Evaluating the Utah Land Market

The Utah land market presents a unique landscape for investors, developers, and homeowners alike. With its diverse terrain ranging from arid deserts to alpine forests, Utah offers a variety of opportunities in raw land acquisition. According to the Utah Association of Realtors, the median price per acre for undeveloped land in Utah increased by 12% in 2023 compared to the previous year, reflecting growing demand. Interestingly, a report from the Utah Division of Water Resources indicates that approximately 65% of the state's developable land faces moderate to severe water scarcity issues, a critical factor for potential buyers to consider. The complexity of Utah's land market is further underscored by its unique ownership patterns. As detailed by the Utah Geospatial Resource Center, about 64% of Utah's land is federally owned, 10% is state-owned, and only 26% is privately held, creating a competitive environment for those seeking to invest in private land parcels.

Assessing Recent Utah Land Sales

Analyzing what comparable vacant land has recently sold for in the immediate area is crucial background research to undertake. While no two parcels are exactly alike, looking at the sales prices per acre for properties with similar acreage, zoning, utility access, road frontage and other attributes can establish a baseline for expectations.

Online sites like Zillow and Redfin offer some filtered search options to see empty land listings and sales near your target location in Utah. However, for more granular data beyond just sale price, reviewing county assessor records for specifics on each transaction is key. The assessor documents contain full legal descriptions, plot boundaries, tax values and more details upon request.

Reviewing County and Municipal Zoning Ordinances

The zoning designation for a land parcel dictates what can be built or developed on the site under local regulations. This directly impacts the highest and best use value potential. Before moving forward with any land purchase or listing pricing in Utah, verify zoning restrictions through the county or city planning department.

For example, land zoned as agricultural may only allow minimal housing and barn structures meant for farming use. Meanwhile, commercially zoned properties open up significantly more opportunities for retail, office or industrial buildings. And land with residential zoning may permit some combination of single-family homes, duplexes, apartments or condominiums depending on density allowances. What differs across counties and municipalities are the specific zoning classifications and permitted uses therein.

Evaluating Terrain and Buildability

The topography and general terrain of a land parcel also affects how the site can be utilized. Building becomes more complicated and expensive as slopes increase. And portions of the property that fall within flood zones or have wetlands may not qualify for development at all.

Inspecting the land in-person can reveal informative details on terrain. Also request elevation mapping, soil data or geotechnical surveys if available to evaluate stable locations, drainage issues and base load-bearing capacity for foundations. Environmentally sensitive areas must be considered as well before purchasing land in Utah.

Researching Access to Utilities

Land with ready access to electric, water, sewer and gas utility infrastructure provides convenience for future development plans. On the other hand, if no connections exist near the site boundaries, the costs to trench and pipe all utilities to the property can sometimes render projects nonviable. Checking with local utility providers on potential tie-in locations and the permitting process is prudent.

Be sure to research what type of utilities are located along the land parcel frontage and within any access easements crossing the site. Any limitations around power line capacity should be noted as well. And the locations of underground utilities like fiber internet lines may add value for certain buyers.

Analyzing Local Housing and Population Growth Trends

Vacant land often gets acquired for future residential or commercial construction to meet local development needs. Analyzing recent housing, business and population growth patterns in the area can hint at future demand. This ties closely into zoning allowances too.

For residential land, check building permit issuances over the past 1-5 years to see community expansion activity. Also look at census data projections and estimates for population changes in the county and neighborhood to gauge needs. For commercial land, check with the local municipality on business attraction efforts that signal investment potential. New roads, highways, rail lines or airports proposed nearby also bode well for land value boosts.

Securing Accurate Appraisals of Land Value

Even after conducting extensive research on all the above facets that can impact property valuations, professional appraisals should provide the most definitive market value assessments. Licensed appraisers apply their expertise of all the varying factors to provide land valuations that comply with industry standards.

Appraisal fees often range from $3,000-$5,000 for a thorough vacant land valuation report, but consider this a prudent investment. Appraisals required for financing purposes need to be completed by a certified appraiser anyway. But even for private land sales or purchases, soliciting 1-2 independent appraisals can validate asking and offer prices. Just be sure to vet appraiser qualifications and local market expertise first and foremost.

