Noticed that land prices are rising? You’re not alone.
Mark Mommsen and Josh Waddell, of Sycamore, Ill.-based Martin, Goodrich & Waddell, Inc. Real Estate Services, say the same thing in their new report, “Transitional Land: The Liquidation Phase is Over.”
As Mommsen and Waddell say in their report, developers and investors are moving back into the transitional land market. Properties thought of as “transitional” are those that can be developed by an end user sometime during the next five to 15 years.
Mommsen points to land that once commanded prices of $30,000 to $100,000 an acre falling to $8,000 to $12,000 an acre during 2010 and 2011. These prices are climbing now, with Mommsen’s and Waddell’s report citing prices-per-acre in the $13,000 to $17,000 range for properties close to population centers and existing developments.
And as these prices rise, the market for transitional land has shown new strength in the past 12 months, according to the report.
“We are now being contacted regularly by buyers seeking to purchase transitional land on the edge of town, and they are willing to pay a premium,” writes Mommsen. “This is in contract to previous years in which buyers were seeking farmland and were pleased with the potential for future upside.”
