Virginia’s diverse and vibrant economy includes substantial urban areas, but the dominant industry continues to be agriculture, which provides in excess of 300,000 jobs and adds over $50 billion annually to our economy.
Virginia has relied on agriculture from the time of the earliest colonists who cultivated food crops to feed their families. Eventually they adopted tobacco as a major cash crop, and in the 17th century introduced it to England in what was likely the first foreign market for this commodity. Today Virginia’s agricultural sector continues to be dominated by small farms 90 percent of which are owned and operated by individuals and families.
While farming draws people to seek country property, people move there for many other reasons as well. Owning acreage is a great way to assure privacy and a quieter way of life, and of course horse lovers flock to our area as do those who want to enjoy large gardens for themselves and/or to sell at local farmers markets throughout the state.
The interest in country living provides a continuing demand for farm and estate properties, and while this market was impacted by the recent recession, its popularity is rising as investors and others take advantage of favorable prices and historically low interest rates to purchase their own piece of our beautiful and historic area.
The Market for Farms and Estates
The farms and estates agents anticipate a good year and believe this market will continue to recover.
“The market has picked up quite a bit in the last two years,” said John Ince, Associate Broker with Nest Realty. However, Ince explained, the recovery is what he called “Charlottesville centric,” which means the areas closer to the city like Ivy or Route 20 are more active than the ones further out.
“There are some great properties on the market,” said Justin Wiley with Frank Hardy Inc. Realtors. He said interest is really picking up on larger estates, those over $1 million with 50 or more acres. He referenced the many more inquiries he has received lately stating that “it’s still a buyers’ market.” He added that there is currently more interest in farms than in estates, describing the former as larger tracts which are actually under agricultural use such as raising cattle, livestock, crops or hay.
Wiley described estates as properties with a significant house. Estate buyers are not necessarily counting on making income from the property as a farmer would. Estates may also have historic significance and be listed in the National Register of Historic Places. While there is some interest in these properties as well, Wiley described the market as slower than the one for farms.
Steve White, with Roy Wheeler Realty Co., agrees that land is where the interest is at the moment. “We have seen more activity with land in general over the last eight to twelve months than in the previous four to five years,” he said. He added that while there is still lots of inventory, prices have come down some as sellers become more realistic about what their property is actually worth.
As an example, he referenced a situation where a seller turned down an offer and refused a counter offer from the same buyer. Fortunately the buyer’s patience paid off when after a time, the seller had a change of heart and decided to accept the offer after all. “Negotiations today require more patience,” White said. However, when the parties are willing and able to negotiate, the sales are happening.
White said that some estate property is also selling stating that, “if the value and quality are there it will sell.” He cautioned that correct pricing is critical. “It doesn’t help to have too high a price on a property because no one will look at it,” he added.
Farms, Estates and Country Properties
Farms, estates and country properties are often lumped together into one category, although they can be very different.
Ince explained that many people who move to the country are looking for a particular lifestyle and this determines the kind of property they want. They may want mountain views, but especially like the idea of having their own personal view. Or their primary interest may be enjoying the privacy of having no nearby neighbors. “Water is an asset,” he said “such as a pond, stream or river.”
Sometimes it is the quality of the home that is critical. “We see more activity on an older home with character than with a newer property,” Ince said. He said that it doesn’t have to be a period home, a 1920’s Sears house may be of interest to buyers who are looking for unique features or floor plans.
Ince described the market for farms as “broader” than that for estates. He gave as an example a current listing which is a 50 acre farm in a hollow in Greene County on what he described as a “beautiful piece of land.” A place like this offers what he termed a “country lifestyle with lots of flexibility.”
In contrast to a farm or country home, Ince described an estate as a “period home on a hill such as you find in Keswick.”
Price and size can also be distinguishing features. Donna Patton, with Better Homes and Gardens Real Estate III, described an estate as having a house with at least 6,000 square feet, adding that while estates typically have price tags in the millions, some farms can be had for several hundred thousand.
