"i am assuming the formal appraisal would be higher on the house on 4 acres, than on the house in a neighborhood, right?"

No, that is not right.

You could say that a house and four acres will appraise for an amount higher than house next door on a quarter acre, all other things being equal. Put that quarter acre on a lake and it may again outperform the four acres that are not on a lake.

Put the four acres in a remote area and the quarter acre in a desirable location and the quarter acre will be worth more.

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You can get a general idea of the premium by looking at the price of acreage in your location.

That makes sense.

so if vacant land in my area goes for say $20K per acre, then i can at least somewhat safely assume the 4 acres on which a house sits adds about $80k to the value of the house itself ( as long as the acreage has the same desirable characteristics and location of the average acre going for $20K has)?

not buying or selling now 😀 but hoping to buy some acreage with a house on it when i retire in several years!

There is no blanket rule and you know what ’assume’ means. Lots and lots of variables for land appraisals.

so if vacant land in my area goes for say $20K per acre, then i can at least somewhat safely assume the 4 acres on which a house sits adds about $80k to the value of the house itself ( as long as the acreage has the same desirable characteristics and location of the average acre going for $20K has)?

I would not say "at least," I would say "around."

There are generally four factors that effect the land's value.

(1) Improved land is more valuable, so land that has utility infrastructure on it is more valuable than that same land without the utility infrastructure.

(2) Separable and buildable land is more valuable than non-separable or non-buildable land. In my home area, there is a farming preservation ordinance that requires 10 acres to build a new home. You don't have to have 10 acres to sell a home, only to build it. So a 9 acre plot is worth significantly less per acre than that same land would be with one more acre.

(3) Land gets a premium for having a nice house built on it. People who don't want to go through the trouble of building a house are willing to pay extra for a home that is already built.

(4) Land gets a discount for having a house built on it. People who are interested in building a house will discount land improved by a house because they want to build their own.

Numbers 3 and 4 above, work against each other. So the answer to your question becomes specific to the market in your area. In my area, land is readily available and so built houses get a premium, but in many areas (especially metropolitan areas), that reverses so that good plots without a home are worth more.

As long as your land is separable and buildable you can get a good idea of the premium on the appraisal as the per acre amount of other land.

To get the best idea of what the price would be for a house with 4ac. You would need to look at other similar houses with around 4 acres and in close proximity to each other. That proximity will vary based on the area. I'm rural so 5 miles doesn't always work around here.

Whew! lots of variables to consider i guess! thank you for all the responses

Is this a property that you are considering? Or is it just a chat?

I wanna live in a place that sells $20k acres 🤪.

A friend of mine is moving soon to the city/state i am interested in moving to in a few years when i retire. she bought a house in a neighborhood. my DH and i would prefer a house just like hers but on several acres. there’s nothing like that for sale now there and i just got to wondering how much more her house would be on a lot of several acres in a ”good” location.

of course, i know A LOT will probably change with the real estate market by the time i retire…

"I wanna live in a place that sells $20k acres"

The average value of U.S. farmland was $3,400 in 2021. There are a lot of places where $20,000 per acre is a premium price.

There several major metropolitan areas where land is around that price only 20 -30 minutes from downtown.

One thing that MA has gotten right is to get out of the games people play with assessments most places. Here the assessor, by state law, does their best to assess the property at the current market price, without any games or exclusions and taking into account all factors that go into pricing a property. They seem pretty darn good at it, I seldom see an actual sale that differs by as much as 5% from the assessed value.

Adjustments and subsidies, eg for preserving agricultural land, are done pretty transparently at the tax rate stage rather than by jimmying the assessment, so properties are assessed based on what they could be sold for, but then taxed at a much lower rate if they are used for agriculture or with conservation easements.

I am not sure where assessment came into this conversation. The average cost of farm acreage actually sold in 2021 was $4,420. The farmland value is weighted from actual discounted cash flows and not assessments.

Commuter land in Ohio, Tennessee, Kentucky, Indiana, Georgia, the Carolinas, etc., regularly sells under $20k an acre.

I can get you 10 acres that are less than 30 minutes from downtown Louisville or Cincinnati for less than $200,000. Land is not that expensive in most of the U.S.

Here in the Missouri/Nebraska/Iowa area in spring 2022, the price of farmland is soaring. There are farms selling in excess of $10,000/acre. Land only - no buildings. This puts an average-sized farm of 300 acres at $3 million. My son is a loan officer and I know these figures are correct. DH’s best friend has a large farming operation and he just added another farm to his holdings - that purchase, closed last month, was $12 million.

I mention this as an illustration of our current market; it’s just crazy and I don’t believe it’s sustainable over the long term. Especially since interest rates are rising.

Farm loans and values have little to do with the current real estate market.

Farm land is valued by discounting the future profits of its crop yield. The discount rate is chosen based on the type of farm, with dairy farms having the highest discount rates as they require the most work.

There is some small market adjustment allowed for buildings, access to water, etc.

None of this changes the fact that in most of the US rural land is less than $20,000 an acre. Whether it is $4,000 an acre or $10,000 an acre doesn't really matter as the point was cheaper than $20,000 per acre.

Of course, bry, I wasn’t suggesting the OP purchase prime farm land on which to build a house. I was just illustrating how crazy the real estate market has become, even in comparison to the rates quoted in a post above mine for 2021.

I think it depends on how you read it. Less than 20K for an acre or less than 20K per acre.

Acreage prices also varies depending on the amount of acreage. In my area the groupings of prices roughly falls in these categories and in each category the price per acre goes down so the price per acre in the 10-25 acre category may be $20K/acre whereas the 25-50 acres category may be 15K/acre.

<0.5 acres - regular lot

0.5-5 acres

5-10 acres

10-25 acres

25-50 acres

50-100 acres

100+ acres