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Rural Housing and Characteristics Impacting Value

The term “rural” has seen a definition shift when it comes to how the real estate market views properties. While there is no distinctive characteristic that makes a property “rural,” in the past the term may have been loosely tied to agricultural-based properties. In recent years, the perception of “rural” has broadened to also include residential housing.  This inclusion has forced many professionals in the agricultural industry to recognize that demand for housing, specifically those small acreage properties located outside of the city limits, has increased over the past few years.

Enhanced roadways and improved rural infrastructure allow for an easier commute to work.  The advent of remote work environment coupled with better internet access has also fueled an increase in demand for rural housing.  As you or your clients are looking to build or purchase their dream property with acreage, here are a few things appraisers are considering when comparing rural properties:


There are a lot of factors to consider when comparing rural properties beyond the obvious aesthetics. One of the pertinent questions to be addressed: is the property within a reasonable commuting distance to employment and cultural centers for the area? Generally speaking, quality,  style of construction  and price of materials tend to be higher when looking at rural properties closer to larger cities.

Another important factor in regards to location is how a neighboring or adjacent property could negatively affect the rural site due to noise, smell or traffic.  An example of this would be a house adjacent to a gravel pit.  This property would likely suffer from the fact there are multiple trucks going by throughout the day which increases traffic flow in addition to the noises associated with an operating quarry.


How do you get to the property? Rural properties are accessed in many ways. Examples can range from highways and public road access bordering the property to a documented cart way. If the ideal site is situated on a hill hundreds of feet from the nearest public access, it is possible that a driveway will have to be installed, likely adding a substantial cost to the overall cost of the building project. Alternatively, if a building site shares access with an adjacent land owner, it is paramount to confirm that the property has legal access to / from this adjoining property. In any case, it is important to verify that the property is suitable as a residential site and there is adequate access to the property.


Often times a specific county has a zoning ordinance that stipulates what uses are allowed that all property owners must adhere to.  Similar to the other aspects discussed, it is important to be aware of what the property is zoned and how the property can be used. Occasionally, a property owner may split acreage from a larger tract which could have implications on the building eligibility of that remaining or newly created parcel. Many counties have zoning ordinances in order to maintain and conserve agricultural land from high density development, so land with site eligibility to build is limited.


Does the style/type of your dream country home conform to other homes in the area?  Depending on the budget, there could be an unlimited number of options to select from when building a home. Overbuilding may be attractive from the perspective of the home owner at the time of construction, but consequently could come at a cost when selling the property.

Securing financing can be challenging for buyers in rural settings. The number of loan products and lenders for rural properties pales in comparison to urban areas.  Often times rural properties have tillable land, existing outbuildings, or other structures which generate a modest income stream to the owner.  Available financing is limited and can at times come at an additional cost whether it be through higher down-payment requirements, higher interest rates, shorter financing periods, higher fees, or a combination of all the above.

Besides size and quality, there are some unique construction types becoming more popular and prevalent across rural America. Pole built homes, often termed “Shomes” (Shed Homes) or “Shouses” (Shed Houses) are an example that comes to mind. “Shouses” are unique in the fact they offer some cost savings on a per square-foot basis compared to conventional houses, but may not be as appealing to the general market pool of buyers as they are still largely uncommon.

Production agriculture typically remains the major driver behind the economy in rural areas. However, an increase in remote working and advances in internet access provide the potential for rural growth, especially in areas surrounding large cities. As there continues to be a shortage of houses on the market and an increase in buyers’ purchasing power, many participants are turning their eyes to “rural” properties.

The appraisal staff at Compeer Financial are here to help with your rural appraisal needs. No two rural properties are alike, identifying the factors that differentiate a property from the market and distinguishing what factors influence the value of a property are paramount in determining the property’s value. Contact us if you are considering purchasing, selling or financing.



Certified Appraiser
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