By Vicki Hickman
There is an old saying in real estate: When the market implodes, land is the first to go and the last to come back.
Looking at Mid-Hudson Multiple Listing Service (MLS) statistics for the Observer’s coverage area (Hyde Park, Pine Plains, Red Hook and Rhinebeck) over the last six months–sales indicate land is coming back at last. And, if you have driven around the area, you may see excavation sites and other signs of new construction.
In the last six months, MLS reports 23 sales ranging from $15,000 in Milan (5.11 acres) to $1,350,000 in Rhinebeck (57 acres) and from .48 acres in Red Hook to 69.44 acres in Northeast. Thus, small building parcels to large estate-quality land are selling in the area. All kinds of buyers are entering the market, from individual homebuyers building their own homes to contractors speculating on a revived market to wealthy individuals purchasing some of the premium real estate available. This is at a time when buyers sense that rock bottom land prices are moving upward in tandem with home sales.
What does all this mean to someone newly looking to purchase and build a home? What are the physical factors that impact price besides supply and demand. And what terminology are buyers facing as they start considering a possible purchase.
Most townships in the area have minimum acreage requirements based on master plans. These zoning changes guarantee that our area remains scenic by limiting the density of development. Generally, if listed acreage is under three acres, the parcel was created prior to a current plan and is considered grandfathered. In addition to supply and demand – there are few buildable lots left in the villages of Rhinebeck or Red Hook, for example — amenities also drive price. Mountain and pastoral views are the most expensive amenities along with quiet secondary or tertiary roads. Along with views is a water element, a pond, lake or stream. Lastly, many buyers are seeking privacy, especially the second-home market, which generally translates to larger parcels. Buyers have to decide if they want open or wooded settings; both can impact the value of the acreage.
Building parcels are considered “retail” and priced higher if they have Board of Health Approval (BOHA), which means engineering has been completed for a septic and the property is ready to build on. BOHA can impact price — an expensive or unsightly septic means the acreage is generally discounted. Approved septics in many areas can be very expensive based on subsurface rock or clay.
Many jurisdictions now want remaining land subdivided with a common or shared drive to minimize driveway cuts and traffic on and off local roads. With subdivisions come deed restrictions that dictate common shared expenses for road maintenance and proscriptions on home construction, to name a few. Along with deed restrictions, some land comes with conservation easements to limit development — these easements both add and detract from land value.
The very beginning of the land purchase process involves researching the inventory, talking to surveyors and engineers, and interviewing builders, architects and contractors who can assist in building your home.
From all indications, once we dig out from all this snow, 2014 will be a good year to consider a land purchase. Current MLS stats for the same area show there are 175 active land listings.
As Will Rogers famously said, “Buy land. They ain’t making any more of the stuff.”
Vicki Hickman is an associate broker at H. H. Hill Realty Services in Rhinebeck. You can reach her at 845-389-9952 or firstname.lastname@example.org.
Vicki A. Hickman
H.H. Hill Realty Services