The Issue of Land Scarcity
By Jim Copeland, Broker/Realtor
I have about a half dozen clients right now who are looking for idyllic rural parcels that are off of the beaten path.
As I reflect back over the last 30 years in this business, I'm confronted with the fact that the supply or rural parcels and building lots is nowhere near what it was when I first started. I can recall having 640 acres of beautiful land listed near Placerville, California, in the late 1970's. It had almost one mile of the Cosumnes River running along one the northern boundary. I used to enjoy going out there to eat my lunch next to the river and simply absorb the peace of the place. I missed it when it sold. There is nothing like it on the market now in this area.
As I now cast about for land opportunities for my buyers I'm keenly aware of the lack of quality parcels of 10 acres or more. Over half of the land in El Dorado and Placer counties is owned by federal government agencies such as the Forest Service and Bureau of Land Management. Most of this land is above 2,500 feet in elevation in the timbered areas of the foothills and runs easterly into and over the Sierra Nevada Mountains. At the other, westerly end of our counties, high-density growth is squeezing out rural parcels. In between the two extremes, you have a roughly 25 mile wide swath running from north to south along the western flank of the Sierras. Within that swath you can find the rural parcels that people seek. Even so, much of the land within the "swath" has already seen home-building and other growth.
For the most part, larger parcels that could be subdivided have already been split and sold off. The remaining parcels that are on the market are often steep, without utility services, have poor or no access, and have limited building areas. I would estimate that only one out of five parcels that are for sale have the beauty, usability, privacy, utilities and price that my clients seek.
It is interesting to note that during the last four-year slump in housing prices, land prices have remained relatively stable by comparison, due to several facts:
Severe government restrictions, costs, environmental regulations, and development fees continue to restrain the subdivision of larger parcels into smaller parcels,
- There is a limited supply of private land remaining due to the large amount public land owned by the government or encumbered by "conservation easements," and
- A large number of homes have already been built in the rural counties of the Sierras, further restricting the supply of undeveloped land that remains.
- Severe government restrictions, costs, environmental regulations, and development fees continue to restrain the subdivision of larger parcels into smaller parcels,
Because of the resulting limited supply, I anticipate prices to not only remain stable but to increase in the long run. Other factors include our high quality of life, demand for small town areas, dramatic increases in California's population, geographic movement of people from urban areas to foothills areas, good schools, mild weather, beautiful surroundings and numerous recreational opportunities.
My advice is that if you have the opportunity to buy a piece of land that isn't 100% perfect but meets most of your needs and is in a great location, consider moving ahead and then improve the land to make it perfect. If it is a little too steep, consider enhancing the view by removing a couple of trees. If the access needs some work, offer enough less on your purchase offer to make the necessary road improvements. If you have concerns about whether it will take a septic system or if water will be available, get those questions answered as a condition of your purchase. If it is a little barren, get busy and do some planting and irrigating. Having been in the business of building many homes in the country, I can tell you that a little pruning, some minor grading and brushing, and a few improvements can turn a rough piece of ground into a park. One of the most enjoyable parts of my earlier contracting life was brushing land to create a beautiful building site or area for a deck, while selectively saving heritage trees or monolithic rocks. The results were often dramatic.
In short, finding the "perfect" piece of land will become increasingly difficult in the years to come. However, I can help you get most of the way there and you can then add your own finishing touches.
If you would be interested in learning more about buying rural property, please let me know and I can send you a consumer protection pamphlet entitled "Before You Buy Land." It talks about what you should know and what questions to ask when buying country property.