The following MacRo Report entry is written by Dave Wilkinson, Vice President of MacRo, Ltd. regarding the current factors that can influence the market price of land in Frederick, Maryland.
Is the Land Market Heating Up?
Spring is officially here – the vernal equinox occurred on March 20th. But through early April, winter didn’t want to let go. The market for land has been behaving similarly. While there are signs that the market is warming up, it’s difficult to determine yet if the cold headwinds that have suppressed the market for the past few years have abated or not.
The spring 2011 MacRo Report included an overview of the market for land in Frederick County. At that point in time, the market was still trending down and it was hard to see many positives. How do things stand today? In summary, it appears that the market for land has hit bottom and may be ready to rise. The number of land sales reported by Metropolitan Regional Information Systems, Inc. (“MRIS”) experienced a steady downward trend between 2000 and 2008, dropping from 287 sales to 50 over that time. Between 2009 and 2011 the number of sales effectively ‘bounced along the bottom’. In 2012, sales increased to 86, an increase of 72% above the low point experienced in 2008, but still only 30% of the peak in 2000.
Of further interest is the behavior of prices. Since prices are dependent on acreage and whether the lot is “buildable” or not, we’ll only consider lots between 1 and 2 acres in size that are perc approved for one residence. In 2000, the median sale price was $73,000. Prices then increased rapidly reaching a peak of $257,000 in 2006. Then the real estate bubble burst and demand dropped. As the number of sales fell, the median price plummeted; by 2011, the median price was down to $103,250.
Now the good news: in 2012, the number of sales increased AND the median price had risen to $111,500. It appears that prices have finally hit the bottom of their cycle and could be firming up. It will be interesting to see if an “upward” trend takes root in 2013; while it’s very early in the year, both the number of sales and median prices are above 2012 levels. At MacRo, we’re not predicting a substantial escalation in prices anytime soon, but we do feel that the market is improving.
We know that the sultry days of summer will be here soon enough, but it’s much harder to predict when the market for land will experience a sustained recovery. If you’re thinking of buying or selling land or a farm, please give me a call and let me assist you in your evaluation.
Dave is a licensed Realtor and brokers many of MacRo’s real estate building lot listings, using his knowledge of zoning and subdivision regulations, real estate market conditions, and land development options to help MacRo’s clients achieve their goals. Contact Dave at 301-748-5670 or firstname.lastname@example.org