Evaluating the Oklahoma Land Market

The Oklahoma land market presents a dynamic landscape for investors, farmers, and developers alike. As of 2023, the average price of farmland in Oklahoma stood at $2,050 per acre, marking a 5.7% increase from the previous year, according to the USDA's Land Values Summary. This upward trend reflects the growing interest in Oklahoma's diverse land offerings, from fertile agricultural plots to expansive rangelands. The state's agricultural sector plays a significant role in its economy, with the 2017 Census of Agriculture reporting that Oklahoma boasts over 34 million acres of farmland across 78,531 farms. Notably, the average farm size in the state is 435 acres, indicating a mix of small family farms and larger commercial operations. These figures underscore the importance of a thorough evaluation of the Oklahoma land market for potential buyers and sellers navigating this complex terrain.

Economic Factors Impacting Land Values

Oklahoma’s economy includes substantial agriculture and fossil fuel production sectors. The state ranks fourth in the U.S. for beef cattle ranching. Major cattle producing regions include Osage County, a top U.S. County for calf production, and the Panhandle district bordering New Mexico and Colorado. Energy companies actively drill for petroleum and natural gas in central and western regions like the Anadarko Basin and Kingfisher County. These core industries directly influence market values for croplands, ranchlands and mineral-rich rural acreage.

Urban regions have diversified into sectors like aviation, finance, transportation, technology and healthcare. The Tulsa and Oklahoma City metro areas offer growing corporate job markets raising demand for peripheral housing developments. From 2010 to 2020, Oklahoma’s population grew nearly 10 percent to over four million residents. Positive job and population growth trends stimulate values for parcels near cities targeted for single-family neighborhoods, industrial parks and commercial buildings.

Understanding Local Land Use Regulations

When evaluating land in specific Oklahoma counties and towns, buyers must research local zoning and development codes dictating permitted property uses. For example, Grove, OK in Delaware County near Grand Lake has zoning overlay districts near waterfronts restricting lands to single family residentially usage with stipulations on lot coverage ratios and structure heights. Alternately, parcels in central Noble County fall under general agricultural zoning with allowance for ranching structures but prohibitions on concentrated animal feeding operations.

As another case, the Unified Development Code for Guthrie, OK in Logan County contains a Downtown Business District zone intended for mixed-use buildings and pedestrian shopping streets along with an Industrial district permitting manufacturing and warehousing structures. Complex matrices determine appropriate applications ranging from public parks to gas stations for each zone.

Municipal planners create land codes balancing preservation of rural character with needs for orderly expansion into undeveloped areas. Review processes for plat approvals and building permits regulate construction. Codes also impose impact fees on developers. Whether seeking farmland or a subdivision site, buyers must factor local ordinances into acquisition decisions and land value estimates.

Determining Fair Market Value for Land Parcels

Pinpointing the fair market value of a land parcel relies on appraising recent comparable sales, current listing prices and county tax assessments. For example, northern Oklahoma County and southern Logan County contain sales of undeveloped 20 acre agriculture-zoned tracts in the $250,000 to $275,000 range, whereas 5 acre residential lots near Chickasha in Grady County transact around $60,000 to $70,000 each.

Values fluctuate widely based on size, location, terrain, access, utilities, zoning designation and intended usage. Economic shifts also create volatility, as evidenced in Oklahoma’s boom and bust oil industry, which specifies valuation for drilling and fracking uses.

Farmland values rage from approximately $2,500 per acre in southeastern Oklahoma to $5,500 per acre in northcentral districts. Prices for ranch land by acreage start around $1,750 in western areas to nearly $3,500 in central and eastern tracts. Undeveloped residential acreage near regional hubs like Tulsa, Norman and Stillwater can list from $20,000 to $60,000 per acre depending on permitting factors and neighborhood comparables.

In transactions for vacant land, buyers may negotiate sales 15 to 25 percent below listing prices that represent desired valuations for patient sellers. Most owners initially overprice asks. Banks appraise land at amounts warranting loans equivalent to approximately 50 percent of estimates. Across Oklahoma's areas, determine valuation baselines from similar tracts before making offers.

