2014 Overview of Land Markets Survey

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Overview of Land Markets Survey Conducted byNAR Research for the

REALTORS® Land Institute

Lawrence Yun, Senior Vice President & Chief EconomistJed Smith, Managing Director, Quantitative Research

Gay Cororaton, Research EconomistAugust 2014



Survey Conducted July 9 – July 31, 2014

• REALTORS® Land Institute Survey. – Surveyed 1,000 members plus

approximately 9,500 non-members. – 629 responses.

• 542 respondents providedinformation on membership:

o 63 percent from RLI;o 80 percent are NAR members;o 13 percent are CCIM members;o 35 percent have other memberships

(e.g., ABR, ALC, ASFMRA, CIPS, CRB,CRS, CRE, GRI, SIOR, TAR, ULI,Society of American Foresters )

•

Characteristics about the salepertain to the most recent land saletransaction of the respondent.

63%

80%

13%

35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

RLI NAR CCIM Other

P e r c e n t o

f r e s p o n

d e n t s

Professional Membership, As Percent of RespondentsWill not sum to 100 percent, because respondents could identify more than one

membership





Highlights of the NAR-RLI Land Business Survey

• Regions 3 (KY, TN, NC SC, GA, AL, MS, FL) and 4 ( KS,MO, AR, LA, OK, TX) accounted for approximately 69percent of respondents.

• Major practice areas: Agricultural (69 percent ofrespondents), and Recreation (59 percent ofrespondents).

• Transaction and price growth, past year: 4 percent.• Individuals/families: 58 percent of buyers.•

Days on market varied-- from 60 days for irrigatedagricultural land to 237 days for commercial land.• Financing: on average, 31 percent of the transaction

is financed.



RLI Regions 3 and 4: Locations of Much of Activity

11%13%

30%

26%

15%

5%

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 5 6RLI Region

Location of Land Most Recently Sold(Percent Distribution of Land)

15%

19%

35% 34%

19%

7%

0%

5%

10%

15%

20%25%

30%

35%

40%

1 2 3 4 5 6RLI Region

Region Where Respondents Are Located(Percent of Respondents)*

*Will not sum to 100% because respondent can identify more than onestate.



Agriculture and Recreation: Leading Practice Areas

69%

33%

41%

59%

43% 45%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Agricultural Timber Ranch Recreation Development Commercial Other

P e r c e n t o

f r e s p o n

d e n t s

Type of Land on Which Practice Focuses(Percent of Respondents)*

*Will not sum up to 100% because respondent can identify more than one type of practice.



Land Sales



Type of Seller in the Most Recent Land Sales*

72%

23%

7%

0%

10%

20%

30%

40%50%

60%

70%

80%

Individual/Family Corporate/Partnership Foreign and Other Sellers

May not sum to 100%. Respondent can check more than one type.



Price Growth, Past 12 Months (July 2013-2014)Median Price Change: 4 Percent;

Mean Price Change: 4 Percent

0%

10%

20%

30%

40%

50%

60%

less than -10%

-10% to 0% 0% to 5% 5% to 10% 10% to 15% over 15%

P e r c e n t

d i s t r i b u t i o n o

f r e s p o n s e s ,

b y t y p e

Price Change, In Percent

Percent Price Change Over Past 12 Months(Percent Distribution, By Type of Land)

AgriculturalTimber

Ranch

Recreation

Development

Commercial

Other



Sales Growth, Past 12 Months (July 2013-2014)Median Percent Sales Growth: 4 PercentMean Percent Sales Growth: 4 Percent

0%

10%

20%

30%

40%

50%

60%

less than -10%

-10% to 0% 0% to 5% 5% to 10% 10% to 15% over 15%

P e r c e n t


f r e s p o n s e s

Sales Change, in Percent

Percent Change in Sales Over Past 12 Months(Percent Distribution, By Type of Land)

