Statistical analysis suggests Frederick County swinging back toward a “Seller’s Market”
After almost a decade of being ‘down in the dumps’, the market for lots and land in Frederick County has improved greatly over the past two years and maybe swinging back towards a ‘seller’s market’. Evidence from the multiple listing service (“MRIS”) includes:
- The total number of lot and land listings sold in 2018 is on pace to exceed 190 sales. This would be an increase of 16% from 2017 and is an almost four-fold increase from the trough in sales, which occurred in 2008.
- The number of ‘active’ land and lots listings (all sizes and types) in MRIS was down to 272 on September 17th. This reflects a steady ‘burn off’ of land inventory – over the past few years and a 43% drop from a peak of 472 ‘active’ listings in mid-2008.
- A total of 182 land and lot listings have sold in the 12-month period between September 2017 and August 2018. This means the ratio of listings to sales is now down to less than 18 months of inventory. Another sign of a tightening market.
- “Custom home lot” sales (defined as 1 to 2 acre lots on well and septic) for 2018 are on pace to exceed the total number of sales that occurred between 2013 and 2015 – basically a tripling of sales in the past three years.
While the level of activity has increased steadily, prices appear to be ‘firming up’ but are not yet showing signs of rapid growth. As an example, the median sales price of Custom Home Lots has been essentially flat over the past three years. While it’s difficult to prove with empirical data – it’s my gut feeling that land prices are increasing. A predominance of the properties I have sold over the past year have achieved sales price very close to, or above, what was expected when the property was listed. As inventory continues to tighten, prices will increase.
As prices increase, the market will inevitably respond with more properties becoming available for sale. In the past two years, I have experienced an increase in land owners inquiring into the potential of selling their property in multiple parcels and/or subdividing their land. For existing landowners, the economics of subdivision are improving, and I expect to see an increase in newly subdivided lots over the next few years.
“My family was selling a farm which was part of an estate left by my parents. Dave was referred by a friend who was a former client of Dave’s and we found his service just as our friend indicated— first rate! Prior to listing Dave explained options that were available for increasing the value of the property. He was indispensable in dealing with Frederick County agencies involved in the process, in recommending contractors who prepared the property for listing, and in explaining the process. We were always kept up to date and our questions were answered immediately. Dave also managed several contractors that we engaged to prepare the property for sale. Due to Dave’s constant attention to detail and by following his recommendations, the property sold, within thirty days, at a price substantially above the appraised value. Dave did an excellent job for us in every respect. I would highly recommend him to others.”
As your trusted advisor, please feel free to contact me with any questions you may have regarding farms, land, and lots; or the subdivision process.