Buyer demand for recreational land for sale has actually intensified through the pandemic, because buyers have realized the many benefits of owning their own recreational tract. As we head into summer, it looks like the market will be very healthy for the rest of the year.
That’s what we’re hearing from our PotlatchDeltic Preferred Broker Network, which includes recreational real estate specialists that sell property in the South, upper Midwest and West. The pandemic has only strengthened interest in recreational property, and some of our brokers say that their 2021 property sales could end up significantly higher than 2020’s totals.
Beyond this general optimism, here are six significant trends our brokers are seeing right now:
1. What we like to call “recreational distancing” continues to drive buyer demand.
As one example, our Idaho brokers continue to see a high level of demand from urbanites in Washington, Oregon and California. In fact, buyer interest in this scenic area of Idaho was substantially higher in the first quarter of 2021 than it was a year earlier.
Whether it’s a second home or a permanent move, the pandemic has led many city dwellers to want to spend more time in the country.
2. Many buyers have multiple reasons to want recreational property.
Certainly, the desire for recreation – whether it’s hunting, fishing, hiking or just relaxing – is a major driver for buyers. But many buyers are also looking to get timber income or to diversify their investment portfolio.
As our brokers at United Country-Neeley Forestry Service Inc. in Arkansas tell us, record lumber prices and optimism about U.S. construction in coming months and years is, in turn, driving even more interest in the purchase of property for timber.
3. Low interest rates are a positive factor for people financing their land purchases.
Our brokers are seeing lending institutions show more interest in financing land purchases, in some cases for as little as 15 to 20% down. As an example of this trend, 90% of the 2020 deals done by the brokers at LandRadar.com by Close Converse in northern Minnesota involved lender financing.
At the same time, cash buyers also continue to be a strong force in recreational property sales, whether they are cashing money from stock investments, divesting other types of real estate or investing in land with 1031 funds.
4. In some areas, the strong interest is leading to a shortage of quality recreational property for sale.
In some parts of the country, a strong 2020 depleted inventory of desirable recreational properties. As Sean Wilson of Latah Realty in Idaho reports, as publicly accessible recreation areas got crowded during the pandemic, this only intensified the desire of people to have their own private recreational property.
As property owners like timber companies replenish their inventories and brokers gain new listings, it’s important for buyers to work with an experienced recreational property broker who will hear about new properties going on the market.
5. More buyers are using technology to check out properties themselves as they start working with a broker.
Buyers are using apps like On X, along with GIS applications created by local counties, to visit properties on their own terms and on their own time. Our brokers are certainly fine with this approach, but they also encourage buyers to get a broker involved early, which can help save time as they narrow their search.
In turn, it’s important to work with a broker that will take the time to understand what a buyer truly wants, and then use local knowledge and sales experience to match those desires with the right property.
6. First-time buyers continue to be a significant force in the market.
Some of our brokers are reporting that as much as 30% of their 2020 recreational land sales activity came from first-time buyers, and that trend is continuing.
Although there is no reason to fear the land purchase process, we do encourage first-time buyers to consult with an expert early in the process, so they can gain an understanding of everything from access, to water sources, to wildlife, to topography, to types of timber on a property.
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.
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