Talk about the economy is everywhere in the news these days, so if you’re thinking about buying recreational property, you may be wondering if this is a good time to buy. From what we are seeing at PotlatchDeltic, 2023 promises to be another strong year for recreational property sales, which should give buyers comfort that they are making a smart choice.
Here are five trends we are seeing that support our prediction that quality recreational properties will continue to hold value and sell briskly in the coming year:
- Recreational property sales often do well when the stock market is volatile.
Over time, buying recreational property has proven to be a good hedge against inflation while showing more consistent positive returns than the ups and downs of other investments. Also, remember that recreational land is always desirable because a buyer can invest and use the property at the same time.
- Many recreational property buyers pay most or all of the sales price in cash, reducing concerns about higher mortgage rates.
In the states where we sell recreational properties, we see a significant percentage of sales done with cash buyers. Buyers are using a number of ways to generate funds for purchases, such as selling other investments, using a self-directed IRA, tapping into home equity, investing with money from an inheritance, or doing a 1031 exchange from another property.
- Positive impacts on recreational property sales that began during the pandemic are still strong.
With more people able to work remotely, and more focus on getting away from urban centers, demand continues to be high for our properties in states like Idaho, Mississippi, Alabama, and Arkansas. In Idaho, we continue to see robust interest in developed rural properties with roads and utilities in place, while sales of rural recreational land continue to be active across our entire geographic footprint.
- Interest from recreational property buyers remains solid.
The biggest change we’ve seen is that in some cases, buyers are taking a bit longer to make decisions. But in general, there remains a steady demand for rural properties. Judging from positive trends in metrics like our online traffic, we are bullish about 2023 in recreational land sales.
- Buyers are seeing that quality recreational land is holding its value.
We are not seeing “fire sales” on quality recreational properties – much different than the situation after the economic crash of 2008. This is giving recreational property buyers confidence that they can buy now vs. waiting for possible price adjustments.
For buyers, as always, it’s important to do your homework. Work with a land sales expert who knows all the ins and outs of buying recreational property. Decide how you will want to use the property, which in turn will help you determine what features the property needs to have. For example, do you need to be close to town? Is the quality of wildlife important? And do you want to do improvements yourself or buy a property that already has that work completed?
As we look at 2023, it’s important to consider economic news, but also to rely on data and information about our own slice of the economy to make informed decisions. Remember that the solid fundamentals of recreational property sales remain in place, now fueled by buyers’ desire to get away from it all and to build a legacy for their families.
At PotlatchDeltic, we believe that 2023 will be a great time to buy and look forward to working with buyers as they find the perfect property for their needs.
Written by Bill DeReu, Vice President of Real Estate for PotlatchDeltic, which sells recreational properties in six states – Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi.
This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of LANDTHINK. Use of this content without permission is a violation of federal copyright law. The articles, posts, comments, opinions and information provided by LANDTHINK are for informational and research purposes only and DOES NOT substitute or coincide with the advice of an attorney, accountant, real estate broker or any other licensed real estate professional. LANDTHINK strongly advises visitors and readers to seek their own professional guidance and advice related to buying, investing in or selling real estate.