Provided by Mossy Oak Properties
The Southeast region of the U.S. land market is one of the most diverse in the country, with attributes including a healthy and varied agricultural economy, the nation's largest timber industry, and claim to some of the world's finest hunting and fishing opportunities. The Mossy Oak Properties franchise network has a well-established footprint in the region, and has benefited from the spike in activity over the past two years. In this feature, we will hear from three Mossy Oak Properties land specialists on the past, present, and future status of the land market in the Southeast.
Current trends and dynamics
According to Chad Carger, broker and owner of Mossy Oak Properties Cache River Land & Farm in Northeast Arkansas, trends in the region are varied thanks to the diverse types of land, which attract and accommodate many different buyers and industries.
"Within the past couple of years there has been a very strong market for investors buying farm ground," Carger said. "That trend has settled some but still exists. As commodity prices fall and settle out to a new normal, investors are still buying but are much more cautious with the prices they are paying."
Meanwhile, timberland investors are coming on stronger, seeking out tracts that are ready to harvest. In fact, some are even looking to the future by purchasing marginal pasture ground that can be converted to new forests.
"As the housing market continues to steady and in some areas right itself, new construction will grow and provide a need for mills to get back to work, increasing the demand for timber," Carger said.
Meanwhile, William McOwen of Mossy Oak Properties NC Land and Farms stated that activity in eastern North Carolina remains strong thanks to buyers with discretionary income continuing to enter the recreational property market. Additionally, with a deficit in buildable lots on the horizon in the short term, McOwen stated development acreage for high-growth areas in the core of the state will continue to increase.
"More families and individuals are looking for rural land to create a destination that allows them and their families to 'disconnect' from the main stream," McOwen said. "With all the modern conveniences and mass media input we all are bombarded with everyday, there is a collective that is making the conscious choice to get back to basics and pull the plug."
Additionally, McOwen stated that more clients are starting to turn to land as part of an investment strategy.
"Many do not see the long-term stability in the stock market anymore and would rather invest in something they could enjoy today," he continued.
Meanwhile, down in Southeast Georgia, Mossy Oak Properties Coastal Land and Real Estate Broker Terrell Brazell highlighted the demand for timber tracts from both institutional and individual buyers. There has also been a strong return of larger recreational buyers in the 100-acre-plus category. Also, just like in North Carolina, many buyers are turning to land as an investment.
"An abnormally high stock market has some investors pulling their profits out of the market in preparation for an anticipated market correction while taking advantage of the current land prices," Brazell said.
One notable sale from North Carolina includes a 396-acre recreational property in Tyrrell County.
"The buyer was wanting to find a property close to his home in Chesapeake, Virginia, where he could enjoy some hunting with his son, who is retiring from active duty in the Navy," McOwen said.
"[He] was selling another property in Oregon and needed to perform a 1031 exchange to lower his tax exposure on the sale. This property fit the exchange qualifications and offered some of the best deer and bear hunting in the region. The buyers are thrilled with the purchase, they engaged in a management plan to enhance the land's ability to hold wildlife and are enjoying the connection that only comes from working the land together as a family. In this case both the buyer's financial and recreational needs were met and the sense of responsibility for taking care of the property continues to fuel the bond of father and son."
In Georgia, Brazell highlighted a large recreational purchase focused on land investment.
"I have a buyer that is closing this week on 100 acres of recreational land that pulled the money from his stock portfolio because he is afraid of the market and felt land would be the best place to hedge against losses and inflation," he said. "Plus he loves to hunt and is tired of the typical hunting club leases where he has no control."
Looking to the future
As far as what's on the horizon, Carger forecasts continued demand in Arkansas.
"The next six months should remain fairly stable in the land market as the agriculture investment segment falls some but is offset by increased activity in the timber and poultry industries," he said.
McOwen stated that his brokerage has tripled in size over the past year and will be opening up the first of four proposed offices in Virginia before the end of 2014.
"We are investing in the growth of the market by increasing our footprint, continuing to develop and change our marketing strategy to stay ahead of the competition, and promoting the Mossy Oak Properties brand to gain market share along the way," he said. "Our sales are up 48 percent year to date from last year and our inventory numbers are up 50 percent year to date."
Brazell echoed this sentiment, saying he and his team are working to keep up with consumer demand for new listings.
Between the diverse land types the Southeast has to offer and a growing sentiment that Mother Nature may make a better financial investment than the stock market, it appears as if activity is booming for both buyers and sellers in the region. Whether a person is looking to buy land for recreational or business purposes or sell a tract to capitalize on strong demand, now is the ideal time to sit down with a Mossy Oak Properties land specialist and discuss options over a cup of coffee.