Virginia Tech® home

Agricultural Land Sales in Virginia, 2019-2020

ID

AAEC-324P

Authors as Published

Authored by Patrick Kayser, Analyst, Land Use-Value Assessment, Virginia Tech; Jennifer S. Friedel, Director, Land Use-Value Assessment, Virginia Tech; Stephanie Hentemann and MacLayne Morrow, Undergraduate Research Assistants, Land Use-Value Assessment, Virginia Tech

Photo courtesy of Stephanie Bossert, Virginia Cooperative Extension.

Abstract

This report succeeds the “Agricultural Land Sales in Virginia” report (Kayser et al. 2022) analyzing agricultural land1 sales in the Commonwealth of Virginia from 2010 through 2018 (the “2018 Report”). Similar to its predecessor, this report provides insight into agricultural land sales in the Commonwealth from 2019 through 2020 and summarizes the averages of market-based agricultural land transactions at the multicounty district and statewide levels. The highest growth rate was observed in the Northern Agricultural Statistics District (ASD). Statewide, the market-based estimates of farmland averaged $5,533 per acre in 2020, a 14% increase from 2019.

Section 1: Motivation and Statewide Overview

Introduction

Virginia’s rich tradition in agricultural diversity has stamped its significance to Virginia’s economy in the history books. Agriculture is the largest private industry within the Commonwealth with an estimated $82.3 billion in annual revenue (Virginia Department of Agriculture and Consumer Services, n.d.). Farmland continues to account for the vast majority of farm asset value (Hellerstein, Vilorio, and Ribaudo 2019). This report takes a close look at actual agricultural land sales in 2019 and 2020 and analyzes those arm’s-length open market transactions.

Unlike the U.S. Department of Agriculture’s National Agricultural Statistics Service landowner opinion-based valuation surveys, this report reflects actual market transaction data as reported to the Virginia Department of Taxation. The procedures and research processes remain the same as the 2018 Report, although the years studied are different. This report reflects the market trends that occurred just prior to and in the early stages of the COVID-19 pandemic.

The Data

The data analyzed represents the fair market value of agricultural land in recorded arm’s-length transactions. For the purposes of this report, the fair market value is deemed to be the value of the land on the open market through an analysis of recorded sales of undeveloped land of 20 acres or more. This data is independently reported to the Virginia Department of Taxation by each locality. Each transaction transferred into the Virginia Department of Taxation’s database lists the date of recordation, instrument number, document type, guarantor and guarantee, sales price, and a description of the parcel(s). The analyzed data does not include all agricultural land sales in the Commonwealth of Virginia. However, it is a large sample of fair market or “arm’s length” transactions, which excludes land transfers such as sales within a family, foreclosures, or sales to a government unit within the Commonwealth. A total of 1,992 transactions were reviewed and included in this analysis. Each transaction has been crosschecked and verified for accurate acreage and sale values.

1 Reference to “agricultural land” throughout this report includes undeveloped land of 20 acres or more that may also be forested and/or have diverse topography.

Research Purpose

Statistics in this report should be regarded only as indicators of past general conditions in the agricultural land market. The reported data does not represent the prices or values of any parcel. However, the statistics do provide a general guide to Virginia agricultural land market values and geographic trends. Users should not regard these reported statistics as a substitute for an appraisal or market study of current local sales regarding the value of any particular land parcel. This data is intended to provide information on historical Virginia agricultural land markets and does not forecast future market values. The analyzed data may reflect forestland as well as open land that may not be suitable for agricultural use. The data collected for this report comes from two specific land class codes in the Virginia Department of Taxation’s land sales transaction database: Class 5 and Class 6. Class 5 consists of undeveloped parcels greater than 20 acres but less than 100 acres, and Class 6 consists of all undeveloped parcels greater than 100 acres.

Methods and Procedures

The data sourced from the Virginia Department of Taxation went through a validation process for this report. The data was sorted by locality, then each transaction’s sale price and acreage were validated using the local GIS system, land records, and/or property tax records. Parcel transaction data with an error in the class code or with missing sales information were excluded to obtain an accurate and effective representation in each locality. Data that remained after the two stages of cleaning and validation were checked for outliers using a box plot. The variable containing the “value per acre” in dollars was used as an indicator for outliers and any transactions with a value above or below the 1.5*IQR (interquartile range) were removed. Additionally, individual transactions with a large number of acres (more than 35,000) were also removed. After the data from all localities were compiled into a single spreadsheet, descriptive statistics were calculated for each locality.

