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2024 Annual Ranch Real Estate Market Recap – A Look Back and Forward

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By Live Water Properties Staff

John Merritt

COO/Broker John Merritt

As we flip the calendar to a new year, it’s a natural time to reflect on the past year’s ranch real estate market and to look toward the future.

“The word that I think best describes the ranch real estate market trend that began in 2023—and I anticipate will continue to 2024—is ‘normalization,’” says COO/Broker John Merritt, who is based at Live Water Properties’ headquarters in Jackson Hole, Wyoming. “We’ve seen a pullback from the unforeseen COVID-driven market frenzy of 2020 through 2021.”

“Of course, the ranch real estate market is subject to ups and downs, so regardless of the environment, we do our best work for our clients, so they—and we—will succeed.”

Doing their best work year in and year out explains why the team at Live Water Properties closed many significant transactions involving some of the top properties in the Mountain West despite the market transition.  The less-than-comprehensive list includes the 2,640± acre Sweetwater Ranch in Eagle/Vail, Colorado; the 2,074± acre Golden Eagle Ranch in Iliff, Colorado; and the 15,040± Crossed Arrows Ranch in Lusk, Wyoming. The notable list extends to ranches such as the 318.83± acre Travis Teton Ranch in Alta, Wyoming, and the 48.49± acre Heartwood at Crescent H Ranch in Jackson Hole, Wyoming, that encompass fewer acres but still command top dollar at $18.95 million.

Accredited Rural Appraiser Andrew Rahn

Accredited Rural Appraiser Andrew Rahn

Next door in Montana, Andrew Rahn, Accredited Rural Appraiser (ARA) and founder of Montana Land Source, opted for the “recovery” to describe what he witnessed in 2023. In comparison, Rahn characterized the Montana land market in 2021 – 2022 as “blistering.” Sales volume exploded, as did prices. In 2021, as one example, the record for the highest price ever paid for a large legacy ranch in Montana was broken not once but twice.

“When I say ‘recovery,’ I mean that the market moved away from the unprecedented activity ignited by COVID and back to more historic norms,” says Rahn, who has been involved in rural real estate for 20 years and has formally been tracking listing statistics formally since 2013 when he founded Montana Land Source. “I’m curious to see how the market responds to all of the factors that are in play, particularly the historic lack of inventory we’re experiencing in Montana.”


The Rearview Mirror

Inventory, well actually the lack thereof, is a reality across the nation in the post-COVID era. According to Rahn’s statistics, the inventory of Montana ranch properties of 200-plus acres has historically remained between 600 to 700 properties, with a lower number in the winter rising to a peak in the summer. At the end of 2022, the number fell below 300. In early January 2024, it was 330.

A smaller inventory translates into fewer transactions. According to Rahn, before 2020, the average number of transactions involving 200-plus acre properties averaged about 200 per year. In 2020, it rose to 300, while in 2021, it skyrocketed to 420. In 2022, the number of transactions was 265. While he is still calculating 2023’s numbers, he anticipates it will be between 175 and 200.

Merritt reports a similarly tight inventory.

“We’ve been talking about inventory for ten years because there are not that many properties on the market,” Merritt says. “COVID tightened the inventory even more.”

Since its inception, Live Water Properties has been a listing-driven business, Merritt notes. In 2023, though, that changed. For the first time, the majority (52 percent) of the firm’s transactions were on the buyer side of a deal.

“It’s a trend that I don’t see ending anytime soon,” Merritt says. “Many more people are enjoying their properties than selling them.”

The tight inventory also helped increase the number of off-market deals. While it’s not a new trend, off-market deals became prominent enough to merit recognition by Rahn and Merritt. For the first time, Rahn is considering conducting a survey of the Montana brokers he works with to determine what percentage of their business in 2023 was off-market.

Off-market deals are only one of the many reasons Merritt encourages potential buyers to find a reputable broker who is plugged into the land market where they are interested in purchasing.

“If I were a buyer today, I’d work with an established Broker,” Merritt says. “Otherwise, people are likely to miss many opportunities for places to purchase. These properties aren’t listed anywhere, but Brokers who are in the know can put the right seller with the right buyer.”

