The combination of skyrocketing home prices and the pandemic-fueled shift to remote work for many people has upended real estate markets around the country—and created a new crop of housing hot spots. Wondering where they are? A good clue is the rising price of the most fundamental element in housing: the land itself.
“Land prices are going up everywhere,” says Ali Wolf, chief economist at Meyers Research. “It’s one of the hottest commodities that exists today.”
In some places, prices for undeveloped land have reached heights that would have been unimaginable just a couple of years ago. It’s largely a reflection of heightened interest from builders, who keep an eye on the demand for housing and are quick to spot an opportunity for profitable development.
And the prospect of an increasing supply of housing, in the midst of a historic housing shortage, is good news for buyers.
“Urban and close-in suburbs have always been the top priority for builders because we know more people historically will want to live close to employment centers,” Wolf says. “The difference in the past year is that builders are more interested in the land farther away.”
The places where raw land prices have risen the most since last year all have vibrant and growing economies, making them good bets for relocation. Some have a land supply limited by geography or local zoning ordinances—and as people fleeing more densely populated and expensive areas stream in, that demand pushes up prices for lots, just as it does for existing homes.
To discover these plains of opportunity where land values have shot up since the COVID-19 pandemic hit U.S. shores, the Realtor.com® team of data superstars looked at the average price-per-square foot increases from the first half of 2020 compared with the first half of 2021 in the 100 largest metros in the United States. (Metros include the main cities and surrounding towns, suburbs, and smaller urban areas.)
Ready for a land grab? Let’s go.
Average price-per-square foot increase: 92%
Median price per square foot for land: $2.52
As housing prices have skyrocketed in Florida’s coveted tricounty area (Miami-Dade, Broward, and Palm Beach), many longtime South Florida locals have either been priced out or decided to cash in and take advantage of their ability to work remotely.
Relocations from the tricounty area to more affordable locales on the west coast and in the central part of the state have ticked up 108%, according to Fort Lauderdale–based moving company Bekins South.
Now areas like North Port and Sarasota are getting more expensive, and local builders are sweating it out to meet demand. Some buyers are even getting their own plots and attempting to find a contractor to build for them—no easy task in the current market where contractors, laborers, and materials are in short supply, says Sharon Rodgers, a Realtor® with Michael Saunders & Co. But there are new developments going up all around the metro. In Port Charlotte, right next to the North Port border, buyers are snatching up future builds such as this three-bedroom home asking $314,900.
“We have a lot of builders in the area, and at this point, they’re inundated with contracts to build homes 18 months to two years out,” says Rodgers. “A year ago it was nine months.”
Average price-per-square foot increase: 72%
Median price per square foot for land: $9.17
Portland was in the news recently for its record heat wave, but its housing and land market is scorching-hot, too.
Like all the other metros on this list, Portland is seeing its population swell with transplants from out of state, but its restrictive land-use ordinances are contributing to the skyrocketing price of land. The zoning that has prevented urban sprawl and kept much of the rural feel of the region intact has helped to drive up land prices in and around the city.
In McMinnville, a small town about an hour from downtown Portland, buyers can put dibs on a cute three-bedroom for $393,990 or a sprawling four-bedroom for $555,900, both estimated for completion later this year.
Like other towns in the area that have recently decided to widen urban parameters to allow more development, land prices within those new boundaries have blown up.
“We’ve seen lot prices from being in the just under $100,000 a lot last year, to no lots for sale under $300,000,” says Andrew Burton, founder of Creekside Homes. “This is a small town—to see lot prices do that is certainly gut-wrenching.”
Average price-per-square foot increase: 67%
Median price per square foot for land: $1.38
Some economic models project that Los Angeles will need 207,000 more housing units to meet the city’s demand by 2025. Unfortunately, with the ocean on one side, desert on another, and steep hills in between, there isn’t a whole lot of space left to develop.
“There are very few destinations to go to” within the metro, says Dowell Myers, professor of urban planning and demography at the University of Southern California.
Those who want to find more affordable housing options are forced to seek out drier, hotter areas—often more prone to wildfires—farther away from the Los Angeles Basin. Land prices have been steadily increasing in these outlying areas.
This half-acre lot in Sunland, on the outskirts of the city, boasts plans for an 11-unit apartment building and is currently asking $1,350,000—more than double what it sold for in late 2019. To put it into perspective, a nearby three-bedroom home on a nearly 8,000-square-foot lot, which sold for $460,000 four years ago, is now on the market for $735,000.
Average price-per-square foot increase: 52%
Median price per square foot for land: $3.06
Boise’s housing market has been making headlines around the country as one of the hottest in the U.S. High demand, low supply, and a jump in lumber prices for new homes have pushed the metro’s median sale price up 32.4% year over year. In May, the median home price in the Boise metro exceeded a half-million dollars for the first time.
Those skyrocketing prices have spurred house hunters and builders into neighboring counties, which in turn is increasing land prices for the entire metro area.
Buyers who wanted to be closer to downtown have begun inquiring about places like Mountain Home in Elmore County, about a 45-minute drive southeast of downtown. Wannabe homeowners have begun snatching up brand-new homes such as this $399,990 three-bedroom in a new phase of the Morning View development.
