The American housing market has made a stunning turnaround. Early last year, it was troubled by the fact that COVID-19 kept down house shopping. Later last year, this gave way to a surge of buyers. Many wanted to leave the huge West Coast and East Coast cities where prices were high and quality of life was not. Low mortgage rates helped. And, the income of the middle and upper classes was barely touched by the recession triggered by the pandemic.
The market is so hot now that in many cities, prices are up 20% month over the same month last year. Recent monthly numbers from the Case Shiller Index, a widely regarded real estate research report, show this has been a trend for most of 2021. In some areas, the demand for homes is so robust that there are bidding wars for some properties.
Some investors have turned from houses to land, according to Realtor.com. Ali Wolf, chief economist at Meyers Research, said: “Land prices are going up everywhere. It’s one of the hottest commodities that exists today.” People buy land to build their own homes, build homes for others, or flip the land as prices continue to rise. Another observation is that land prices have risen most in areas away from the largest cities with only a few exceptions.
Realtor.com experts looked at “the average price-per-square foot increases from the first half of 2020 compared with the first half of 2021 in the 100 largest metros in the United States.”
Sarasota, FL topped the list. The average price per square foot of land is up 92% based on the Realtor.com metric. The median price per square foot for land is $2.52. The number is well above second-place Portland, OR where the increase is 72%. The median price per square foot for land is $9.17.
Sarasota is just south of Tampa on the Gulf Coast. What is the primary reason for the increases? As might be expected, it is people leaving large cities. In this case, it is expensive cities on the Atlantic Coast of Florida–Miami, Fort Lauderdale, and Palm Beach.