In 2023, Live Water Properties expanded its reach in the Southeast and established a presence Tennessee and Georgia. The team, which includes Bill Calton, Director of the Southeastern Market, and Associate Brokers Jon Callaghan and Davis Willis of the Peach State, are making immediate plans to represent Buyers and Sellers of Florida and Alabama Ranches. This trans-continental presence allows Southeastern residents who want to escape sweltering summers by having a mountain retreat and Mountain State residents who prefer not to contend with drifting snow to find excellent local representation within the same firm.

“The expansion will enable Live Water Properties to offer clients the best of both worlds in terms of seasonal living,” Merritt says. “From a business standpoint, different regions of the country rise and fall in popularity, so a strong permanent presence in different places allows us to geographically diversify our transaction base.”

Rising interest rates captured headlines, but the increase impacted ranch real estate more indirectly than many would suppose.

“Most of our clients do cash deals, so rising mortgage rates don’t affect the market directly, but it does affect the overall health and stability of the economy,” Merritt said. “Economic uncertainty affects our clients’ buying and selling decisions.”

Higher interest rates take away an option that savvy investors frequently use to their advantage.

“When interest rates were low, it wasn’t uncommon for buyers to purchase a property with cash and then mortgage that property at a low-interest rate and put their cash back to work for them in other high-yield investments,” Rahn said. “With high interest rates, that’s not a viable option.”

While ranch real estate in the Mountain West (and throughout the country) has proven to be a good investment, the financial benefits are generally accrued over time. In the short term, the benefits are intangibles, like creating good memories with friends. As interest rates have risen, people have more options for short-term financial gains.

“In the COVID frenzy, people wanted to invest in real property amidst the uncertainty,” Merritt said. “Now, with basic investments paying as much as 5 percent or more, people have more options to invest their money in the short-term.”

The Ranch Real Estate Market Crystal Ball

As 2024 unfurls, Merritt and Rahn expect the trends of 2023 to carry forward. Two major factors shaping the ranch real estate market will be economic uncertainty and inventory.

“Traditionally, presidential election years are slow because people take a wait-and-see attitude,” Merritt said. “This year, it appears that the presidential race could be more contentious and less predictable than most, and when that is combined with inflation and interest rates, it may be a prescription for the jitters.”

Inventory will continue to dominate discussions about rural and ranch real estate. In recent years, buyers have purchased property with the intention of creating a legacy or engaging in a long-term investment. Very few are being flipped back onto the market. Rahn said that the tight inventory has also forced some potential sellers to hold onto their property because they can’t locate a replacement property for a 1031 Exchange.

The upside of fewer properties in the marketplace is that each listing has the potential to get more buyer attention than it might when inventory is full.

“The good news is that an ‘average’ piece of property might be the best option right now for buyers because there are not that many properties to choose from,” Merritt said. “With that said, Buyers are becoming more sensitive to pricing than before, so the property price better reflect its true value, or no matter how many people look at it, no one may buy it.”

Today’s buyers are less urgent and more pragmatic than they were two or three years ago.

“Buyers are doing their research and sharpening their pencils,” Rahn said. “They are willing to pay true market value, but not wishful market value based on what happened during the COVID years.”

“In Montana, price corrections are greater and felt more strongly at the lower end of the market,” Rahn said.

“The large, top-of-the-line legacy ranches will always sell for top dollar regardless of the market, but the less desirable properties reflect the impact of a changing market more distinctly,” Rahn said. “The bottom of the market gets softer, and sellers need to understand that.”

“Just because that’s what you’re asking doesn’t mean that is what the land is worth,” Merritt said. “In this market, it is important that sellers don’t look into the rearview mirror and cling to the unsustainable trends of 2020 and 2021.”

Regardless of the year and the market and whether one is a buyer or seller, both men offer the same piece of advice: find an experienced, trustworthy ranch real estate Broker to develop a working relationship.

“It’s our business to know the land, its value, and our client’s needs and desires,” Merritt said. “A primary goal is helping put the right land in the right hands.”

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