How Are Land Prices Per Acre Determined?

Land prices per acre are determined by whether the land is rural or urban, where it is located within a general area, the type of zoning to which it is subject and whether it is family-friendly or not. Schools and crime rates also directly affect land value.

Land that can be developed for profit is more valuable, so parcels of land in urban areas are generally more valuable than in rural ones. However, both rural and urban areas have a wide range of development possibilities, so zoning is a large determinant of land value. There are many types of zoning classifications, and these range from residential to commercial.

Within every city or county, some ZIP codes are more desirable to residents than others. This desirability usually corresponds to the types of neighborhoods and houses in each ZIP code. In some cities, the ZIP code corresponding to the downtown area is the most expensive due to high-value housing, condos and high rises, whereas other cities have more expensive areas that correspond to wealthier residents, higher-quality school districts and lower crime rates. Lower-income areas tend to have higher crime rates and less desirable schools, which negatively affects the value of land per acre.