Expectations of land value in rural and suburban regions

Timberland has become a new and emerging asset class among investors. Institutional investors have committed large amounts of capital through the private equity market. Timber real estate investment trusts (REITs) have also allowed smaller individual investors to participate in the ownership in timberland. Given that land supply is fixed, the demand for land is expected to increase as baby boomers near retirement. Owners of timberland are faced with making strategic decisions as to whether timberland remains the highest and best use. Given these facts, this thesis examines over 300 predominately rural counties where timberland is harvested and attempts to create a model to identify where land has the highest value as an urban use, and secondly, where this urban land value is expected to experience the most appreciation. Using house prices as a proxy for land value, models for both house price and house price appreciation were developed. The results indicated that two variables were significant factors in forecasting appreciation: 1) the percentage of developed land within a county and 2) the percentage of seasonal units. As a result, urban counties with a lower percentage of seasonal units appreciated less, whereas rural counties with a higher percentage of seasonal units appreciated more. The results are significant in that it shows how there is an option growth effect for rural land beyond the urban edge which can potentially yield higher appreciation rates for speculative landowners.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Architecture.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2005

Author dc:creator

• Carlson, Dianna Marie

Advisor dc:contributor.advisor

• William C. Wheaton.

• Architecture.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/33196

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/33196