Published on Aug 31, 2020 by Mark Van Den Berg, ARA
Living on a farm in rural Michigan most of my life, I’ve enjoyed sunrises over a muck valley, locally grown produce, cruising down gravel roads, and having enough distance between neighbors. In a small farm town, you know where your hamburger and the fresh toppings on it came from. I did not know while growing up that most people weren’t blessed with knowing what I did when it came to food production.
Fast forward to 2020 and everything we thought we knew changed. What once were fully stocked shelves and freezers at the grocery store in February 2020 were now empty in mid-March. Gone was the feeling of safety and security in the suburbs and big cities. The urban centers that were booming in the mid to late 2010s were beginning to lose their appeal. Fear of government shutdowns to protect people from COVID-19 lead to mass purchasing and sent shockwaves through our food supply chain.
In the search to be more sustainable and to avoid large population centers, buyers are beginning to look into having their own piece of country living. The Realtors Land Institute published an article on April 24, 2020, titled “COVID-19 Impacts on Rural Residential Hobby Farms,” which looked into this new trend. In the article, Lisa Johnson, ALC from Horsepower Real Estate in Junction City, Oregon, mentioned that they are receiving a lot of calls for parcels ranging anywhere from 5 acres to 100 acres, from people currently living close to the metropolitan areas. Lisa also mentioned that the shift to remote working allows people to move out of urban areas and onto rural residential properties. Eric Zellers from Ary Land Co. in Coweta, Oklahoma, is seeing a similar trend. According to Eric, there are several potential buyers asking if sellers would be willing to split large chunks of land into 5 to 10-acre parcels.
In my market in southeastern rural Michigan, this trend was just starting before COVID-19 hit with large parcels of marginal cropland being purchased by suburban buyers for potential building sites; however, the pandemic sped up the transition. The ratio of sales price to list price ranged between 96% to 100% since April with the average days on market ranging from 20 days to 50 days. Several properties in this time frame sold above the asking price.
This trend will likely continue through 2020 and into 2021 as more and more people look to enjoy what we have in rural America.