What’s an Affordable Price for Land Right Now?

Common questions about buying land for sale, including this lot in Henderson County.
Featured Property: Lot 4 Pinnacle Mountain Road in Zirconia | 1.35 acres | $68,000

Of all the oft-quoted figures on the internet, we reckon Mark Twain is probably in the top five. So, we hope you won’t be disappointed if we start with a quote from him today. He once wrote:

“Buy land, they aren’t making it anymore.”

Mark Twain

You know, he has a good point. But with today’s real estate prices, how can you be sure you’re getting a good price for the land you’re buying? Whether your upcoming land investment is financial or emotional (or both!), Beverly-Hanks is here to help. 

Today, we’re going to address some common questions about buying land for sale, including the cost of land in Western North Carolina right now.

What is the Difference Between Raw Land and a Finished Lot?

Before we talk about the prices of land for sale, it’s important to distinguish between the types of land home buyers purchase. Not all land is created equal.

Raw land is land in its most natural state, before cultivation or improvements of any kind. Also called “unimproved land,” it is a blank canvas on which you can build anything you want, subject to soil quality and zoning laws. 

Finished lots are primed and ready for building. Also called “improved land” or “developed land,” finished lots have services and utilities in place, including electricity, water, telephone, street access, and walking paths.

If you’re looking at two nearby lots of land for sale, and the prices differ wildly, this may be why. Just as you would with a new car or existing home, be sure you understand the amenities that come with your purchase. When comparing prices, the condition of the land (along with the size of the lot and location) is a significant factor in its cost.

What’s the Median Sales Price for Homes in WNC?

“Why go into the price of existing homes when we’re talking about land?” we hear you asking? We promise this isn’t a detour.

Since land and the homes on them are inextricably linked, it pays to understand the greater real estate market in WNC. Right now, the median sales price of homes in our nine-county region is $325,000. However, home prices still vary widely by county and even neighborhood. For instance, in Rutherford County, the median home sales price is $240,000. But in Buncombe County, the highest in our area, homes are costing buyers a median of $360,000—50% more. 

How Much Should You Budget for Buying Land when Building a House?

Similarly to the myth about how much as a percentage of your income you should spend on an engagement ring, there’s no hard and fast rule for how much you should spend on land when building a house. However, you don’t want to pay so much for land that you can’t build the house you want. And you don’t want to skimp on location just to build a luxury home that’s out of scale with your neighborhood. 

The general rule of thumb is to budget 20–25% of the finished house value on the land you’re buying, and no more than 33%. For a finished home valued at our region’s median sales price of $325,000, that means you should spend between $65,000–$81,250 on your lot.

However, there are other factors that may influence your purchase decision, including evolving market conditions, acreage, location, and property-specific development conditions. Are you more interested in finding the perfect location for a multi-generational home than future resale value? Is acreage for horses more important than luxury appointments? If you want to crunch the numbers and find what price range works best for your goals, we can help!

How Much does Land Cost in WNC Right Now?

We’ve seen home prices in WNC continue to climb in recent years. Is it realistic to find lots available for $65,000? Actually, yes. But like our active housing markets, the supply is dropping quickly.

2020’s market represented the most active year for lot sales (0–3-acre lots in subdivisions) in over a decade. The extreme shortage of homes for sale finally tipped a critical mass of home buyers towards purchasing a lot for future build. Every county in the region reported at least a 20% increase in sales. And in fact, Madison, Mitchell, Rutherford, and Yancey counties reported more than a 100% increase. At year’s end, the supply glut which has existed since the peak of the last sales cycle 15 years ago took a noticeable turn down. The number of lots available for sale dropped by 12%. 

As of January 1, the average sales price per lot was $90,712. However, small numbers of high priced lots always tip the average up. As you can see from the chart below, two-thirds of the active lots available are listed below $100,000, with the majority of those listed below $50,000.

Active (12/31/2020) vs Closed (2020) Lot Listings in WNC

Ready to Find a Plot of Land for Your Dream Home?

At Beverly-Hanks, we know that pricing is one of the “Big Three” concerns for home buyers. Whether you’re buying an established home or starting with the land on which to build your dream home makes no difference. That’s why our goal is to make sure you never have to ask yourself, “How do I know that I’m not overpaying on my new home?” Our process begins broadly and narrows its focus until it is specific to you. 

With no end in sight to the shortage of homes for sale, we expect the market for lots in restricted subdivisions to remain strong in 2021. Don’t wait! Find land for sale in Western North Carolina today.

2 Responses to “What’s an Affordable Price for Land Right Now?”

  1. Martin Lesser

    I have two adjoining lots I’d like to put on the market (Lots 59 & 40) in the Crestview pointe subdivision in Waynesville,NC. The lots have both perked and have Utility access with paved roads around them. My lots are relatively flat and have a western sunset view overlooking Hazelwood and the blue ridge mountains in the distance.Please respond to this e-mail.

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