Statewide Overview

This analysis found that the average price of agricultural land sold in Virginia during 2020 was $5,533 per acre, a 14.29% increase from 2019 (fig. 1). This is in contrast to the USDA’s survey of farm real estate values in Virginia (a measurement of the value of all land and buildings on farms), which estimated an average of $4,620 per acre in 2020, a 0.65% decrease from the year 2019.

A combined bar and line graph showing total numbers of land sales, the average price per acre of those purchases, and a stark difference between the actual prices paid and the USDA estimated farm real estate values, especially for the year 2020.
Figure 1: Estimated Virginia Ag Land Values and Volume, 2018-2020.

In 2020, land sales saw a wide variation in price per acre: About 72% of the sales were less than $7,000 per acre and 18% of sales had prices between $7,000 and $13,000 per acre. A smaller percentage were higher dollar-per-acre sales, comparably speaking, as sales above $13,000 per acre accounted for 10% of all transactions (fig. 2).

 A bar graph showing the number of sales transactions according to land value. The highest number of transactions were for land valued at $1,000, $2,000, or $3,000 per acre (296, 353 and 306 sales, respectively).
Figure 2: Value Per Acre by Transaction Volume, 2020.

Figure 3 shows the distribution of parcel size for the data year 2020, including the volume of transactions in property classes 5 and 6. As expected, smaller parcels of land change hands more frequently than larger parcels. Most observed agricultural real estate transactions transferred 200 acres or less, with the bulk of transactions ranging from 20 to 80 acres. In 2020, there were 939 parcels sold between 20 and 39 acres, accounting for 47% of all reviewed sales.

A bar graph showing the number of sales according to acreage, including 939 sales of parcels between 20 and 39 acres; 398 sales between 40 and 59 acres; and 222 sales between 60 and 79 acres.
Figure 3: Parcel Size and Sales Volume, 2020.
A bar graph showing the number of land sales in 2018 (1,816 sales), 2019 (1,958 sales) and 2020 (1,992 sales), as well as the total number of acres included in those transactions.
Figure 4: Annual Number of Sales and Acres Sold, 2018-2020.

In comparison to 2018, the number of land sales were relatively higher in 2019 and 2020. The number of transactions increased from 2019 to 2020 but the acreage volume decreased from 2019 to 2020 (fig. 4).2 In 2018, approximately 123,706 acres of land were sold, which increased by roughly 14,000 acres in 2019, but decreased in the following year (2020) by almost 8,000 acres.

 

Section 2: Regional Overview

Regional averages were analyzed by USDA-established Agricultural Statistics Districts (ASD). An ASD is defined as a contiguous group of counties having relatively similar agricultural characteristics (USDA NASS 2018). The map and table below outline each ASD for this report (fig. 5). The average and median sale prices (dollars per acre) in each of the Agricultural Statistics Districts are reflected in table 1. As is true with all real estate, variations in individual parcel values reflect a variety of observed and unobserved characteristics of individual parcels including soil quality, population and urban influence, recreational and natural amenities, locational characteristics, etc.

From 2018 to 2019, the mean value of land per acre mostly decreased, dropping 3.06 percent statewide. The largest decline in the mean value of land per acre was in the Eastern ASD with an 11.6% decrease. Looking at median values, the largest decline was in the Southeastern ASD, which decreased by 10.4% in 2019. In contrast, in 2020, the mean value per acre increased by 14.3% statewide. The highest mean land values for 2020 were seen in the Northern ASD at $9,600 per acre, followed by the Western ASD at $5,851 and the Central ASD at $5,747. Both the mean and median values dramatically increased for Southeastern ASD from 2019 to 2020 by 26.5% and 32.9%, respectively. The Northern ASD also had a large mean (20.6%) and median (24.1%) increase from 2019 to 2020. The other districts saw mixed results for the average and median agricultural land values.

2 The correlation between the decline in acreage volumes from 2019 to 2020 and the COVID-19 pandemic was not studied as part of this analysis and the authors make no representations thereto.

