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Author: Stephen Ferrandi

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Four Elements of Value for Residential Land in Anne Arundel County Maryland

Four Elements of Value for Residential Land in Anne Arundel County


As a professional land broker who has sold more than $400 million worth of land for development and much of it in Anne Arundel County, Maryland I’d like to explain the four elements the bring value to a parcel of residential land in Anne Arundel County.

Anne Arundel County is one of the oddest counties that I’ve ever brokered land. In most other counties different types and prices of houses fit together like puzzle pieces -  higher price homes over here, lower price houses in this corner, older townhomes in that not so nice neighborhood in the middle, the fancy waterfront property along the side.  Not so in Anne Arundel County.  In parts of Pasadena one will see waterfront homes selling in the low seven  six figures immediately next to older homes that on a good day might sell for little more than a hundred thousand dollars. In Severn, I sold a large parcel of land where single family homes are selling in the $600,000 range and the property next to it contains more than 100 moderate rental townhomes. Throughout Anne Arundel County one can find McMansions next to seventy year old cape cods and turn of the century farmhouses.

Location doesn’t seem to have as much impact on value in Anne Arundel County as it does in most other counties.  That’s not to say it doesn’t have any impact, its impact is just tempered by other variables.


Schools - What school district a given property is in has a huge impact on value.  Customers are willing to pay a premium to be in the Severna Park, South Rivera or Broadneck high school service areas which in turn increases the land value for lots or subdivisions capable of servicing this need. Land that is serviced by the top schools is substantially more valuable than land that services lesser schools in Anne Arundel County.  The problem is school capacity.  Many of the top schools are at their maximum seating capacity as determined by the county school board which releases a capacity chart each July.  If any school – elementary, middle or high is over capacity, then a potential subdivision is unable to proceed through the subdivision process until capacity is restored or six years, which is ever sooner.  This means to the average landowner your land may take many years to go to settlement if your property is encumbered by a school moratorium. This is not to say that there aren’t seats available in the schools throughout the county, many schools are actually significantly under capacity, but woe to the government official who suggest moving kids from overcrowded schools to less crowded ones.    





Zoning – Anne Arundel County uses a pretty straightward zoning classification system for residentially zoned land. Agriculturally zoned land which is all of the county beginning around Crownsville and extending south to Calvert County permits one house per twenty acres. R-1 permits one house per 40,000 square feet unless it is on septic in which case an additional “septic reserve area” of 40,000 square feet for each lot.  R-2 permits one house per 20,000 square feet or two single family houses per acre.  R-5 permits townhouses at a density of


Water Frontage & Access – Anne Arundel County from Bayberry to Galesville has more waterfront property than almost any other county in the United States. Because Anne Arundel County is serviced by several major highway networks it has become very desirable for folks working in both the Washington and Baltimore metropolitan areas. 


Market Overview - What happened in 2013

Market Over - What Happened in 2013  edit

Market Overview - What happened in 2013

The Residential Land Market Metropolitan Baltimore/Washington in recovery if your selling lots, not so much if all you have is un-entitled dirt. 

The residential land market in the greater Washington-Baltimore area showed signs of recovery in the spring, as national homebuilders, such as Lennar, Richmond American, and NVR, loaded up on inventory of engineered and finished lots.  The first phase of this land grab actually began in 2011, as a number of builders started purchasing defaulted subdivisions from area lenders such, as M&T and PNC.  Once all of the low hanging fruit had been acquired for pennies on the dollar, builders began to seek new opportunities from land developers and smaller homebuilders who had projects that they had shelved during the Great Recession.  Much of the builder activity we saw is 2013 resulted from the acquisition projects that had finally obtained record plat or had been previously-stalled projects.

Raw unimproved land is still proving to be difficult to sell outside of Montgomery, Howard, and Anne Arundel Counties.  Many nationals have not ramped up their land development departments to pre-recession staffing and are simply not able to handle the in-house processing of more than a handful of unentitled land projects.  In an effort to continue to feed the pipeline, the nationals and many smaller homebuilders are turning to local land development firms to do the “dirty” work for them.   However, the challenge that land development firms are experiencing is a lack of working capital.  So many of the developer-friendly community banks, such as Key Bank, Bradford Federal, Bank of Annapolis, and Carrollton Bank, have been acquired in the last several years by larger banks.  Because the larger banks have been burned by bad land loans, they are disinclined to lend to developers with the same generous approach that the smaller banks had historically adopted for their long-term, valued clients.   

Looking for new funding sources, many local developers are partnering with high-net-worth individuals or entering into joint ventures with venture capital groups.  While the new funding sources help solve the problem of a lack of working capital, the also create a new obstacle:  for assuming the risk, the sources also take a huge bite out of the developer’s profit. 

While the overall lack of funding has opened up opportunities for cash-ready investors, it also continues to suppress raw land values:  There is still a substantial number of would-be buyers forced to remain on the sidelines for lack of working capital – traditional or otherwise – thus land continues to remain unsold, which keeps prices from increasing.  

In addition to many buyers sitting out the season, lower land values on all but the best parcels have kept many potential sellers (some of whom are still wearing pre-recession beer googles) inclined to remain on the sidelines, waiting for land values to rise.  With potential land sellers continuing to hold their properties, autumn 2013 offered a palpable slowing in the land market:  With much of the existing inventory under contract and builders disinclined to purchase raw land, the land acquisition managers were unsure as to what they should buy for 2014 and beyond.

As for our land practice, we found that 2013 was a time to prepare for 2014.  All of the deals that settled this year were deals that we began in years prior.  We have continued to work with landowners who are preparing to sell by assisting them in taking their land through the subdivision process as a way to help them unlock value.  We continue to market our services to landowners considering selling their landholdings throughout Maryland.