Farms and Estates Buyers
The lure of Virginia’s farms and estates attracts buyers from everywhere.
“We see UVA alumni who have gone out and made their fortune but are still in love with Charlottesville who come back and buy a farm or estate property,” White said.
White described many of these buyers as retired, but some of them are younger as well. Many come from Northern Virginia and DC, but he has also worked with people from New York and as far away as LA.
Wiley described two typical rural property buyers. One group is local people who are already farming and who are expanding and needing an additional piece of property. Another group includes those who want to put money in land as a long term investment. These are often out of town investors who are not moving here and don’t want a large house. Instead they are diversifying their portfolio and putting money in land as a hedge against inflation. They like that this is still a buyers’ market and that money continues to be relatively cheap. “These buyers are very savvy about the per acre price of land,” he said.
Estate buyers are a little different group. While they come from all over, in Wiley’s experience they are primarily from the northeast. These are high-end buyers, although what he described as the very high end has not been as active as in the past. “It is the $1 million to $3 million market that is picking up,” he said. Many of these individuals are contemplating retirement or are already retired, and like the natural beauty and the freedom from congestion they have experienced in urban areas.
Ince estimates that 75 percent of his farms and estates buyers are from out of town. While the DC area is heavily represented in this group, he also sees people from Colorado, California and Florida. Many are people anticipating retirement who buy now and spend part of their time here with the idea of being full time eventually. “Most who have plans to be here in three years end up moving here permanently in one year instead,” he said.
It’s not all retirees who buy these properties, Ince explained. He recently worked with a young family that had two children and settled on a country property in Buckingham County. This was a couple who home school their kids and neither has a job requiring them to go into the office. “These buyers were able to make this move due to their ability to work virtually,” he said.
Marketing Farms and Estates
Compared to more conventional homes, farms and estates are larger and more complex. The marketing also must be more targeted as there are many fewer buyers who can afford these properties.
Ince stressed the need for a strong Internet presence when he said, “we need to do a knockout job marketing online.” One way they do that is with drone videos which give a great aerial view of the property. “They’re fabulous,” he said. At one point the FAA cracked down on the use of drones for this purpose stating that operators need a pilot’s license. However a bill was passed making it legal for REALTORS® to use drones for aerial photos.
White explained that Roy Wheeler Realty has teamed up with a marketing company for pictures of luxury properties, which he described as “spectacular.” His Internet marketing utilizes visual tours as well as interactive floor plans and aerial photography.
Wiley uses some print media but online marketing is increasingly important. “The more savvy buyers are looking online for properties so it is important to do everything possible to help them find my website,” he said.
Farms and estates lend themselves to conservation easements, which are legally binding agreements that continue at the sale or inheritance of the property. Their purpose is to conserve the land and protect resources such as migration routes or sources of water. The result is large areas that are guaranteed to remain country properties, assuring the continuation of this rural lifestyle.
“Conservation easements are still a great tool for brokers to use to show buyers the benefits of purchasing large tracts of land,” Wiley said. “Lots of people who aren’t from Virginia are not as familiar with conservation easements,” he continued and added that he has educated a lot of people about them.
He cited the importance of tax credits and explained that Virginia is one of only three states where the state tax credits can be sold to someone else. That means if the owner of the property can’t use them they still receive benefits from putting their land in an easement.
“The conservation easements protect the land and impact value,” White said. He cited the huge tax advantage property owners get when they put land in an easement like this, but at the same time, by definition, they limit subdivision even for family members. Ultimately this could mean that a multi-generational farm can’t stay in the family since the heirs may be forced to sell to assure that everyone receives their fair share of any inheritance.
If you want to move to the country, one of our area’s farms, estates or country properties may be just right for you. Call your agent now to take advantage of today’s very low interest rates and reasonable prices on these very special properties.
By Celeste M. Smucker PhD
Celeste Smucker is a writer, blogger and author who lives near Charlottesville.