BY DEBORAH RIDER ALLEN
SPECIAL CORRESPONDENT Richmond Times Dispatch
Sunday, April 2, 2006

Earl Parker bought 110 acres in Cumberland County and paid $478 an acre. The
year was 1979.   That same land would sell today for about $2,410 an acre, according
to the 2005 Virginia Landbase Report by Commonwealth Commercial Partners Inc.
in Richmond.

"I used [land purchases] as my investment and retirement plan, and it has worked
out well," said Parker, who retired from banking and insurance.
"With stocks and bonds, you can't go and kick the dirt," he said.
The land report tracks land sales of more than 100 acres in 27 Virginia
counties.

In 2004, sales were $157. 3 million. In 2005, they were $220.2 million.

Location, location, location

Bill Barnett, author of the report, recalls that rural land sold in the
mid-1970s for less than $200 an acre in Nottoway, Halifax and King William
counties.  In areas closer to Richmond, it sold for $350 an acre -- "and it did not
make a difference where it was," said Barnett, senior vice president and partner of
Commonwealth Commercial Partners.  "Now, in many cases, it is hard to find an acre
for under $1,000 or even $2,000."

Much of the dramatic increase in value has occurred over the past five years, he
said.  Keep in mind that the average price per acre, which can be skewed by a few high
or low sales, is only an index and not the way to figure the value of any single
piece of property, Barnett said.  Still, his annual report shows an unprecedented jump in
prices per acre over the past few years.

It also shows the number of sales rose to 258 in 2005 from 247 in 2004,
resulting in an even higher gross dollar volume.  For Jon Black, a farmer in Charles City
County, buying land to farm is a way of life.

"I do not buy land necessarily to sell it. We really bought it as a long-term
investment," said Black, who along with his father and brother own about 900
acres in Charles City. They grow corn, soybeans, wheat and cotton.
He took advantage of recent price escalations.

"I paid about $800 an acre for the first farm I bought in 1985. I sold it a year
ago for about $7,000 an acre," Black said. He maintained use of the land by
renting hunting and farming rights from the new owner.

Black's land has been profitable even when he didn't sell it -- or use it.
"The first piece of land I bought, I had several options [from other people] to
buy it. It was odd because I had that land for 15 years and about every three
years, someone would come by and offer me an option for two years.
"I had 135 acres and sold seven to the county for the road right of way. The
rest was option money and it paid for the land. So I had 125 acres left that
were paid for," said Black.

Some farmers will never sell, he said. But he will sell to buy a better parcel.
"I look at real estate as an investment and if I can find the right piece of
property, I would buy it in a heartbeat."

"It is a long, slow process but 15 to 20 years down the road, that land has made
all the payments," particularly if the land is farmed, leased or harvested for
timber. Plus, it can be sold at a tidy profit, Black said.

Parker, the Cumberland landowner, also purchased 50 acres in Powhatan County in
1974, 50 acres in King and Queen County in 1986 and another 94 acres in King and
Queen in 2000.  With the exception of 25 acres in King and Queen that was cleared
and rented for farming, the rest of his property is managed for timber. Forestry experts
helped him analyze his timber and replant for the future.

Rural land purchases can mean even bigger money if there is timber on the
property.  "I have sold and managed my properties for timber production so I have gotten
some income that helped pay for them," said Parker.

Land purchased for the intention of timber harvesting represented the largest
percentage, 38 percent, of all the rural land sold in 2005, according to the
Virginia Landbase Report.

Investment was the intended use for 31 percent of the 2005 rural land sales;
development was 18 percent and farming 9 percent.  The remaining 4 percent was for
estate, homestead, recreation, riverfront and other unspecified uses.

The rural hot spots around Richmond are Powhatan, New Kent and Caroline
counties, which will see the biggest changes in the near future from agriculture
to development, Barnett said.

"You can sum it up into roads, water and sewer," he said.  "As the values rise in an area
that now has road access and water and sewer,   then that spills over into rural property.
It has a ripple effect."

Barnett said no one is predicting a bubble. But the growth rate is expected to
slow.  "I do not think any market can maintain that rate of growth of value. That does
not mean it is not going to continue to grow, but not at the rate we saw in the
last couple of years."  That said, land is always a solid investment, he said. It holds its value,
even in a down economy.  "If we get into difficult economic times, the land base typically goes flat.
So it does not go up, but it does not go down."

Parker, who enjoys the wildlife and hunting on his properties, put walking
trails and four-wheel drive access on his land.  "I was always sitting at a desk and yearning to be
out on the farm. With these [properties] I go and spend time and feel good about walking
around on the land."

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