So you want to know how much does land cost per acre in Virginia?
If you’re looking for land for sale in Northern Virginia, it’s an important question to ask. If you ask Google this question, you’ll get answers ranging from about $3,000 to $4,500 per acre. In reality, however, land values vary so much based on so many different factors that it’s almost impossible to come up with a single number that accurately reflects the price of land per acre in Virginia.
The most obvious variable is location.
It doesn’t make a whole lot of sense to ask “how much does land cost per acre in Virginia?” when you realize that land in some parts of Northern Virginia sells for more than $1 million per acre, while land in rural areas can sell for $3,000 per acre.
Even in sub-markets like Northern Virginia, the price of land can vary considerably across relatively short distances. A great example of this is the price of land in Fairfax County compared to the price of land in neighboring counties like Loudoun County and Prince William County.
The difference is staggering. The median price per acre of land that sold in Fairfax County during the past 365 days was $549,500. During the same time, in Loudoun County and Prince William County, the median sale price of land per acre was $45,000 and $39,325, respectively. Venturing just a little farther out to Fauquier County, the median price per acre dropped to $17,085.
There are various extrinsic factors that contribute to differences in land values across relatively small geographic areas.
What accounts for such large variation in land prices across these four counties in Northern Virginia? In Fairfax County, there is a dwindling supply of good land available for development, and much of the land that is sold is sold for residential development.
Therefore, the factors we typically consider important determinants of home values – quality of local schools, employment opportunities, and access to shopping, entertainment, and recreation, etc. – are highly relevant in Fairfax County.
By extension, land values are tied to new home sale prices. As of this writing, there are 227 new construction detached single family homes listed for sale in Fairfax County, with a median list price of $1,780,000. In places like Great Falls and McLean, new homes frequently sell north of $2 million.
In contrast, the median list price of new construction detached single family homes for sale in Loudoun County is $749,990. In Prince William County it is $604,995, and in Fauquier County it is $547,450. It is no surprise that the trend for new home prices follows the trend for land prices across these four counties.
Of course, you might notice that the magnitude of the relationship between new home prices in Fairfax County and the surrounding counties is much smaller than the magnitude of the relationship between land prices.
The median sale price of a new home is Fairfax County is roughly 2.4 times higher than the median sale price of a new home in Loudoun County, while the median price per acre of land sold in Fairfax County is roughly 12 times higher than the median price per acre of land sold in Loudoun County.
The reason for this is two-fold. First, lower density requirements diminish the per acre price of land in certain areas. For example, in many parts of Loudoun County, 3-10 acre lots are the norm for single building lots. In Fairfax County, the average lot is substantially smaller, and often under 1 acre. At a certain point, lot size becomes irrelevant if you can only build one house on it. You wouldn’t pay 10 times as much for a 10 acre parcel than a 1 acre parcel if you are limited to building a single home. Therefore, a half acre lot surrounded by $2 million dollar homes in Fairfax County will command a much higher sale price than a 5 acre lot surrounded by $700,000 homes in Loudoun County.
Second, the outlying counties have substantially more agricultural land and a larger inventory of land in general. Agricultural land values are tied to very different factors than residential land values. Agricultural land is often valued based on an income approach, and the price per acre is not going to be anywhere close to the price per acre of residential land in high growth areas. Despite the growth of areas like Ashburn, Leesburg, and Aldie in Loudoun County, the western half of the county remains mostly rural. Low land prices in rural areas balance out high land prices in urban areas. Fairfax County is almost entirely urban and suburban, and median land values reflect that.
Qualities and Limitations of the Land Itself
Beyond location and general market conditions, what else should you think about when considering how much does land cost per acre in Virginia?
One of the challenging parts of evaluating land for sale in Northern Virginia is that two lots that appear virtually identical (and could even be located in the same neighborhood) could have different values based on qualities and limitations that are not readily visible.
Examples of such qualities and limitations include minimum lot size requirements, soil type, utilities access, easements, subsurface rocks, title defects, floodplains and wetlands, restrictive covenants, setback requirements, and the presence of protected or endangered plants or animals on the property.
So, you might come across two lots in the same neighborhood and find that one contains wetlands, slow draining soils, and is affected by an easement, while the other one has no wetlands, drains beautifully, and is unaffected by any easements. Depending on the severity of wetlands and poor drainage on the first site, it might be totally unbuildable, in which case it may be worth a fraction of the value of the second site.
Clearly, it is critical to do your due diligence before going to the settlement table. Typically, 30-45 days is sufficient time to do your due diligence, but more complicated projects may require more time. For a more comprehensive list of questions to think about as you’re searching for land to build a home in Northern Virginia, you can download my free Land Buyer’s Due Diligence Guide.
So, how much does land cost per acre in Virginia?
If you’ve read all the way to this point, you know the price of land in Virginia is highly variable and dependent on numerous factors. If you’re serious about buying land in Virginia or Northern Virginia, you should first determine your budget and then seek the assistance of a real estate agent who specializes in land sales. In addition to helping you evaluate land values in your particular area, a good agent will know the right questions to ask and the best people to work with to get you through the due diligence period.
If you’ve got any questions about buying or selling land in Northern Virginia, you can contact Jonathan anytime at 202-750-4050.