Back in September 2020 – six months into the COVID-19 pandemic – I looked at how fallout from the coronavirus appeared to be affecting Northern Virginia land markets.
At that time, Loudoun County had experienced a 24% net increase in the number of closed land sales (compared to the same six month period in 2019) and a 13% increase in total land sales transactional volume. In contrast, Fairfax, Fauquier, and Prince William counties looked decidedly sluggish—all three counties had experienced a substantial decrease in the number of closed sales and total land sales transactional volume.
Recently I took a fresh look at the numbers. March 2021 marked 12 months since the beginning of the COVID-19 lockdown, so we now have a full year of post-COVID sales data to work with.
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Number of Sales & Total Land Sales Transactional Volume
Fairfax, Fauquier, and Prince William counties have reversed course entirely. For example, when I ran the analysis in September, the number of land sales in Fauquier County was down 12% from the preceding six month period and total land sales transactional volume was down 46%.
Remarkably, adding another six months of data to the analysis and comparing the most recent 12 month period (3/16/2020 – 3/15/2021) to the preceding 12 month period (3/16/2019 – 3/15/2020) reveals that the number of closed land sales increased from 123 to 158 (22.2%) and transactional volume increased from $43,621,505 to $52,245,602 (16.5%).
Loudoun County experienced the highest uptick in closed land sales since the beginning of the pandemic (from 103 closed sales in the 12 months preceding COVID-19 to 161 closed sales post-COVID). Fauquier County experienced the highest increase in total transactional volume.
Fairfax County experienced the smallest increases in the number of closed land sales and total land sales transactional volume, consistent with the idea that land markets in rural and suburban areas (e.g., Fauquier, Loudoun, and Prince William counties) appear to be experiencing a bigger surge compared to urban areas (e.g., Fairfax County).
Average & Median Land Sale Prices
Another interesting finding to emerge from the past 12 months of sales activity is a decrease in average sale prices of land, both in absolute terms and on a price-per-acre basis. Across the Northern Virginia region as a whole, average land sale prices decreased 9.8%. On a price-per-acre basis, the average decreased 1.2%.
The decrease in average land sale prices (38.1% in absolute terms) in Loudoun County is particularly noticeable. This could be driven by a change in the distribution of sale prices.
During the past 12 months, for instance, only four land sales in Loudoun County involved sales exceeding $2 million, and the highest sale price was $5 million. During the preceding 12 months (pre-COVID), eight land sales exceeded $2 million, and the highest sale price was $8.5 million. Therefore, lower levels of high price point sales activity during the past 12 months has translated to lower average sale prices. This theory is supported by the fact that median sale prices have risen.
Fairfax County is the only jurisdiction where average and median absolute and per-acre land sale prices have increased across the board. To speculate, this could be the result of an ultra-competitive housing market and low inventory pushing more buyers to buy land and build instead of buying an existing home.
Days on Market
In three of the four counties included in the analysis, land listings are spending substantially less time on the market today compared to the 12 months preceding COVID-19.
Fauquier County has experienced the most dramatic decrease in average days on market, down 42.4% compared to the pre-COVID market. In Loudoun and Prince William counties, average time on market has decreased 31.2% and 32.8%, respectively. In Fairfax County, average days on market has remained relatively stable.
Across the board, land listings in Northern Virginia today spend an average of 162 days on market before going under contract. This represents a decrease of 25.6% compared to the 12-month period covering 3/16/2019 to 3/15/2020.
Today, there is surprisingly little variation in days on market from county-to-county. In pre-COVID times, there was a clear divide between Fairfax County, where average days on market was 152, and Fauquier, Loudoun, and Prince William counties, where average days on market ranged from 202 to 239. That gap no longer exists, suggesting once again that rural and suburban areas have benefited most from post-pandemic market shifts.
Sale Price to List Price Ratios
The final indicator I examined was sale price to list price ratios. Generally speaking, sale price to list price ratios for land are lower than for houses. For example, in today’s housing market, homes often sell for 100-105% of list price. For land, the average is about 90%.
Similar to the housing market, however, sale price to list price ratios for land sales have been trending up. In the 12 months leading up to COVID-19, land in Northern Virginia was trading for about 87.4% of list price. In the 12 months after COVID-19, that number increased to 90.3%.
Loudoun County has surpassed Fairfax County as the jurisdiction where sellers are experiencing the highest sale price to list price ratios. On average, sellers in Loudoun County fetch 93.5% of their asking price for land sales. In Fauquier County, sale price to list price ratios still lag behind the other three counties, but on a bright note, Fauquier County experienced the highest rate of change during the past 12 months.
Trends in sale price to list price ratios are another clear indicator that rural and suburban markets are holding up well in a post-COVID world.
Are you considering buying or selling land in Northern Virginia? Call or text 202-750-4050, or drop me a line at kennedy@kennedysellsva.com to learn about more about market conditions in your area.