Agricultural

Timber

Ranch

Recreation

Development

CommercialOther



Agriculture and Recreation46 Percent of Most Recent Sales Transactions

10%

15%

11%13%

21%

13%

10%8%

0%

5%

10%

15%

20%

25%

P e r c e n t


f r e s p o n s e s

Type of Land Most Recently Sold by Respondent



Types of Land Most Recently Sold by Region*Percent of Sales Transactions

21%

65%

12%20%

27%

13%

3%

28%

30%25%

21%

15%

22%

23% 21%25%

3%

17%

8% 13%13%

10%12% 10% 4%

8% 3% 8% 9% 9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5

Other

Commercial

Development

Recreation

Timber/Ranch

Agri

*Not enough observations to analyze Region 6



Median Acres of Most Recent Land SaleVariation by Region and Land Type

160

117

202

294

81

17 523

81

0

50

100

150

200

250

300

350

Median Acres for Most Recent LandSales, By Type of Land

44

98

82

104

129

6481

0

20

40

60

80

100

120

140

Median Acres for Most Recent LandSales, By Region



Irrigated Land Transactions44 Percent in Region 5; 14 Percent Overall

• Pricing for AgriculturalLand: $5,600 per acre.

• Price varies widely forirrigated land vs. non-

irrigated. – Irrigated--Very expensive in

California and Iowa. – Irrigated--Less Expensive

elsewhere•

Accordingly, prices are notbroken out on followingslides for irrigated vs. non-irrigated land.



Median Price of Most Recent Land TransactionVariation by Region and Land Type



Mineral RightsConveyed in 60 Percent of Most Recent Land Sale Transactions

Yes60%

No26%

Not applicable14%



Land Sales Transactions With Mineral RightsVariation by Region and Land Type

53%

75% 77%

67%

57% 60%

37%

49%

60%

0%

10%

20%

30%

40%

50%60%

70%

80%

90%

P e r c e n t s h a r e t o

l a n d s a l e s ,

b y t y p e

Land Sales Where Mineral Rights Conveyed,As Percent of Sales by Type of Land

53%

76%68%

53% 51%57% 60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1 2 3 4 5 6 All P e r c e n t s h a r e t o r e g i o n

' s s a l e s

Land Sales Where Mineral RightsConveyed, As Percent of Sales of the

Region



Type of Land Most Recently SoldIndividual/Family

Other9%

Agr,irrig10%

Agr,non-irrig18%

Timber11%

Ranch15%

Recreation22%

Development8%

Commercial7%



Type of Land Most Recently SoldCorporations/Partnerships

Other5%

Agr,irrig6%

Agr,non-irrig5%

Timber17%

Ranch12%

Recreation17%

Development24%

Commercial14%



Individual and Corporate Sellers:Majority from Regions 3 and 4

11%

15%

26%29%

16%

4%

10%

5%

40%

22%

15%

8%

0%

5%10%

15%

20%

25%

30%35%

40%

45%

1 2 3 4 5 6

Distribution of Individual/Family and Corporation/Partnership SellersAcross Regions*

Indiv/Family Corporation/Partnership

* Not enough samples for Foreign and Other Sellers



Purchases



Individuals/Families: The Major Buyers

58%

17%

10%

17%13%

0%

10%

20%

30%

40%

50%

60%

70%

P e r c e n t o

f r e s p o n

d e n t s

Type of Buyer in Most Recent Land Sale Transaction*

*Will not sum to 100% because respondent can choose more than one type.



Major Types of Land TransactionsIndividual/Family Buyers: Recreation and Agriculture

Other12% Agr,irrig

8%

Agr,non-irrig16%

Timber9%

Ranch17%

Recreation31%

Development

5%

Commercial2%



Major Types of Land TransactionsCorporations/Partnerships: Commercial and Development

