New York Land, News, Tips

Six factors affecting New York land

Vacant forest land in Georgetown New York

So you own land in the great state of New York – the Empire State. Judging by the fact that you’re here reading this, you’re probably wondering what the current state of the New York real estate market is. Will it go up or down? And more importantly, for how much will it affect the price of my land in New York?

I’ll be the first to tell you we can’t predict the future, but we do buy (and sell) a lot of vacant land in New York, and we have a pretty good pulse on what’s going on there right now, and what some of the factors are at play right now in the market. 

So, without further ado — we hope you’ll get some value out of this. 

Six factors affecting the price of land in New York. 

  1. Population decline
  2. Location
  3. Interest rates
  4. Inflation
  5. The stock market
  6. Recession

Population decline

New York state had 1.58% fewer residents in 2021 than the year before (about 320K less people). This puts pressure on the overall real estate market for obvious reasons. People leaving often need to sell land or houses when they move. 

That being said, rural land in New York has seen increased demand from in-state “urban flight”, which accelerated that much more due to COVID. Why? As with anything, it’s complex, and there are multiple reasons. For one, cities like New York City, heck, even Syracuse, imposed severe restrictions that drove a lot of people nuts. People wanted a place where they weren’t being told what to do, where they can go, what they can say. What better way to avoid these restrictions than unrestricted rural land? And make it off-grid and you’ve got a winner. Another reason for urban flight is crime. New York City, for example, saw a 27.8% increase in crime in May compared to the previous year. Murder was up almost 10%, robberies up 26.2% and assault was up 12.9%. It’s getting a little scary out there. Lastly – politics. Big cities have seen all kinds of controversies at schools, city councils, etc — they want to get away from that. The dream of a rural piece of property is so appealing. But it has to be at least somewhat close to civilization.  

Location

New York is the 27th largest state in the United States. It has 54.5 million square miles, and of that, 47 million square miles are land. A lot of the land in the state is rural, and it has some of the best scenery in North America. Land in these rural areas can be surprisingly cheap compared to many places in the United States. And one of the the biggest factors in value is location – how close is your property to a metropolitan area? Do you know how much an acre is worth in Alaska? Probably not. You know why? Because it’s freaking hard to get there.   New York has a few reasonably sized cities smattered throughout the state: 

City Population Rank in the US
New York City, NY 8.4MM #1
Buffalo, NY 276K #78
Rochester, NY 210K #111
Albany, NY 99K N/A

You really want for your land to be within a couple hours of a decent sized city, as this is where most of your buyers are going to come from — either that, or your buyers need to fly into a town with a big enough airport to support some cheap flights.

New York has a large amount of public lands – 250,000 acres to be exact. If you’re a hunter, this is gold. They have amazing state forests all over the state. If you’ve got land near state land, this can be a huge value add — and if you border state land — even better. Why? Well, you have access to all that acreage for hunting, but better yet – no one is going to build next to you.

Interest rates

One of the biggest concerns recently has been about rising interest rates due to inflation. Why does this matter? It means that it’s a heck of a lot more expensive to get a loan to buy real estate. And almost all people need financing in order to buy a home. What used to be an affordable house (or that 10 acre property in New York) has, within a couple months, become too expensive to finance.

This means that many residential markets are getting hit especially hard. And while the types of people looking for a hunting property often have more cash to buy land, residential prices will ultimately bleed over into the larger rural tracts.

Smaller dollar/acreage land may be more resilient when it comes to interest rates impacts since people will be more easily able to buy land with cash, but larger acreage / higher dollar land is very likely going to see some nearer term impacts and slowdowns.

Inflation

As you likely know, inflation is the word for rising prices of goods and services, like energy, food and merchandise. Since last year, oil has increased 55%, natural gas by 59%, and pretty much everything we eat has as well.

This makes it harder for people to afford what they need, especially if the economy (and their wages) isn’t growing as quickly — we are all effectively losing money. 

Inflation can have a positive effect on land values (assuming the above interest rate problem doesn’t affect the affordability too much). Why? People are afraid to hold onto cash since it’s becoming worth less, and they want hard assets like gold, and yes, land. I’m seeing several pundits say that inflation fears are overblown – but I’ve also learned that absolutely no one can predict what the future holds – at least not consistently. 

The stock market

I heard an interview in February from a guy who previously worked at the Fed (the ones who effectively controls interest rates for the dollar). They were talking about how inflation was out of control at that point – and what policy changes we’d see to control it. This guy’s prediction was that the Fed would raise interest rates enough to cool off the stock market and make everyone much more cautious about spending — which leads to less demand. Less demand often equals lower prices – or at least helps keep them in check. 

Though I said no one can predict what the future holds, it seems like this guy predicted exactly what is happening. Many people rely on 401k’s for retirement – and as the market has dropped significantly since the beginning of the year (Nasdaq has dropped 27%), people are a lot more hesitant to shell out their hard earned cash for land. 

Recession

Layoffs have been accelerating as well, with many companies trimming staff that was hired even just last year. Lots of reasons. Inflation is high, so interest rates have to move high, which means that it costs more to borrow money, which means that companies can’t invest as much, which means that… you get the picture. And this affects land prices. Someone who is afraid of getting laid off is going to be less willing to shell out cash to buy land if they need it to pay the bills. Priorities, man. 

Now, while layoffs are increasing, they’re still low relative to historical numbers, as this article describes

Summary

What does all of this mean to you as a landowner looking to sell your land? It means the future is uncertain. I can confidently say at some point in the future, land prices will be higher in New York. But I can also say with a pretty high confidence that prices will be lower at some point. The only thing that is certain is that the price will change. 

And if you do decide that the time is right for you to sell your land in New York and you’d like to get an offer, please reach out to us here. 

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About Haystack Land Company

We buy land in Upstate New York, Texas, Georgia and around the United States. We started Haystack Land Company with the core value of “integrity above all else” in mind, and it reaches into everything that we do. Our goal is to do right by our customers, business partners and providers — and to treat them with the care and respect that every individual deserves.

If you own land and you’re interested in selling, please get in touch with us. 

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