Key Factors Impacting Land Values

When evaluating Oklahoma acreage, recognize market values depend on interrelated location, economic and regulatory variables. Prominent valuation factors include:

• Sale prices for recent trades of comparable vacant land parcels
• Proximity boosting housing/commercial demand from growing metro regions
• Access to transport infrastructure like highways and railroads
• Regionally abundant or declining industries driving local economy
• Job and wage growth reflecting area purchasing power
• Population changes signaling under/over-supply of housing
• Restrictiveness of local land use planning and zoning controls
• Permitting requirements and development costs adding risk
• Availability of grounds water, electricity to sites
• Site issues like flood zones and mineral rights
• Economic growth or recessionary trends

Selling Land Requires Patience and Effective Marketing

Oklahoma land owners attempting sales at full market value face obstacles like low demand for vacant acreage, limited buyer pools and volatile economic shifts. Even premium 20 acre tracts zoned for housing near surging job centers can take 12-24 months to transfer. Owners wanting fast sales often turn to investment firms like Land Boss that purchase parcels below market prices in exchange for quick cash closings.

Land Boss's offers account for the realities that marketing raw land demands substantial efforts through online listings, signage and agent commissions before locating interested home builders or developers in likely 6-12 month timeframes. While some view purchases below peak valuations as "low balls," Land Boss provides simpler fast sale solutions for owners prioritizing expedited liquidation over maximum profit.

Those with no urgency can enlist broker representation and promote land extensively to potential buyers willing to pay near the highest justifiable market prices.

Should You Invest in Oklahoma Land?

Benefits of Owning Oklahoma Land

Oklahoma offers stability for land owners through enduring industries like oil, gas, agriculture and ranching across widespread rural areas. The state economy historically withstands recessions well, limiting land value declines. Investors gain income potential from mineral rights leases to energy companies prevalent in western and central regions. Farmlands also see consistent crop production and grazing uses.

Oklahoma’s urban regions like Oklahoma City and Tulsa also undergo steady population and job growth, expanding housing demand. Land near these metro centers gains residential and commercial value over time. Owners can generate profits long-term by holding parcels for price appreciation then strategically selling to developers.

Factors to Consider Before Buying Land

While stability drives Oklahoma’s land market, values remain lower than many other states. Owners need longer investment time horizons for major valuation gains over 5-10 years. Stretches of gross production tax incentives and regulations changes also introduce market uncertainty.

Investors must carefully research county-specific conditions before acquiring parcels. Development limitations from zoning restrictions or inadequate access and utilities can hamper value. Performing due diligence with market analysis and appraisals prevents overpaying.

Oklahoma lands offer strong income potential from mineral rights and farming uses together with long-range development upside near growing urban markets. Investors benefit from stability but require research and patience to maximize returns.

Final Thoughts

The diverse Oklahoma land market presents opportunities but requires research into granular conditions driving values. Economic, regulatory, comparable, infrastructure and development factors combine to set market prices on a case-by-case basis. Understanding these dynamics allows buyers and sellers to evaluate parcels based on intended use. With patience and effective marketing, owners can negotiate transactions at optimal valuations over longer timeframes.

Frequently Asked Questions (FAQs)

What types of land are best for investment in Oklahoma?

The most desirable investment lands in Oklahoma include acreage outside major metro areas like Oklahoma City and Tulsa for future development, mineral-rich sites across western and central regions, and cropland and ranchland with long-term farm lease income potential.

What returns can I expect from investing in Oklahoma land?

Projected returns vary substantially based on location and usage ranging from 4-8% annually for appreciated farm values to 8-12% average gains on holdings flipped to developers after several years. Income from mineral rights and farm leases also factor in.

What risks does Oklahoma land investment entail?

Key risks include fluid oil and gas regulations, lower land values than many other states limiting upside, rezoning changes from local governments, high property tax rates, and periods of economic decline impacting agriculture and development viability for owners.

How much does vacant land cost per acre in Oklahoma?

Land prices range widely from $1,500 per acre for remote ranchlands to over $60,000 for tillable tracts to parcels above $100,000 for residential development near Oklahoma City and Tulsa. Research specific county norms.

Should I develop the land myself or sell to developers?

Most individual investors lack capital to themselves develop raw land at scale into housing subdivisions or commercial sites. Long holding periods with ultimately selling semi-improved parcels to large developers yields highest returns.

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