I have 34 acres of what used to be a 160 acre family farm that my great-great-grandfather homesteaded in 1837. I have realtors get hold of me quite frequently with me asking to sell the property and I tell them that if they offer me $1,000,000 I might consider but until then to quit asking.

It seems to me that they are using the GIS maps to get names of the property owners.

 

[DoggyDaddy]

I have 34 acres of what used to be a 160 acre family farm that my great-great-grandfather homesteaded in 1837. I have realtors get hold of me quite frequently with me asking to sell the property and I tell them that if they offer me $1,000,000 I might consider but until then to quit asking.

It seems to me that they are using the GIS maps to get names of the property owners.

I do that to the "we want to buy your house" spammers. I have a modest limestone ranch on slightly less than an acre, so when they ask me if I want to sell, I tell them, "Boy I sure do! The price is $20 million and that's firm." They usually hang up after that.

 

[BrockStrader22]

My area it's been $3-$6k for flood land, $5-10K for rec land, $10- (insert infinity sign) for tillable. People are still trying to get $10k for rec land but I've noticed it's all been on the market for a while where last year it would be sold in no time. Tillable has still been crazy, I saw an auction go for $17k/acre for a large plot a month or two ago. I feel like prices shot up too fast and will correct but they aren't going to come down much, historically land value has always gradually increased.

 

[Twangbanger]

Indiana Real Estate Broker here. Though, I represent Sellers and Buyers with all types of residential and commercial properties, estate-sized single family residential properties and unimproved land are the transactions in which I deal the most for my business. I cannot speak for the entire state, but as a member of the Central Indiana Board of Realtors, I have access to data that can range from North Vernon to Ft Wayne and north of Lafayette to Sullivan and sometimes further south and in between.

Here are some datapoints that I have personally experienced in 2023. This is all objective.

1) I have had more transactions this year that involved out of state buyers than ever before. They have been come from right next door, they have come from the other side of the country and in between. They don't negotiate price. They make favorable terms and conditions to Sellers. They are not asking Sellers to make repairs to properties. They sold high where they lived and are paying cash here. They contribute greatly to the increase in real estate market values.

2) Some of the Buyers want to live in a red state. Some just want to escape a dark blue state. Some want to be around a slower pace. Some want to take advantage of what they believe are really cheap real estate prices. Some come because the real estate may not necessarily be cheaper, but the property taxes are substantially lower, sometimes as much as 60% lower.

3) Properties coming onto the market are based on comparable properties sold. Even with the high interest rates, properties going on the market now, are being priced off 2022 sales and appraisers are approving of contract prices for the Lender.

4) Inventory is still painfully, painfully low and that keeps prices high.

5) Sellers are more engaged, educated and astute when it comes to market analytics and since prices have skyrocketed over the last three years, they are willing to be more patient than they may have been in the past.

6) In some instances, properties are going on the market for twice the assessed value of the neighbor's properties and selling.

7) Land is finite and it is not being made, at least here in Indiana.

Here is some subjective information. I cannot guarantee this will happen but I have a feeling things could go in this direction.

8) In speaking with the Lenders I use most, one for single family residential, the other for unimproved properties and new builds, there is belief that interest rates may come down in 2024 and 2025, maybe even as low as the 3's. That information can be researched so I will not start linking articles. If that is the case, I believe the flood gates will open and the dam will break making Q2 2020-Q3 2022 look like a picnic in terms of the maniacal frenzy that took place when it came to multiple offer situations, bidding, offers, sales prices, high senses of urgency among Buyers and nearly impossible expectations among Sellers. If that does take place, real estate values will skyrocket because the buyers that lost out in all of the hysteria of 2020, 2021 and 2022 will not be left out the go 'round.

9) Something to think about for the long term. The farther governments continue pushing the Green agenda, the more corporations are going to start scooping up tracts of rural land to "offset" their carbon footprint so that they stay off the government's ESG naughty list. That could be the greatest barrier to the middle class owning larger parcels of land. And would be parallel to corporations that are buying single family residential properties by the scores sight unseen with cash to lease for egregious monthly payments, pushing both first time and move up home buyers out of the market as well as pushing independent investors out of the market.

In closing, I will share what I recommend to all Buyers I represent. If a piece of property pops up and it catches your eye, and you know that it's the one, write an offer on the property that is going to give you peace of mind, one that will allow you to sleep at night. If you write a low offer and it is not accepted, you will have gone as far as you were comfortable. But if you write a low offer and it is accepted, then you will have your cake and eat it too. But, if you find a property that you want think you cannot live without, you must be ready to chase it and do whatever is needed to get it when it comes to price.

I know it's hard to believe how expensive land has become, but in 5 or 10 years and beyond, we're going to look back and be shocked at how cheap it was.

Very informative, thanks. What portion of buyers would you say corporations are accounting for?

 

[Ingomike]

Very informative, thanks. What portion of buyers would you say corporations are accounting for?

What portion of buyers would you say foreign corporations are accounting for?

 

[INPatriot]

Very informative, thanks. What portion of buyers would you say corporations are accounting for?

That's a bit of a loaded question.

There are more corporate buyers than I would like and they are squeezing the lower price points, but it would be dishonest for me to peg a certain percentage on exactly how often it happens because I'm only privy to the specifics of my transactions and whatever information other Brokers will share.

Corporate Buyers tend to gobble up single family, owner-occupied, production neighborhoods that many refer to as vinyl villages. Unfortunately, that's where those transactions are where the first time home buyers and independent investors start.

Initially, they would find long term tenants for 12 month contracts, now they are offering Air BnB services because they can make more.

