The answer to the question in this title is pretty straightforward – not only are large acreage recreational property values lower than they have been in almost ten years, an abundance of quality tracts are also currently on the market. The first thought that this response most likely evokes from a prospective buyer is, given the current uncertainty with the economy, the smart play is to wait, let prices continue to drop, then pull the trigger on that dream property. This scenario sounds simple enough – why would anyone want to buy right now?
Although the odds of finding that perfect property at a very reasonable price are high right now, this window of opportunity will not last forever. Land prices will eventually bottom out and start the recovery process. Even more important than the recovery of land prices to a potential buyer is the inevitable reduction of quality tracts on the market. Once land prices stabilize, the first tracts to go are sure to be the best ones. By waiting for land prices to continue falling, a buyer is risking an opportunity to purchase a quality tract at a great price that probably has not been on the market for a long time and most likely will not be on the market again anytime soon.
The purchase of a large acreage recreational tract is typically a substantial long-term investment which requires much deliberation. The main objective for a majority of buyers is getting a great deal on a tract that meets all of their requirements. Many buyers are currently hesitant to move forward in the purchasing process and this hesitancy is justified by the uncertainty of land prices recovering. For those considering the purchase of a recreational property take a look at the following statistics from the United States Department of Agriculture during the Great Depression:
“Agricultural land values saw the largest percentage declines of the century in the early 1930’s, the beginning of the Great Depression. Agricultural land values dropped 37 percent over a period of 3 years and remained between $30 and $33 per acre throughout the 1930’s. Following the Great Depression, land values were revitalized and began a climb that continued until the early 1980’s.”
Over the last three years the majority of large tracts of recreational property in upstate South Carolina have been losing value. Overall, these properties are currently pushing a 30 percent loss in value since land prices started declining. An increasing number of recreational properties currently on the market have experienced major price reductions that reflect this 30 percent loss in value. A legitimate argument is the current recession has lasted longer than anyone anticipated and we are close to a recovery but it will be a slow one. If this argument proves true a valid assessment of current land values is that although they have bottomed out, the time frame for recovering value will be significant. As the slow recovery reveals itself the transactions on quality recreational tracts will increase in frequency as buyers gain more certainty that land values are increasing. Therefore, the best time to get serious about purchasing a large acreage recreational tract is now. The substantial inventory of nice recreational properties with values 30 percent below pre-recession values will not last long and continuing to wait could very well result in missing out on the chance to purchase that ideal tract at a great price.
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