How Much is an Acre of Land Worth? (Value Per State)

The saying is seemingly as old as time: “buy land, because they aren’t making any more of it.” This is meant to illustrate just how valuable land is as an investment. But it is important to understand the value of that property, especially in today’s climate.

So, what does an acre of land cost today? Well, the short answer is “it depends.” An acre of land these days can depend on the market and can even range from a few hundred dollars all the way into the millions.

Like any other asset, land values are based on the old supply and demand chain of causation. If you pick a really desirable location, it is likely to be worth far more than a less desirable one. It really can be as simple as that.

While there is no simple answer when determining what an acre is worth, there are some determining factors, particularly in the specifics of the location itself. For instance, if the land is sloped or flat, whether or not it is close to paved roads, or if utility services are easily accessible.

Believe it or not, only 6% or so of the land in the United States in developed. This means that the land is covered with either buildings or roads and that it is generally far more valuable than land that is undeveloped and far from civilization.

Location plays the most important factor of all of the determinations going into land value. In the continental United States (48 states), there are around 1.9 billion acres of land. The average value of that land is around $12,000 per acre.

There are also huge ranges in that average, however. Consider that an acre in Wyoming can cost just over $1,500 while an acre in New Jersey can run nearly $200,000. Again, it’s all about the location and the demand of that location.

Even from state the state, there can be a huge variation in the cost of an acre. Generally speaking, land that is in the middle of nowhere will be much cheaper than land in a highly desirable portion of the country. Hence the old term “location, location, location.”

In California, where seemingly everything is expensive, the discrepancy can be staggering. The average land value is around $39,000. But there is a lot specifically in Atherton, CA that sold back in 2017 for a whopping $6.9 million. Location, location, location.

On the other side of the coin are places where land is either very cheap or even given away. Farmland in New Mexico, for example, is worth around $530 per acre. And in Marquette, KS, there has even been lots given away so long as the new owner agrees to not only build a house on that lot, but live there for at least a year.

Being able to acquire a quality piece of land means having a sound investment. Because there is a finite amount of land, there is always more demand than supply. And when you can land a piece of property that is in high demand, you create a valuable commodity and an even more valuable investment.

If you can find that piece of a land at a great price, even better. Depending on where you are looking to acquire land, it may surprise you one way or the other to learn just what a parcel of land can run you on a state to state basis.

That means being strategic about when you buy. Getting the best deals and prices creates the best investment opportunities. For instance, buying multiple acres at a time typically yields the best overall deals. As you can see from the chart above, there are some states where a few acres of land can be less than the newest smartphone.

While we all think that land is developed for commercial use, that is not actually the case. Yes, it is a driving factor in land values, but there are more and more residential developments popping up. Large communities of homes are becoming more popular across the country and those developments want premium land to build on.

In addition to that, there are also large hunting preserves as well. Particularly in the southern United States, there are huge swaths of land that are incredibly valuable that have been turned into hunting preserves. These serve as incredibly valuable business ventures and opportunities for gamesmen.

Knowing what makes a piece of land valuable is one of the first steps in determining whether or not to buy it. Plus, there are a plethora of potential developmental steps that need to be taken depending on the condition of the land.

So, as you can see, there is quite a bit more to buying land than simply deciding you like that plot and paying for it. The value of the land itself has so many influencing factors that it is easy to find a plot of land that is more difficult to develop than another. Keep that in mind when you buy.

Land is not generally something that you prospect or wait to buy. The old saying is “don’t wait to buy real estate. Buy real estate and wait.” If you are willing to put the time in and do the research, there are deals to be found. The point being that you have to find them.

Thinking wholesale helps, too. The more land that you can buy in one shot, the better the deal you are likely to get on it. It is also beneficial to know the condition, as well as the location, of the land. Sure, some of it may not be usable today but we don’t know what tomorrow brings.

Property is valuable no matter what condition it is in and if developed properly, that piece of land can grow exponentially in value in just a short period of time. Keep an eye out for vacant land in different areas. With so little of it available, you could have the next big investment on your hands. It takes money to make money and being able to buy valuable property is a huge potential investment.

Developed property is some of the most valuable property that you can buy. This is land that is ready to be built upon in short order. But there are many different definitions to the term “buildable” and it can be confusing to know the difference.

To some “buildable” means that the county or city will let you build. To others, this is describing the actual characteristics of the land itself. For instance, the land couple has light sloping and a lot of acreage but it doesn’t necessarily mean that the property has immediate developmental potential.

Look for properties that have utilities on site. Also, if the studies have been completed (environmental impact comes to mind), the better. That’s not including any kind of services or permits that may be required or already available. Just make sure that it won’t cost you way more to prepare for development than actually building.

Location is the single biggest factor in determining value in a property. If that piece of land has all of the necessary permits and the like yet still has a great price, it is due to the location. The closer you are to larger hubs of entertainment and shopping, the more valuable that piece of land will become.

Keep in mind that this type of investment may be hard to hold onto for some. It costs a lot of money to get into the hottest pieces of land and developing it can cost even more. It may be a better idea to find development potential in lesser demand areas and develop from there.

Buying land is rarely simple. When you are looking for residential land, you need to know whether you are going to build a restricted subdivision or an unrestricted subdivision. This can be an important determining factor in the piece of land that you wind up purchasing.

Unrestricted Subdivision. Unrestricted means that there are no HOA or POA to answer to. There is no enforcement committee that will work to keep appearances up or maintain property values. Still, there could be restrictions put into place by either the city, county, or state, so be aware of those. You will find these restrictions on the deed of the property itself.

Restricted Subdivision. In this type of development property, the restrictions are actually implemented by the developer. Those restrictions can be different for that planned subdivision and community. Also, the rules are enforced by the aforementioned Home Owners Association or Property Owners Association.

In subdivisions like these, the homeowners are expected to comply with all of the restrictions so as to protect property values. This can restrict things like how many homes can be built in a lot, the size of the home, types of homes that may be built, potential setback lines, upkeep and care of the homes, what kind of landscaping you can have, and even rules that pertain to pets.

POA and HOA fees need to be paid as well. This can be monthly or yearly and are meant to help maintain signs, crevasses, roads, pools, or any other necessary improvements to help maintain property values.

Going for an unrestricted lot may be the better play depending on your plans. Subdivision restrictions can be quite strict and difficult to workaround. At least know what you are getting into before committing because those restrictions can sometimes make or break a deal.

If you know that the piece of land you have in mind is already zoned residential, it is important to know that the areas surrounding it aren’t zoned differently. If land that surrounds your property is for commercial use, they can have buildings built for industrial purposes. Likewise, if it zoned for agriculture, it can be used to keep livestock. In an ideal situation, the surrounding land will also be zoned for residential use.

Knowing if there are already utilities on-site can impact the value of the property, too. Ask if there are sewer, water, electric, cable, and telephone lines already available. If they aren’t, you need to have the service provider run lines onto the property for an additional fee. In rural areas, this can be a major hindrance and cost in the tens of thousands of dollars to resolve.

Consider who will have access to your property. This will include things like utility companies, oil companies, natural gas companies and potentially even easements that will allow for access to properties surrounding the one you choose.

Any easements can have a huge impact on where you can build. This is why it is important to know the location of any potential easements on the property. It is also important to know where you will be placing the home itself if you plan to build for residential purposes.

These can have a major impact on the actual construction of the home, so make sure that you know what these two conditions are and that they are favorable when you consider buying that parchment of land.