Ranch land is a vital resource for farmers and ranchers, for lots of reasons. It provides room for livestock to feed and mature; it offers landowners private recreational opportunities; or it gives landowners the option to monetize the land for its assets, whether it’s through leasing land for grazing, selling access to hunting or fishing or opening a new revenue stream by starting a hunting or fishing lodge operation. However, the availability of ranch land is becoming increasingly scarce, and for a variety of reasons. The scarcity of ranch land means that ranch real estate inventory is thin, and it may take years before available ranch property returns to pre-pandemic levels.
What is making land so scarce?
There are several factors contributing to the scarcity of ranch land:
- The demand for ranch property is high, and that’s largely due to lifestyle changes fueled by the COVID-19 pandemic. As the need for social distancing increased during the outbreak, cash investors who were in the ranch real estate made quick purchases, greatly reducing the amount of available inventory.
- Ranch land is a safe, wise investment. The stock market is volatile. The pandemic impacted it greatly. Investors turned to ranch real estate as a safe and reliable place to keep their money. This impacts the available inventory even more.
- The cultural appeal of big spreads of wild land cannot be overlooked. In recent years, the very wealthy invested in large swaths of ranch real estate. They embrace the Western lifestyle and the allure of traditional American values, like independence, freedom, and adventure.
- Ranch real estate is a very productive place for investors who want to protect generational wealth. With many investors interested in securing their financial status and their legacies, ranch real estate offers a secure investment.
What’s the impact of land scarcity?
The scarcity of ranch land must be considered by investors or potential investors as they seek out their next purchase. Here are some factors to consider:
- With demand high and supply low, the ranch real estate market is at a premium. Simply stated, expect to pay more.
- Buyers who are interested in purchasing a ranch need to be ready to pull the trigger when the right ranch becomes available. In today’s market, many ranches are selling before they are even offered to the public. Hiring a good buyer’s agent is the best way for serious buyers to “get a seat at the table” for these off market offerings.
How can buyers and sellers address the challenge of land scarcity?
The first thing to understand is that the ranch real estate market should be considered separate from the overall real estate market. Most people who own ranches or ranch land have either owned it for generations. They don’t have any debt. Others bought land for cash in response to the pandemic.
The take-away? Ranch property isn’t subject to the same ebbs and flows of the larger real estate market. Investors in ranch property usually have little or no debt. So, the motivation to buy or sell is based solely on individual financial plans, the desire to protect wealth or to cement legacy and status.
Even in a market where ranch property is scarce, it remains a very good investment that will grow in value over time. And, presently, with fewer and fewer properties available, the value of ranch real estate can’t be understated. Using a good ranch broker can help you find quality property, even when the scarcity of ranch land is acute, like it is now.
