Land Costs Have Skyrocketed Over 40 Years
Land Costs Have Skyrocketed Over 40 Years. Image courtesy of imagerymajestic / FreeDigitalPhotos.net
Average land prices have risen over the past 40 years, with the biggest price growth mostly occurring in western and eastern states.
In 1975, all 48 contiguous states and Washington, D.C. had average land values below $15,000. After that year, land costs started a steady climb. In 2015, the cost of land to build an average home has grown to $97,138.
Land value is determined by subtracting the structure cost from the total home value. The data from the Lincoln Institute of Land Policy – a map showing the changes in average land values from 1975 to 2015 in each state.
California and Connecticut were the first states with average land values exceeding $140,000 in 1988 and 1989, respectively. By 1999, the majority of states had average land values over $15,000 – the central states and Alaska being the exception in remaining below $15,000.
It was the period from 2000 to 2007 that land values quickly appreciated, however. By 2007, many states had average land prices that were greater than $140,000, such as Nevada, Florida, New Jersey, California, Arizona, among others.
But from 2008 to 2011, the financial crisis sparked a plunge in land values across the country. The sharpest price reductions in land costs were in Nevada, Arizona, and Florida.
Land values are still recovering, although mostly not at the same levels as in 2007. What’s more, land values in a few states, such as Oklahoma, Mississippi, West Virginia, and New Hampshire remain below $15,000.
View an animated map showing the rising costs of land over four decades.
Source: “This Animated Map Shows the Rising Cost of Land in the U.S. in the Past 40 Years,” Howmuch.net (July 14, 2015)
