If you are like us at Mossy Oak Properties, the thought of being quarantined during a pandemic like the current COVID-19 crisis is made more bearable if you have a place with a little dirt and grass under your feet to do so. It’s currently turkey season around the Mossy Oak neighborhood, and we are doing our best to practice social distancing while pursuing our favorite quarry. It seems based on social media, turkey hunters in states that have open seasons are following suit, but we also see many families getting outdoors to fish, hike, or just breath some fresh air.
As a result of the current pandemic, the “outdoor lifestyle” may be more en vogue coming out of COVID-19 than ever before. People may have an increased desire to have their own farm or cabin in the country to get out of the congested urban areas. Families may start to realize a simpler dream in Rural America is truly the American dream. Simply put, the rural land market may be a benefactor from the current crisis.
While COVID-19 – and its accompanying economic slowdown – is certainly concerning, optimism abounds that this will be short-lived and our economy will rebound quickly due to strong fundamentals prior to the pandemic. Through February and even into early March, the rural land market was as strong as anytime in the past two decades, and barring a prolonged slowdown, the desire of many to own a piece of their own land will likely not wane, but only be enhanced due to the stock market rollercoaster and the increased allure of “fresh air” due to the quarantine experience.
Two factors that are especially important to consider regarding the future of the land market are historically low interest rates and low gasoline prices. In looking back at the 2008-2010 recession, both of those factors were considerably different than what we face at the current day. Why does this matter?
If money is “cheaper” to borrow due to lower interest rates, consumers are more inclined to finance a purchase such buying a farm or rural cabin. In 2008, the average 30-year fixed rate loan according to Freddie Mac was 6.03%. Currently, BankRate.com is showing 3.78% for the same loan type. These interest rates will prove to be very enticing for buyers coming out of the COVID-19 crisis who know how valuable and life-changing a land purchase can be.
In 2008, the average price per gallon of gas in the US was $3.25 a gallon. As of March 26, 2020, the average price per gallon of gasoline per AAA is $2.06 per gallon-and continuing to fall. Not only does a reduction in gas prices mean more disposable income for consumers, but for a rural land buyer it may give them more confidence to purchase a property that is a little further away from their primary residence.
Oftentimes, the price of gas can be prohibitive, especially for buyers that are purchasing properties that are an 8-plus-hour drive from home. This is one primary reason (along with big deer, of course) why states like Ohio became very popular with East Coast whitetail hunters that had traditionally bought land in Illinois; for many the drive was simply too far with those gas prices, and with a more than suitable substitute much closer to home.
When you add these two factors to the aforementioned “rural escape” mentality that may be prevalent after this crisis, as well as the possibility of some price improvements on current rural land inventory, the golden era of land buying may very well be upon us. While we don’t have a crystal ball to guide us on the length of the crisis and its impact to personal wealth, the fundamentals for a roaring comeback for the land market are certainly in place. To summarize, be ready to buy when the opportunity presents itself!
To begin your search for a piece of rural land, or to sell a property through our nationally-acclaimed network of land specialists, visit www.mossyoakproperties.com.