Establishing a Good List Price for Selling Land

When preparing to sell a vacant land parcel in Utah, use the recently collected data from sales comparisons, zoning research, appraisals and growth metrics to gauge pricing. List prices tend to situate somewhat above the highest expected market value, knowing that buyers will negotiate downwards. Common industry guidance suggests adding 10%-20% onto appraised values when pricing land for sale.

However, also factor in that the majority of vacant land parcels listed end up selling for around 70-80% of initial asking prices. Approaching this pricing strategy realistically while aligning expectations on typical buyer behaviors can lead to selling land more quickly.

Options for Selling Land Quickly in Utah

Beyond the traditional process of listing land with an agent which can take upwards of a year or more to sell in Utah, other options exist for those seeking to sell their land faster. Some options include:

Land Buying Companies

Companies like Land Boss that specialize in buying and selling land can be an alternative solution for quickly unloading vacant property contracted sales often close in as little as 30 days. Reputable land companies have funds readily available for buying real estate at discounted prices. Understanding your timeline and priorities during the land selling process helps assess what approach offers the best fit.

Auctions

Hiring an auction company to sell land can accelerate purchase opportunities to just a month or two. While pricing proves more variable, the competitive auction process attracts bids from investors and developers. Local auctioneers can handle setting up land auctions both in-person and online.

Wholesaling

Wholesaling entails securing a buyer for vacant land and then transferring the purchase contract directly to them for a small assignment fee upon closing. Real estate wholesalers actively pursue discounted land deals directly from sellers and then market them to pools of cash buyers at higher prices for the wholesaler fee, allowing deals to transact quickly.

Exchanges

Investors sometimes use Delaware Statutory Trust (DST) 1031 tax-deferred exchanges to sell their existing land while gained tax advantages. By rolling over profits into another “like-kind” real estate purchase, capital gains taxes get deferred in qualifying exchanges. This incentivizes quicker sales to promptly complete new DST property acquisitions within the allotted 180-day exchange periods.

Key Takeaways on Navigating the Utah Land Business

Between Utah's varied terrain and counties with their own zoning codes, wide-ranging factors determine land parcel values. Recent comparable sales, intended use potential, access to utilities and area growth outlooks all help assess market prices. Securing appraisals provides the most reliable valuation. And understanding options like land companies, auctions, wholesaling and exchanges can also facilitate faster land transactions for those aiming to sell more quickly. Doing thorough due diligence with both county records and experiential property inspections leads to optimal positioning among Utah’s stable land investment environment.

Frequently Asked Questions (FAQs)

What data sources should I check to assess land value in Utah? 

Some of the key sources are recent comparable land sales listings and transaction records in the county assessor's database, zoning ordinances through the county/city planning departments, terrain surveys and elevation maps, local utility providers for infrastructure access information, census & building permit data for growth trends, and professional appraisal reports.

How much does land typically sell for per acre in Utah? 

Land prices per acre vary greatly across Utah's 29 counties depending on zoning, utilities, road access, intended use factors and local market growth influencing demand. Rural lots can transact below $5k per acre whereas buildable residential land in high growth areas sells for $100k per acre or more.

Does it make sense to get land appraised before selling in Utah? 

Yes, professional appraisals from certified experts provide the best objective valuation on parcels to inform pricing. Expect to pay around $3k-$5k for thorough vacant land appraisals. Securing 1-2 independently prepared appraisals can substantiate appropriate listing prices.

How long does vacant land usually take to sell in Utah? 

Industry statistics track average marketing times for successfully selling land at typically over a year. Those urgent to sell faster may consider land buying companies making cash offers, auctions, wholesaling contracts to investors, or 1031 exchanges. But pricing tradeoffs often come with accelerated sales.

What are the main factors that can lower property valuations in Utah? 

Parcel attributes like steep slopes over 30 percent grade making building prohibitive, flood zone restrictions on constructability, lack of utility access requiring costlier connections, undesirable surrounding properties, outdated zoning limiting usages, and environmental constraints like wetlands can all decrease land valuations.

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