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Land Value Across Ohio Holding Steady in Shaky Economy

March 29, 2009
By Wayne Cooper
Landowners and prospective buyers often look to history, trends and data on which to base their buying or selling decisions. Despite a slumping economy, current information indicates that the value of Ohio land remains optimistically strong. The appreciation of land is driven by a combination of factors, of which buyers and sellers should be aware. Frequent questions include: Is the price of my land increasing or decreasing by what I'm doing? If I'm purchasing land, am I getting a good price and will it appreciate? What influences the variances? Why does location affect the price and why would land be more expensive in a county an hour away? Breaking down the key components that influence land values helps provide a better understanding of land ownership in Ohio.



Ohio Values

Recreational land values in Ohio fluctuate across the state, depending on a variety of factors. While the weight of these factors vary, they consistently include accessibility, wooded areas, game habitat and location. A wooded tract in Ohio can range from $1,000 - $6,000 an acre with accessibility being an important buying/selling feature. Land that runs contiguous to Interstate-70 and its corridor is also considered preferred property. Another price driver is the track record and history of the land for holding and producing whitetail deer, as Ohio offers some of the nation’s best whitetail trophy hunts.

Some recreational property may have a percentage attributed to agriculture use, driving the price of the land. Monroe County has solid recreational land ranging in price from $1,000-$1,200 an acre. Head north to Muskingum County along the I-71 corridor and prices jump to $2,400 per acre. The terrain of gentler, more forgiving land is located along I-70 in counties such as Cochocton, Tuscarawas, Licking and Muskingum and includes the most appreciating land values in the state.



Tourism is Key

Land values are also driven by the positive impact of tourism. Holmes County is the state's leading county for tourism dollars and it also features prime agricultural land holding high at $6,000 per acre. In 2008, a patch of agricultural land developed into commercial real estate in Holmes County sold for $13,000 per acre. Hocking County is the fastest appreciating county in Ohio. Why? Tourism. When the state constructed the bypass around Lancaster, Ohio’s scenic Hocking Hill became 20 minutes closer to Columbus, creating an enormous increase on land values.



Don't Believe the Hype

It’s hard to imagine why the depreciation in the real estate market, homes values and the sub-prime mortgage crisis hasn’t affected land values, but it hasn’t. As recent as 2006, Ohio experienced an 8 1/2% rise in recreational land values and has not seen a decrease in land values to date. In 2008, the market even experienced a slight increase. Agriculture land in the spring/summer of 2008 peaked at its highest value in Ohio history. According to data, recreational land has not been affected by subprime mortgages because the recreational and agricultural land lenders never got involved in sub-prime lending. Also, the extreme buying frenzy in the home market never occurred in the recreational land market and most owners of large Ohio parcels were not in the position of being forced to sell.



Ups and Downs

The demand for recreation land in Ohio continues to increase, due to out-of-state buyers courting Ohio’s whitetail deer population and buyers continually see agricultural land as a good investment. Though the flat economic situation has decreased inquiries and actual transactions from last year by 50 %, the buyers are not gone - just in neutral pending the right circumstances. When the economy starts to turn, interested buyers who were thinking about land a few months ago will be thinking about it again. Whether its $100,000 or $1 million, buyers and sellers are holding firm.



Added Value

Today's market for agricultural and recreational land is strong in Ohio. Determining the appropriate selling price takes a professional working on your behalf and one who knows the marketplace and there are a wide variety of actions owners can take to appreciate their land. For example, if 100 acres has been clear cut of timber, the area will be worth less than tracts with mature timber. Buyers like to see mature trees and decent sized forests on the land. From a biological standpoint, whitetail prosper in areas with small forests because their food sources increase with low-lying vegetation. The rule of thumb for any tract of land is still diversity.



Depreciating Factors

There are, however, some factors that can negatively impact the value an area. Mineral rights are a significant depreciating factor. In this scenario, either a former or current land owner has sold off oil or coal rights. When this occurs, buyers feel a loss of control and are fearful of losing their rights and/or being subject to strip mining. Another factor is development. Buyers typically don't want their recreational land bordering business and residential developments, though a reasonable drive time and some modern conveniences are considered a plus.



Future

We are between a depression and a recession in this country and wherever the economy swings, land values will follow. If the economy continues a downward spiral, land will lose its value and Ohioans will experience the resulting loss. If recreational land can withstand current economic punishment, it will appreciate in long-term value and remain a good investment in anyone’s investment portfolio.

Wayne Cooper is Vice President of Ohio Outdoor Properties for Cabela's Trophy Properties, where he specializes in outdoor and recreational properties. He is an Ohio native and experienced whitetail deer, turkey, pheasant and ruffed grouse hunter.

Fact Box

Recreational land has not been affected by subprime mortgages because the recreational and agricultural land lenders never got involved in sub-prime lending.

 
 

 

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