A map of Virginia color-coded by its seven Agricultural Statistics Districts, with a table below detailing the jurisdictions in each district.
Figure 5: Agricultural Statistics Districts (ASD) of Virginia.
Table 1: Average and Median Per Acre Sales Prices by District, 2018-2020.
District Mean/Median

Year

2018

Year

2019

Year

2020

%Change

2018-19

%Change

2019-20

Central

Mean

$5,470

$5,534

$5,747

1.18%

3.84%

Central

Median

$3,975

$3,988

$4,142

0.32%

3.86%

Eastern

Mean

$4,699

$4,156

$4,818

-11.56%

15.95%

Eastern

Median

$3,125

$3,054

$3,396

-2.26%

11.17%

Northern

Mean

$8,714

$7,964

$9,600

-8.61%

20.55%

Northern

Median

$7,854

$7,073

$8,780

-9.95%

24.14%

Southeastern

Mean

$3,741

$3,717

$4,701

-0.65%

26.49%

Southeastern

Median

$2,481

$2,222

$2,953

-10.43%

32.87%

Southern

Mean

$3,456

$3,478

$3,524

0.62%

1.33%

Southern

Median

$2,564

$2,400

$2,541

-6.40%

5.86%

Southwestern

Mean

$4,414

$3,990

$4,554

-9.61%

14.14%

Southwestern

Median

$3,177

$3,243

$3,500

2.07%

7.94%

Western

Mean

$5,959

$5,756

$5,851

-3.41%

1.65%

Western

Median

$4,899

$4,505

$4,823

-8.05%

7.07%

Total

Mean

$4,994

$4,841

$5,533

-3.06%

14.29%

Total

Median

$3,557

$3,523

$3,928

-0.96%

11.50%

Table 2 shows the breakdown of recorded agricultural transactions across ASDs from 2018 to 2020 (prior to the data selection process). The recorded transactions in the Central, Southwestern, Northern, and Southern ASDs were the highest among all the districts in the Commonwealth.

Table 2: Land Class 5 and 6 Sales, 2018-20203
Number of Recorded Transactions
District

2018

2019

2020

Central

663

579

681

Eastern

224

213

166

Northern

310

294

387

Southeastern

208

209

177

Southern

294

301

281

Southwestern

472

512

496

Western

192

211

215

Total

2,363

2,319

2,403

The number of agricultural land acres in Virginia sold on an annual basis remained close to the transaction volumes observed for 2019. Statewide, agricultural land sales totaled 129,536 acres in 2020, which is 0.86% less than the average annual acres sold in 2018-19. The volume of land sales varied by agricultural district, but the largest contributor to this decline was the Southeastern ASD. The Northern, Central and Western ASDs have a higher volume of land acres sold in 2020 than the previous two years.

3 These values represent the original data from the 2019-2020 Virginia Assessment/Sales Ratio Studies from the Virginia Department of Taxation.

Table 3: Agricultural Land Sales Trends, 20204.
District
Number of 2020 Sales
2020 Total Acres Sold

Average Annual Acres Sold 2018-2019

% Change in 2020 from 2018-2019 Average

Central

548

37,315

32,458

15%

Eastern

143

10,019

11,835

-15%

Northern

255

14,241

11,060

29%

Southeastern

156

11,039

16,090

-31%

Southern

278

18,399

18,849

-2%

Southwestern

431

23,454

27,164

-14%

Western

181

15,069

13,209

14%

Total

1,992

129,536

130,665

-0.86%

Section 3: Virginia Real Estate Class Trends

Figure 6 and table 4 below take a broad look at all reported Virginia real estate transactions published in the annual Virginia Assessment/Sales Ratio Studies5 between 2010 and 2020, examining the sale frequencies for all six land classes designated by the Virginia Department of Taxation: single-family residential urban (Class 1), single-family residential suburban (Class 2), multi-family residential (Class 3), commercial and industrial (Class 4), agricultural land 20 to 100 acres (Class 5), and agricultural land over 100 acres (Class 6).

A line chart showing the number of non-agricultural land sales and agricultural land sales over the years.
Figure 6: Total Sale Trends by Property Class, 2010-2020.

4 The values in this table reflect final data obtained through this report’s selection and validation process.

5 Virginia Department of Taxation Assessment/Sales Ratio Studies. Available online: https://www.tax.virginia.gov/assessment-sales-ratio- studies.

Looking specifically at the transactions in 2019 and 2020, total sales modestly increased, although property Classes 3, 4, and 6 experienced a marginal decline. Unsurprisingly, the residential housing markets dominate the share of total land sales in 2020, of which single-family residential urban property sales accounted for more than 68% and single-family residential suburban property sales account for over 26% of arm’s length transactions. In 2019-2020, multifamily residential sales and Class 6 agricultural land sales had the lowest shares (less than 1%) of total sales, with averages of 0.65% and 0.3% respectively. Agricultural land sales (Class 5 and 6) accounted for roughly 2% of the total number of sales in both 2019 and 2020. The overwhelming majority of agricultural land sales, 85% on average, were under 100 acres (Class 5).

Table 4: Total Number of Sales by Property Class, 2010-20206.

