How much does an acre of land sell for? It’s a simple question, but with a long, complex answer.
The price of an acre of land varies from less than $500 per acre to over $15,000 per acre. It all depends on where the acre is. Rural land is cheaper than urban land. Pasture land is cheaper than crop land. There are many factors that influence the price of land.
The cheapest land per acre is usually the most remote. Places like rural Texas and New Mexico have staggeringly cheap prices, because the land is so remote that there just aren’t that many buyers. Meanwhile, in states like California and Florida, land is far more expensive. The exact price of an acre of land depends on where it is, and it varies so much that there’s really no way to answer the question accurately. Keep reading to find out how you can determine what a good price per acre is in your area.
The answer to this question is complex, so we’ve done the hard work for you and completed the research necessary to give you a good idea of what an acre of land costs, and how to determine for yourself what a good price is.
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How big is an acre?
One acre is 43,560 square feet. For reference, a football field is 57,600 square feet, so a football field covers 1.32 acres.
Traditionally, an acre was 66 feet by 660 feet, but in modern times anything that covers 43,560 square feet, no matter the exact dimensions, is an acre. Another helpful visual is that a typical single-family home covers about one-fifth of an acre, so one acre could hold about five average sized homes.
Where is the cheapest land per acre?
In the United States, Tennessee, Arkansas and West Virginia are consistently cheap places to buy land for residential use. For other uses, such as hunting, West Texas is almost always the cheapest place to buy.
In fact, in rural West Texas prices for undeveloped land have been known to dip below $500 per acre, which is about as cheap as you’re likely to find anywhere. Of course, the catch is that rural West Texas is also about as remote as you can get in the United States. Your land would probably be several hours from the nearest gas station or grocery store. There’s a reason it’s so cheap, after all.
Is land a good investment?
As with almost any investments, land is only a good investment if you handle it properly. If you do your research, buy land at a good price, develop it well, and build its value, then yes, land is a good investment.
If you’re just going to buy land and do nothing with it, then you’ll need to get lucky in order for that to be a good investment. The advantage of owning land is that you can always develop it, either to sell it or to use it as a source of passive income by renting it out.
The downside is that you do have to invest in it beyond the initial cost of buying it. You need to develop it and maintain it. This isn’t like buying a stock, where you’re just hoping you’ve picked well and your investment will increase in value so you can sell it for a profit. You’re going to have to do something to increase its value.
Does land ever lose value?
Yes, land can lose value. An acre of land sold during a hot housing market will lose value if the market slows down. Or, say you purchase a few acres of land with a beautiful view of a city skyline, or a mountain range. If a developer puts up a bunch of high rise buildings that block that view, your land is probably going to lose value.
On a smaller scale, if you buy land in a residential neighborhood (with or without a house on it) the value of that land will be affected by the other landowners nearby. This is why many neighborhoods have homeowner’s associations- to protect their property values by ensuring that all the homeowners adhere to certain standards.
With undeveloped land, it can lose value if the market slows down, or if the land around it is purchased and developed in certain ways. There are many things which can cause land to lose its value, but this is true of any investments. Land can lose value, but it’s generally more stable than other investments you might make.
Is land or a house a better investment?
Buying undeveloped land and then building on it can often be a better investment in the long run. Depending on what the real estate market is doing you can save money on the initial purchase, add a lot of value to your land, and you end up with a property that’s perfectly suited to your needs.
This isn’t always true, though. For instance, at the time of this writing (summer 2021), the cost of lumber is so high that new construction is significantly more expensive than existing buildings, and it’s a much better idea to buy land that’s already been developed.
How much does an acre of land sell for?
The cost of an acre of land is going to vary a lot. Location will be one of the biggest factors in determining cost, with rural land generally worth less per acre than urban land. The average cost of farmland in the United States is about $3160 per acre, while the average price of cropland is $4100 per acre and pasture land averages $1400 per acre.
Of course, these are only averages and the exact cost is going to be very different depending on location. Farmland in New Mexico, for instance, averages about $575 per acre, while in Florida it's $5900 per acre, in California it's $10,000 per acre, and in Rhode Island it’s $16,000.
As a rule, land is more expensive the further east you go. As you head west the price of land drops until you get to the Pacific coast, where land values start heading upwards again, especially in California, which has similar costs per acre to the most expensive parts of the East Coast.
The Southwest also tends to have more affordable land prices, though it’s worth pointing out that this is largely because the land in the southwest is more barren than in other parts of the country. Desert land simply isn’t as valuable as the richer farmlands you’ll find in wetter regions. Waterfront property also tends to be more expensive, whether it’s on the ocean, a lake, or a river.
An acre of land that hasn’t been developed is also going to be a lot cheaper than an acre with a house or a commercial building on it.
In short, there is no simple answer to the question “how much does an acre of land sell for?” The answer to that question depends largely on the location of the acre in question.If it’s in California, it’s going to cost more than it would if it was in Texas. If it’s an undeveloped acre in the middle of New Mexico, it’s going to be a lot cheaper than an acre in a Chicago suburb.
An acre of beachfront property in North Carolina will cost more than an acre two miles inland from that same beach. Any of these properties would be cheaper if they’re undeveloped, too.
How to determine a good price per acre
Since there’s no one-size-fits-all price for an acre of land, you have to determine what each acre is worth. Sellers need to know how much their land is worth and buyers need to know if they’re paying a reasonable price.
You can always have the land appraised. A reputable appraiser can tell you what your land is worth, or if you're the buyer, they can tell you if you’re being ripped off.
One of the main tools that appraisers use to determine the value of property is to compare it to other, similar properties that have sold recently. So, they’ll look at properties of a similar size in the same area that have sold recently, and use those as the baseline.
That means that you can do the same thing. Records of those sales are public, although you’ll often have to ask the county tax office for them. You can then make those comparisons for yourself and get a sense of how much the property is worth.
The only downside to doing this yourself is that you’re not as experienced as an appraiser, so your estimate may not be as accurate. Furthermore, unless the land is being paid for in cash, an appraiser is going to be brought in during the buying process anyway. It’s they’re estimate that will determine the actual value of the property; if they estimate it’s worth less than the sale price then a mortgage lender won’t cover the full cost of the sale. If they estimate that it’s worth more than the sale price then the seller will probably never be told, and they’ll lose money on the deal without even realizing it.
If you’re buying land, this is a good reason to work with a real estate agent. They should have a very good idea of what the property values in the area are, and they can steer you away from overpriced sellers, as well as from land that’s suspiciously underpriced.
If you’re selling land, this is why it’s a good idea to have it appraised before you sell.