In light of recent events, it’s become evident that the significance of location in the real estate market has evolved. The COVID-19 pandemic has reshaped the way we work, granting many employees the flexibility to work remotely from virtually anywhere with an internet connection. This newfound freedom has led to a shift in priorities for property seekers, enabling them to explore housing options that were previously unattainable due to affordability constraints and commuting distances.

This transformative reality has liberated individuals from the constraints of geographical proximity to their workplaces, allowing them to choose where they wish to reside without the burden of daily commutes. For many, this newfound freedom has reignited interest in small towns, offering a quieter pace of life, improved quality of life, and access to good schools. Additionally, rising wages in various industries have made the dream of building a home and living the American dream more attainable than ever before.

If you’ve been contemplating selling your land but have been uncertain about the timing, the reasons outlined above, along with additional factors we’ll delve into below, will illustrate why there’s no better time than the present.

Here are five compelling reasons to consider selling your land now and taking advantage of the current favorable conditions in the real estate market.

Strong Real Estate Market:

The demand for real estate remains strong on a national scale as the country continues to recover from the impact of the pandemic. The shift towards remote work has enabled workers to explore job opportunities beyond their previous geographical constraints. This has driven up demand for housing, resulting in rising rental prices in many regions. In some communities, the shortage of available rental properties has reached a critical level, making it increasingly challenging to find affordable housing. This scarcity is particularly evident in areas with housing shortages, where finding any rental property has become nearly impossible.

As urban areas lose some of their appeal, buyers are increasingly seeking properties in rural and less congested settings. Moreover, the rising cost of lumber and shortages of essential building supplies have altered the way many approach home buying. The allure of vacant land lies in the opportunity it provides to shape the living space according to individual preferences. Given the exorbitant rental prices, tiny homes, recreational vehicles, and other manufactured structures are now viable housing options. By purchasing a small plot of land, buyers can establish the foundation for their desired lifestyle while remaining connected to the outside world.

Changing Life Plans:

Have your life plans evolved since you acquired your land? Perhaps you initially purchased the property with intentions of building a retirement home or using it for recreational purposes, but economic hardships or personal circumstances have altered your trajectory. Life is unpredictable, and despite meticulous planning, it sometimes takes unexpected turns. If your life plans have shifted, and you no longer require the land you purchased or inherited, selling it can provide a much-needed financial benefit and free you from the responsibility of ownership.

Tax Considerations:

Amid record consumer prices and inflation, many local municipalities are raising taxes to cope with the economic challenges. Additionally, as remote work becomes increasingly common, residents of heavily taxed states like California and New York are relocating to states with more favorable tax rates. Another factor that may influence your decision to sell your land is the cost of Homeowners’ Association (HOA) fees or membership dues associated with owning property in certain developments. These fees may have increased over time or become unreasonable, affecting the overall cost of land ownership.

Selling your land at this juncture might also have tax advantages. Capital gains tax, which is levied on the profit from the sale of non-inventory assets like real estate, may apply. If your land’s value has appreciated significantly since your purchase, selling it now could potentially reduce your tax liability. Conversely, if you acquired the land at a high price and are selling it at a loss, this capital loss can offset any capital gains from other investments. However, it’s essential to consult with a tax professional to determine how these considerations apply to your specific situation.

Historically Low Mortgage Rates:

For individuals with a good credit score, securing a mortgage for property purchase is an attractive option in the current market. When acquiring vacant land, you have the opportunity to design and build your dream home while benefiting from significantly lower interest rates compared to previous years. The mortgage rates of the early 2000s, before the housing bubble burst in 2008, averaged above six percent for a 30-year fixed mortgage. In contrast, today’s market offers 30-year fixed mortgage rates of less than 3.5 percent. Over the life of a loan, this lower rate translates to savings of over $145,000 in interest payments on a $250,000 mortgage.

While mortgage rates for land-only purchases are generally higher than those for traditional homes, they remain favorable compared to historical averages. Qualifying for a loan on vacant real estate typically requires a larger down payment, and mortgage companies may consider your intended use for the property, whether for recreation or building a home, when determining your interest rate. As a seller, one option to consider is owner-financing through a land contract. This approach can be appealing to potential buyers and may expedite the sale of your land, especially if attracting the right buyers has proven challenging.

Low Inventory of Vacant Land:

Vacant land is a finite resource, making it a valuable commodity. The current economic climate, characterized by low-interest rates and increased homebuyer activity, benefits both those looking to buy and sell land. Low mortgage rates make it more affordable for new homeowners to build their dream homes, while landowners looking to sell can command record prices for their properties.

In conclusion, the timing appears favorable for those considering selling their land. Economic shifts, changing life circumstances, tax considerations, historically low mortgage rates, and the limited supply of vacant land all contribute to a conducive environment for land transactions. Whether you’re a landowner looking to capitalize on these favorable conditions or a prospective buyer seeking to make the most of this unique opportunity, The current real estate landscape offers compelling reasons to act now.