The red-hot real estate market, which began in early 2020 with the Covid-19 outbreak and was further spurred by social, political, and economic forces in 2021, has come to an end. This highly compressed market cycle resulted in record prices and sales volume through 2021. In 2022, we saw increasingly depleted inventory, for which buyers competed at a diminishing rate as the year progressed.
Declining economic conditions and rising interest rates have adversely affected buyer sentiment. Buyer urgency has retreated, as have value assessments. Sellers are reluctant to bring properties to the market in the current environment. The result is a largely “wait and see” attitude on both sides of land transactions.
The highly anticipated market crest came later than expected, which resulted in 2022 being another exceptionally strong year in the land market. Our year-end records will reflect that 2022 was the highest sales volume that we have experienced, except for 2021. To put 2021 into perspective, it was nearly double any previous year. Given the challenges of severely limited inventory and record price points in every geographic market, we were very pleased to serve our many customers and see the end results in 2022.
A few primary contributors drove the market this year. First, we saw tremendous strength in geographies that received less press or publicity than some of the “hotter” markets in 2021. The Great Plains was a leader as buyers shifted away from higher price points and minimal selection in the Rocky Mountain states. We saw Montana sellers and would-be mountain state buyers become purchasers of significant holdings in South Dakota and Nebraska. Our geographic diversity and partner collaboration proved instrumental in sourcing and executing sales in those areas.
Transaction size and volume in the southeastern states continue to grow as the retreat and recreational amenities of properties in those areas expand. Convenience and proximity to home are primary drivers for east coast-based owners. The challenges of air travel and, again, limited western inventory, have resulted in more people choosing properties closer to home that are easier to access and enjoy more often. We see great potential in the region with our expansion into Virginia.
The Rocky Mountain summer climate is no less appealing, even with travel being more challenging. Colorado’s available inventory of highly improved, turn-key mountain properties was gobbled up by buyers who wanted a move-in-ready property that they could enjoy immediately. Skyrocketing building prices and a two-to-three-year-long waiting list for reputable builders encouraged buyers to buy existing listings at a better value.
Our growing presence in Texas has been instrumental in producing Texas-sized sales like the late T. Boone Pickens’ Mesa Vista Ranch and sourcing buyers for Colorado and other mountain state properties. Our market-leading auction business, licensed in 29 states, produced tremendous results from La Panza Ranch in California to Clifton Farms in Virginia and many states in between.
Throughout the rapid market changes of 2022, we have been preparing for 2023. We have increased our marketing resources, broadening platforms and revamping messaging, which we look forward to unveiling in 2023. Adding personnel and expanding territories has further primed us for what we believe will be a more traditional and challenging market in 2023.
While the euphoric market of the last two years has been a boon for real estate companies, we welcome this more “normal” environment where our investments in relationships, experience, reach, and professionalism provides the greatest value to buyers and sellers. Serving our customers at the highest level in all our business lines- sales, auctions, lending, and management- has been our focus since 1946 and our aspirations and expectations grow in that regard every year.
Thank you to all our loyal customers and supporters. We look forward to another great year serving your needs.