A land buying frenzy created during the pandemic era permanently disrupted the housing market, according to an inaugural data analysis report on land listings by Realtor.com.
Since the first quarter of 2019, land market contracted by 23.6% and has yet to recover. Over the same period, prices per acre have surged by 76.6%. The greatest price spikes occurred in the Northeast (+101%) and Midwest (+89%).
Raw land has appreciated the most of any development category, up 86.5% since the first quarter of 2019, while build-ready listings recorded a 53.3% upswing.
Land prices declined 0.5% year-over-year in this year’s first quarter, due primarily to 5.9% drop in the West as builder activity slowed and housing inventory stabilized.
In the first quarter of this year, there were 426,986 land listings for sale on Realtor.com with a median price per acre of $62,365.
“The pandemic didn’t only drain home inventory, it drained land inventory, and that loss is permanent,” said Joel Berner, senior economist at Realtor.com. “When a builder develops a parcel, that land never returns to the market. The construction boom of 2020 to 2022 burned through years of supply, and the market is still paying for it. Prices sit 77% above pre-pandemic levels, inventory has gone nowhere, and until the development pipeline catches up, neither of those things will change and future new construction could be more costly.”
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