The Northern Pass debate was featured in the just arrived Yankee Magazine and brought me to think that there was some fodder for an article that might take a different look or at least discover another point of view based on a question I deal with all the time- What is land worth? As real estate professionals, one of our principle jobs is to provide pricing guidelines to clients who want to sell or buy properties and land. These guidelines are used to set asking prices and also to suggest offers for buyers. As with any business, the standard currency we use is dollars and cents. But is there another currency that might be placed on land? Another value?
Northern Pass is a highly charged topic here in New Hampshire, perhaps not so much here in the lakes region/central NH area, but certainly so in the North Country. A lot of those of us fortunate enough to have grown up here remember the lakes region as we now see the North Country-unspoiled and with a natural beauty unmatched anywhere. The growth in the Lakes Region was inevitable and unstoppable. With the opening of interstate 93 in the 60’s, we were only two hours from metropolitan Boston and its wealth and burgeoning population. The incredible natural beauty of our area and its accessibility to an affluent market created an unstoppable demand for vacation and waterfront homes. The undeveloped rural charm didn’t stand a chance against the development demand. We know looking back is futile, and being pragmatists, we welcome our new neighbors and the economic growth and dollars they brought with them.
To many of us the “North Country” is a euphemism for our past. When we pine for the old days, we can drive “North of the Notch” and still find the feel of the way it used to be. The unspoiled open tracts in our North Country are incredible and those folks who struggle to earn a living there are reminders of times past here- good and bad. The desire to preserve those qualities runs deep. Make no mistake; the North Country is a hard place to make a living. Economic pressures are difficult and I make no judgments as to the decision to sell their land or not.
My topic here is “What is the value of land?” Growing up here when farms were the norm and most everybody had a cow and a garden, I value open fields and undeveloped woods. Putting a dollar value on developed land is relatively straightforward. But what about the value of not seeing a power line running through and unspoiled wilderness? There is a mechanism that attempts to put dollar values on these called social cost accounting and I’ve studied it over time. This methodology is helpful in establishing values for views (or their loss), trees on boundary lines, and other quantifyable situations, but I feel it misses the point on larger scale concepts. One of the land owners cited in the Yankee article turned down four million dollars for his farm in Stewartstown. Is his farm worth $4,000,000? Obviously it was to Northern Pass, but not to him. A family I know well still farms in the town I grew up in and has constant financial pressure to maintain the operation. I asked them “why don’t you sell some land to ease the burden?” Their response was “then it would be ruined” To them their ties to the land owned by the family for generations was so strong that dollars and cents was not the currency they used in valuing their farm. The land is their legacy.
So, what’s the point? I would suggest that as you look to buy or sell property, you look at not just the standard transaction. What else is involved? Most property transactions are straightforward affairs and can be evaluated in dollars and cents, but others have an added element. Once a parcel is developed it becomes a commodity. It is then able to be priced and sold on the market like stocks and bonds, corn, and pig bellies. Undeveloped land has the aspect of being whole and unspoiled. Is the whole worth more than the sum of its parts? Many people believe so.
There are ways to preserve the state of property and still provide a return for it. Look into Conservation Easements; or if you are able, restrict the deed to limit development in the future. If you have the means, buy large undeveloped parcels and preserve them. Towns offer tax relief in the form of current use that can make holding larger parcel more economically feasible.
What is the value of land? To some it’s so many dollars an acre. To others it is beyond value.
Post By: Kim Cedarstrom Realtor / Consultant Roche Realty Group / Granite State Advisors. Contact Kim at: kcedarstrom@roche.g.corvida.com
Kim Cedarstrom is a licensed residential/commercial Realtor© and consultant and a principal in the Real Estate consulting firm GraniteState Advisors. After having spent a lifetime founding, operating, and selling businesses in the Lakes Region of New Hampshire, he now offers a lakefront/residential real estate practice as well as commercial property and business sales services. Kim can be reached at kcedarstrom@roche.g.corvida.com or directly at 603-520-6609. Initial client conferences are always free of charge
