Americans tend to have a good handle on how much their house is
worth. But what about the land it sits on? Or all the land in their
state?
Or, heck, how much is the continental U.S. really worth? A government
economist puts that figure, from sea to shining sea, at $22.98
trillion.
That’s William Larson’s estimate for the value of the 1.89 billion acres of land that accounts for the 48 contiguous states and the District of Columbia.
The dollar figure—equal to about 1.4 times last year’s gross domestic
product–represents only the value of the land, and not buildings, roads
or other improvements, and excludes bodies of water.
He also determined values for every state. California is worth the most at $3.9 trillion and Vermont is worth the least at a paltry $44 billion. On a per acre basis, New Jersey has the most valuable land at $196,410 an acre and Wyoming the least, $1,557 an acre.
Mr. Larson’s estimates, released this month in a paper from the Commerce Department’s Bureau of Economic Analysis,
aren’t meant to be a definitive measure. Rather they attempt to provide
baseline methods and estimates upon which further research can draw.
His estimates reflect the land’s value in 2009. Therefore it shows a post-recession figure (he says country’s value fell 24% from 2006 to 2009) and doesn’t account for the changes in value due to the shale-gas activity in the Midwest and elsewhere.
But with those caveats the paper reveals some interesting findings:
- The federal government owns 24% of all land, worth a collective $1.8 trillion. (That’s 8% of the country’s total value, or around 10% of the total outstanding federal debt.)
- Just 5.8% of U.S. land is developed, but that land accounts for 50.7% of the total value.
- Almost half, 47%, of U.S. land is used for agriculture.
- Besides New Jersey, three other states have land worth an average of at least $100,000 an acre: Rhode Island, Connecticut and Massachusetts. At least a quarter of the land in those four states is developed.
- Land in 24 states, including Wisconsin, Texas and Maine, is worth less than $10,000 an acre, on average.
- In Nebraska, 92.7% of land is used for agriculture, the most of any state.
- Nevada has the largest share of federal land, covering 86.8% of the state. Connecticut has the least, just 0.1% of the state’s area.
- Land in the nation’s capital is worth $1.05 million an acre and 18% of land in Washington, D.C., is owned by the federal government.
Developed land is typically sold in a bundle with buildings or structural improvements, and it can be difficult to disentangle the two.
Undeveloped land in rural areas can be even trickier to price because it’s not often bought and sold . For some federal land acquired in the Louisiana Purchase, the last transaction was in 1803, when the seller was a fellow named Napoleon.
“Land has long been recognized as a primary input in production and as a store of wealth,” wrote Mr. Larson, an economist at the Federal Housing Finance Agency. “Despite its fundamental role in nearly all economic activity, there is no current and complete estimate of the value of the land area of the United States.”
To calculate the value, Mr. Larson used satellite images to determine each type of land, including farms, forests and developments.
For undeveloped land he used comparable farm-land values to estimate prices. For developed land, he relied on estimates of land quality, home values and property attributes within a given Census tract. Based on his methods, Mr. Larson believes his values are correct within a 10% margin of error.
This post has been updated. Due to an error in the BEA paper, figures for the per-acre value of states were incorrect by a factor of 1,000. As a result, a previous version of the chart, “Sea to Shining Sea,” showed incorrect figures for the total value of land per state and the per-acre value.
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