According to April LANDTHINK Pulse results, 42% of respondents believe that demand for land will DECREASE for the remainder of 2020. For weeks now, the coronavirus pandemic has monopolized the world’s attention and a 24-hour news cycle. The COVID-19 crisis has put many parts of life on hold across the country. It has shut down restaurants, churches, schools and festivals, and political rallies and sports events have been cancelled or postponed. Many companies around the world have asked their employees to work remotely. Strange times, indeed.
Last month, the April Pulse asked: What effect do you think COVID-19 will have on the demand for land for the remainder of 2020?
April Pulse Sponsored by
The last recession of 2008 is still fresh on our minds, and the current economic slowdown triggered by the pandemic has left many asking if the real estate land market could be in trouble. The effects on the land industry will vary by sector and market, and the extent of the effects will depend upon the duration of the slowdown.
The coronavirus pandemic has led to ballooning unemployment in the United States and consumer spending is down across all industries as stay-at-home orders have restricted what consumers can spend money on. The vast majority of workers are expected to go back to their jobs as states continue to reopen, and President Trump has repeatedly predicted economic growth will take off like a “rocket ship” once the pandemic ends.
Both the housing market and the land market are largely affected by unemployment rates, interest rates, consumer confidence, and income. If the income, investment portfolios, and confidence of consumers gets hammered over the remainder of 2020, prospective land buyers might hunker down and wait. Still, experts predict it’s highly unlikely that we’ll see a rerun of the market collapse of 2008. Surplus inventory, unusually loose lending conditions, and overproduction of new construction were primary factors in the 2008 recession. We’re not seeing those factors in the current real estate market.
Coming in second, 29.5% of the LANDTHINK audience indicated that they expect demand for land will INCREASE as we head into the latter half of 2020.
The COVID-19 pandemic has already swept through cities and urban centers. Because of high population density, cities like New York, New Jersey, Seattle, California, and Washington D.C., have been a hotbed of Coronavirus infection and it has prompted many people to rethink where they want to live.
There has been a pandemic-fueled mass exodus out of cities by urban dwellers that are seeking refuge in small towns and rural areas across America. Many fled to be closer to relatives and have more space while they’re quarantined. After all, social distancing is much easier in a rural setting, and hunting and fishing were “social distancing” activities before it was a thing. People have also demonstrated that their jobs can be done just as effectively from home. As a result, land agents are seeing a growing interest in remote homes on acreage in places where people can live comfortably and self-sufficiently.
Since the shutdown began around March 15, “farmland” and “off-grid” have been the most searched keywords on the LANDFLIP NETWORK. As an example of how much buyer interest in rural land for sale has spiked, LANDFLIP’s overall network traffic is up 40%, and lead inquiries are up 120%. New buyer profiles are up 85% compared to previous months, and the most viewed properties are 100 acres or less.
Another thing to consider is that rising tensions are causing investors to look for safer places to park their wealth. More investors are adding “hard” (physical) assets such as timberland to their portfolio.
The world seems to have taken a break because of COVID-19, but there are plenty of interested land buyers out there, searching for their dream property. The top land agents are using this time to strengthen their marketing strategies; many LANDFLIP sellers have doubled their use of LANDFLIP during the lockdown.
Long before COVID-19, the LANDFLIP NETWORK has been knocking down the wall between buyers and sellers, using innovative ideas and technology. The online land for sale platform has grown 50% year-over-year for the last two years. Ryan Folk, Founder of LANDFLIP, expects the growth rate to continue through 2020 and beyond, and says they are continuing to invest heavily in their cloud infrastructure to support near-to-long term growth.
The LANDTHINK audience voiced a strong opinion on what 2020 has in store for the land market. The results showed some mixed views, but the majority of our audience (42%) believe that demand for land will decrease, followed by 29.5% who said demand for land would increase throughout 2020. Some (17.6%) said “Who knows what the future holds?” and only 11% thought there would be no change in demand.
We were pleased that so many people chimed in on this question, and we thank everyone who answered the Pulse and shared it on social media with friends and connections in the land industry. LANDTHINK would like to extend a big thank thank you to The Land Show with Dave and Johnny for sponsoring the April Pulse and for coming up with a very interesting question to pose to our audience. The show can be heard throughout the state of Alabama on Saturday mornings. Visit their website for a list of the locations and stations and to listen to podcasts. Dave Milton and Jonathan Goode, land agents with Southeastern Land Group, host the show and want to introduce land investing to capable investors and help land owners reach true market potential when listing their properties.
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