Average price-per-square foot increase: 50%
Median price per square foot for land: $1.71
Even in 2019, the majority of the Raleigh City Council campaigned on addressing housing affordability—and increasing the “missing middle” housing, like townhomes and duplexes, for locals who can’t afford a sprawling single-family abode. The influx of tech workers from more expensive markets like San Francisco, Seattle, and Austin, TX, got turbocharged in the remote-work revolution of 2020, ratcheting up the cost of homes and land even more.
“Raleigh has great employment opportunities for tech workers, and housing is a lot cheaper,” says Wolf. “But it’s not cheap for people who already live there—those out-of-towners have driven that interest and prices up.”
To ease the affordability crunch, the city council is considering a zoning change that would allow new construction of duplexes, townhomes, and other types of housing in neighborhoods that now have mostly single-family homes. Right near North Carolina State University, the only vacant lot available is asking $499,999.
Average price-per-square foot increase: 50%
Median price per square foot for land: $0.40
Inventory of existing homes across New York state is so low that bidding wars commonly push prices $100,000 above asking—making new construction, and the land on which it will be built, incredibly valuable.
According to data from the National Association of Home Builders, the number of new builds in the state’s northeast has gone up 43% over the past year, and Syracuse has become an epicenter for builders and remodelers.
While the city is focused on building 50 new single-family homes in targeted city regions through its Resurgent Neighborhoods Initiative, the cost of land has gone up all around the metro—even in the exurbs. In what were once sparsely populated areas, house hunters have been buying brand-new homes such as this three-bedroom in Camillus asking $364,900 and this five-bedroom mansion in Fayetteville asking $1,999,000.
Average price-per-square foot increase: 47%
Median price per square foot for land: $0.43
The once-sleepy Spokane metro has gotten a jolt since COVID-19 allowed office workers to move from pricey coastal metros to more affordable locales. And the local job market is looking good, as well. Seattle-based Amazon has added about 4,000 jobs to the Spokane area in the past year, is planning to increase its workforce by 1,000 more.
Sounds great, right? But the combined metro area of Spokane and neighboring Coeur d’Alene, ID, has a couple of pricey problems on its hands. First, a Washington state law that exists to limit urban sprawl is preventing builders from developing much-needed new homes in less populated parts of town. Second, the Wall Street Journal/Realtor.com Emerging Housing Markets Index found that Coeur d’Alene, a beautiful resort town, has the fastest-rising home prices in the nation, due to an influx of rich folks and well-to-do retirees who have been snatching up multimillion-dollar lake homes like this four-bedroom listed at $2,850,000.
Of course, land prices have responded in kind with new developments in areas that will allow them. In the Northwood area of the city, this half-acre lot is on the market for $250,000; it last changed hands for just $65,000 in late 2019.
Average price-per-square foot increase: 41%
Median price per square foot for land: $0.72
About a three-hour drive from Atlanta, right across the Tennessee border, Chattanooga has been following the “If you build it, they will come” ethos. In the early aughts, the city invested $120 million to revitalize its downtown riverfront, and it was the first metro in the country to build a citywide 1-gigabyte network that offers locals lightning-fast internet at an affordable price—a pretty strong sell after all the dropped Zooms of 2020.
That tech infrastructure has been attracting a growing slew of entrepreneurs, startups, and other technology companies. As those well-paid new residents have flocked in, the land prices have ticked up substantially.
One 2,614-square-foot lot that allows the construction of a single-family or multifamily unit by the riverfront that was sold for $21,000 in 2011 is now on the market for $200,000. And no, that’s not an anomaly.
Average price-per-square foot increase: 36%
Median price per square foot for land: $0.80
Alabama made United Van Lines‘ top 10 list of states with the most people moving in rather than out. Some of this is business-led: A slew of tech companies, including Landing and Prepaid2Cash Holdings from San Francisco and HealNow from New York City, have moved their bases to the Birmingham metro area. Obviously, those extra residents need to live somewhere, which has driven up home prices more than 10% since last year.
All around the metro, developers have been buying land and old buildings for housing, from a $25 million affordable housing project in historic Ensley to upscale single-family homes, including this $468,970 four-bedroom in Eagle Point going up on the site of a former golf course in the coveted Oak Mountain School District.
Average price-per-square foot increase: 35%
Median price per square foot for land: $6.14
The City of Brotherly Love is not exactly feeling the love when it comes to real estate deals. It’s so hard to score a home that prospective buyers are essentially at war with one another to win bids.
Philly has been getting an influx of new residents who want to be near New York City and Washington, DC, but enjoy urban amenities like nightlife, nearby restaurants, and cafes at a fraction of the cost. Developers have been trying to keep up with brand-new townhomes on the few vacant lots available close to downtown, such as this $525,000 three-bedroom in East Kensington, and sprawling single-families in newer developments farther out, like this $534,900 three-bedroom in Media, 40 minutes outside the city. Those new builds are affecting the price of available lots all around the metro.
“Land is at a premium because Philly is a long-established area—there’s just not a lot to build on,” says Joseph Smogard, founder/owner of My Philly House at Compass. “Now we’re absolutely seeing more people sprawling from the well-established areas to new towns a little farther out.”