Other3%

Agr,irrig4%Agr,non-irrig

10%

Timber17%

Ranch6%

Recreation4%

Developmen

t30%

Commercial26%

Type of Land Bought by Corporate Buyers



Major Types of Land TransactionsExpansion Farmers: Agriculture

Other2%

Agr,irrig

30%

Agr,non-

irrig55%

Ranch13%

Type of Land Bought by Expansion Farmers



Major Types of Land TransactionsInvestors: Diversified

Other6% Agr,irrig

8%

Agr,non-irrig13%

Timber20%Ranch

9%

Recreation

13%

Development

17%

Commercial14%

Type of Land Bought by Investors



Regional PurchasesIndividual/Family Buyers

Corporations/Partnerships

10%

13%

28% 27%

16%

6%

0%

5%

10%

15%

20%

25%

30%

1 2 3 4 5 6

P e r c e n t a g e s h a r e t o t o t a l

Distribution Across Regions WhereIndividual/Family Buyers Bought

Land

11%

14%

31%

26%

11%

6%

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 5 6


Distribution Across Regions WhereCorporations / Partnership Buyers

Bought Land



Regional PurchasesExpansion Farmers

Investors

13%

35%

5%

28%

15%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1 2 3 4 5 6


Distribution Across Regions WhereExpansion Farmers Bought Land

10%

14%

37%

26%

10%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1 2 3 4 5 6


Distribution Across Regions WhereInvestors Bought Land



Market Details



Median Days on Market,By Region and Type of Land

180

6073

120153 150

123

237

120

0

50

100

150

200

250

D a y s o n M a r k e t

Median Days on Market of Most RecentLand Sales, By Type of Land

194

60

150

120

200

111 120

0

50

100

150

200

250

1 2 3 4 5 6 All

D a y s o n M a r k e t

Median Days on Market of Most RecentLand Sales, By Region



Transaction Financing

On Average, 31 Percent of the Land Value is Financed

23%

31% 31%

38%

24%

31%

0%5%

10%

15%

20%

25%

30%

35%

40%

1 2 3 4 5 P e r c e n t o

f t h e

l a n d t r a n s a c t i o n v a l u e t h a t w a s

f i n a n c e

d

Average Percent of the the Value of the Transaction Thas WasFinanced, By Region*

*Not enough observations for Region 6.



Transaction Financing by Type of Land

31% 30%

33%

21%

38%

32% 31%

28%31%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

P e r c e n t o

f t h e

l a n d t r a n s a c t i o n v a l u e t h a t w a s

f i n a n c e d



Major Conclusions

• Most Prevalent Type of Land by Buyer – Individual buyers -> agriculture, recreation – Corp/partnerships-> development , commercial – Expansion farmers-> agriculture – Investors-> diversified across types of land – 1031 Exchange –> agriculture, ranch – Foreign buyers –> ranch, recreation – Others -> development

• Most Prevalent Type of Land By Region: – Region 1: development, recreation – Region 2: agriculture – Region 3: timber/ranch, recreation, – Region 4: Timber/ranch, agriculture, recreation – Region 5: agriculture, timber/ranch



Major ConclusionsPrice, Financing, and Market Growth

• Median Price: $5,125 per acre with Great Variability – Agri, irrigated: $6,000 ; Agri, non-irrigated: $5,500 – Timber:$2,075 ; Ranch: $4,150 – Recreation: $3,000; Development: $40,000 – Commercial $96,875 ; Other: $9,125

• Median Number of Acres in Transaction: 81 with GreatVariability

– Agri, irrigated: 160; Agri, non-irrigated: 117 – Timber: 202; Ranch: 294 – Recreation: 81; Development: 17 – Commercial: 5 ; Other: 23




• Median days On Market: 120 days with GreatVariability.

– Agri,irrig: 60 ; Agri,non-irrig: 73 –

Timber: 120; Ranch: 153 – Recreation: 150; Development: 123 – Commercial: 237 ; Other: 180

• Irrigated land: 14 percent of most recent sales.• Mineral rights: Conveyed in 60 percent of sales.




• On average, 31 percent of Transaction Value isfinanced.

• Market Growth Over Past Year. – Median prices have changed typically at 0 to 5

percent. – Sales have changed typically also at 0 to 5

percent.

Documents

2014 Overview of Land Markets Survey