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What affects land prices

The biggest difference in land value is where it is located.  Land near a city,  a resort, National Park, etc. will command a larger price than land in a common, rural town.  What I am addressing here are the differences in price in the same general area.

The basic ingredients to the relative value of land in the same area have to do with:

  • What is next door (a lake or a run down house, for example)
  • How does the land “feel”  (Have you even walked on a piece of land that just feels “right”?  I have.)
  • Views add value
  • Restrictions add value (if restrictions are important to you)
  • Roadside utilities
  • Easy access
  • Added amenities such as tennis courts add value to a neighborhood.
It really comes down to what is important to you, but more amenities increases the value, but only if they are of value to you.  A piece of land on a back road with no power and no view is worth much less than a lot that that is ready to build on.  But it comes down to what you want to do with the lot.  If you want a weekend getaway, you may not need electricity, or even the ability to drive to it in the winter.
Although views are great for resale value, if you are working on a limited budget, you may not need to pay for the added cost of a view.
In much of Maine, there are very few restrictions on what can be built on land.  If you are worried about what happens on the land next to yours, it may be worth paying extra for an area that has covenants.  Of course if you don’t want someone to tell you that you can’t have pigs in your back yard or you can’t have a mobile home on your lot, then it is important not to have restrictions.

It is amazing to see the difference prices for land in the same area.  In the past I have had land that was priced at priced under $30,000 for 4 or more acres and land that was price over $100,000 for less  than two acres – and they were in the same subdivision!  So why such a difference?  In this example the less expensive lot was on a town road with a limited building envelop (area in which you can build).  The other lot was in the center of the subdivision with exceptional views (Mount Washington, Norway Lake and rolling hills with farms marching off into the distance).  This is an extreme example, but it makes a point.

Generally, if you are not looking to buy a woodlot, the size of the lot has little to do with the value.  Even if you are looking for a woodlot, the value is more about how much wood is on it and what type and quality of the wood is.

There are subtle differences even within categories.  For example at Settlers Knoll I currently have  view lots within a few hundred yards of each other and they range from $75000 for 5 acres to $95,000 for 4 acres.  They all have the same restrictions, are on a paved private road  all have the same utilities.  The difference lies in the type of views and in one case, the lot has a well.  Also in that same subdivision, I have a 5.66 acre wooded lot for $39,000.  It all depends on what the lot has to offer and what your needs are.

If you have more questions about this, feel free to call me at 207 653-9955 or email me at Tom@LandMaine.com

 

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