Property Classification

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

Class 1

25,475

23,831

27,340

32,627

32,158

40,133

46,349

50,653

50,203

81,510

82,896

Single-family Residential Urban

54.00%

53.90%

54.70%

54.40%

52.90%

57.80%

60.00%

61.10%

60.20%

69.00%

68.60%

Class 2

19,479

18,099

19,929

24,307

25,371

25,678

27,092

28,342

29,131

30,975

33,273

Single-family Residential Suburban

41.30%

40.90%

39.90%

40.6%

41.80%

37.00%

35.10%

34.20%

34.90%

26.20%

27.50%

Class 3

119

113

108

149

174

192

186

205

206

878

677

Multi-family Residential

0.30%

0.30%

0.20%

0.20%

0.30%

0.30%

0.20%

0.20%

0.20%

0.74%

0.56%

Class 4

887

917

1,033

1,090

1,121

1,279

1,376

1,413

1,469

2,340

1,569

Commercial and Industrial

1.90%

2.10%

2.10%

1.80%

1.80%

1.80%

1.80%

1.70%

1.80%

2.00%

1.30%

Class 5

1,024

1,072

1,307

1,470

1,606

1,789

1,888

1,969

1,998

1,997

2,076

Agricultural 20-100 acres

2.20%

2.40%

2.60%

2.50%

2.60%

2.60%

2.40%

2.40%

2.40%

1.70%

1.71%

Class 6

199

186

259

297

336

351

374

351

365

361

352

Agricultural over 100 acres

0.40%

0.40%

0.50%

0.50%

0.60%

0.50%

0.50%

0.40%

0.40%

0.31%

0.29%

Total

47,183

44,218

49,976

59,940

60,766

69,422

77,265

82,933

83,372

118,061

120,843

 

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Class 5+6 Total

1,223

1,258

1,566

1,767

1,942

2,140

2,262

2,320

2,363

2,358

2,428

 

2.60%

2.80%

3.10%

2.90%

3.20%

3.10%

2.90%

2.80%

2.80%

1.90%

2.00%

In 2018, the Virginia Department of Taxation provided localities additional training on property class classifications, clarifying classification standards for single-family residential urban (Class 1) and single-family residential suburban (Class 2). As a result, gradual and steady increases in transaction volumes observed from 2010 to 2018 were less predictable for 2019 and 2020 as localities made adjustments to their reported property classifications.

6 These values represent the original data from the 2010-2020 Virginia Assessment/Sales Ratio Studies. Percentages indicate the percentage of total sales for each year.

Summary and Conclusions

This historical look at arm’s-length transactions of agricultural and undeveloped land in the Commonwealth is a rearview mirror perspective of market values and is not a forecast of future land market conditions. The data showed that from 2019 to 2020, Virginia’s agricultural land increased in value and transaction volume, yet the cumulative acreage of land sold across the state declined. Agricultural land sales consistently accounted for a small share of total land transactions in the Commonwealth. Most agricultural land sales conveyed between 20 and 100 acres (Class 5), a conclusion also drawn from the 2018 Report.

References

Hellerstein, D., D. Vilorio, and M. Ribaudo, eds. 2019. Agricultural Resources and Environmental Indicators, 2019.

U.S. Department of Agriculture, Economic Research Service. No. 1476-2019-1679. https://www.ers.usda.gov/ publications/pub-details/?pubid=93025.

Kayser P., J. Friedel, N. Khanal, E. C. Davis, K. McGroddy, and R. Jacobs. 2022. “Agricultural Land Sales in Virginia.” VCE publication AAEC-294P. Virginia Cooperative Extension, Blacksburg. https://www.pubs.ext.vt.edu/AAEC/aaec-294/aaec-294.html.

USDA NASS (United States Department of Agriculture National Agricultural Statistics Service). 2018. County Data FAQs, “What are Districts?” Washington, D.C. https://www.nass.usda.gov/Data_and_Statistics/County_Data_ Files/Frequently_Asked_Questions/index.php#.

Virginia Department of Agriculture and Consumer Services. n.d. “Virginia Agriculture Facts and Figures.” Accessed May 2023. https://www.vdacs.virginia.gov/markets-and-finance-agriculture-facts-and-figures.shtml.


Virginia Cooperative Extension materials are available for public use, reprint, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Virginia Cooperative Extension is a partnership of Virginia Tech, Virginia State University, the U.S. Department of Agriculture, and local governments. Its programs and employment are open to all, regardless of age, color, disability, sex (including pregnancy), gender, gender identity, gender expression, genetic information, ethnicity or national origin, political affiliation, race, religion, sexual orientation, or military status, or any other basis protected by law.

Publication Date

April 3, 2024