I can only speak for myself, but I've had four or five specific instances take place over the last couple of years where I'm listing a home and the only comparable properties sold to price the property were all single family, owner-occupied homes where the Buyer was a corporation and the terms of the contract were cash.

Some Corporate buyers are now also becoming brokerages in some states - Opendoor, offerpad, redfin, Zillow - which allows them to keep the commissions in-house, adding to the bottom line.

The surge in Corporate Buyers is being combatted by Home Owner Associations only allowing for properties to be owner-occupied. And the Indiana Association of Realtors makes updates to our contracts and paperwork each year. On current purchase agreements, there is a line item on intended use of the property - single family, owner-occupied, investment, etc, which allows sellers to further vet the buyers of the property and their future plans.

 

[ws6duramax]

If you have a general area you like , ride around and get some addresses and look around on that counties GIS maps. You can look up owners and addresses and start the process that way. I have a neighboring land owner that has done this. Over the last 3-4 years he's bought roughly 300 acres from different owners and multiple tracts. All of which connects in one way or another.

You need to be ready to buy and have all your ducks in a row. Once things getting moving , you need to be able close without any snags. If word gets out that property is for sale , someone else will snatch it up if you run into issues. Use contracts , no handshake deals. Make fair offers with minimal contingencies if any.

 

[Ingomike]

If you have a general area you like , ride around and get some addresses and look around on that counties GIS maps. You can look up owners and addresses and start the process that way. I have a neighoring land owners that has done this. Over the last 3-4 years he's bought roughly 300 from different owners and multiple tracts. All of which connects in one way or another.

You need to ready to buy and have all your ducks in a row. Once things getting moving , you need to be able close without any snags. If word gets out that property is for sale , someone else will snatch it up if you run into issues. Use contracts , no handshake deals. Make fair offers with minimal contingencies if any.

Wait? I thought INGO hated those that call and want to buy your property?

 

[INPatriot]

You need to ready to buy and have all your ducks in a row. Once things getting moving , you need to be able close without any snags. If word gets out that property is for sale , someone else will snatch it up if you run into issues. Use contracts , no handshake deals. Make fair offers with minimal contingencies if any.

All of the above present a very solid foundation from which to start.

I would add two more things:

1) If a Buyer has the cash to purchase the property out right, be sure to have a letter with proof of funds. If a Buyer does not have cash and will need to finance a portion of an agreed upon price, a letter of pre-approval is vital to a Seller knowing the viability of a Buyer. Sometimes waiting until a property pops up to get a pre-approval letter is too late. It is diligent to have the letter on file.

2) It is always in the best favor of a Buyer to have a real estate professional in their corner. I will admit before everyone that the pace of the market the last few years has enabled some lazy, incompetent, unethical individuals to make money in real estate. I have encountered far too many in transactions. However, a licensed professional can navigate the nuances of the transaction, can provide comparable properties sold, how long they were on the market and possibly some insight into the details of a sale that might not otherwise be known. A solid real estate professional should provide the most information so that Buyers or Sellers can make the most informed decisions. They have or should have relationships with Title Companies, that will be ensuring clean and clear title is delivered at closing. They have contacts with different specialties that can provide services to Buyers. They help clear snags that can happen at any time in the transaction. And a good real estate broker should be able to convey that the commission they earn performing their services comes from the Seller's net proceeds. They should also be able to show value to a Seller wanting to sell on their own why they are worthy of a commission as a Buyer's agent.

 

[cerebus85]

Have you reached out to Whitetail Properties? They have a lot listed and can put you on their email list...I get a heads up as soon as they list something.

I have heard of whitetail properties scamming both sides. they buy and clear-cut to sell back. i'd be leery and diligent

 

[firecadet613]

I have heard of whitetail properties scamming both sides. they buy and clear-cut to sell back. i'd be leery and diligent

I have no association with them but did look at a plot of land they had listed. As with anything, do your due diligence and use a buyers broker!

 

[DoggyDaddy]

Wait? I thought INGO hated those that call and want to buy your property?

Not if it's for sale.

From the post you replied to: "If word gets out that property is for sale"

I've gone off on the spammers before (my property is not for sale). I say something like, "Do you see a For Sale sign in my front yard ************? No? Then **** off and die!"

 

[shibumiseeker]

Wait? I thought INGO hated those that call and want to buy your property?

I don’t speak for INGO, but one cold call or mailer is mildly annoying. One a month from the same company is more annoying. One a month each from several companies is very annoying. Repeated offers to buy my property at 1/10th its value is infuriating, especially when the arbitrary “value” is the one my property taxes are based on ;-)

 

[manifest destiny]

Whatever you spend on land now will look like a bargain in the future.
If you're only buying recreational land (never building/developing) then you might as well look at all types of land... flood plain, land-locked needing to negotiate ingress/egress, etc. If it's just for fun, some otherwise crappy land situation might be more palatable. YOLO and everyday you don't have your recration land is another day lost. Sure, waiting might allow for the deal of a lifetime to popup on your radar. But it ain't guaranteed you'll land that deal and if you've already bought your piece of the rock, who cares?

 

[Ingomike]

If you have a general area you like , ride around and get some addresses and look around on that counties GIS maps. You can look up owners and addresses and start the process that way.

Not if it's for sale.

From the post you replied to: "If word gets out that property is for sale"

I've gone off on the spammers before (my property is not for sale). I say something like, "Do you see a For Sale sign in my front yard ************? No? Then **** off and die!"

Is he not suggesting an unsolicited approach to owners to get them to sell? Just making a joke of INGO’s aversion to offers to buy property.