What’s the difference between nearly $8,000 an acre and $2,000 an acre? Location, location, location. That, and possibly a property’s proximity to the thickest part of the gas-rich Marcellus Shale.
It’s only speculation, but properties located close to the border with Pennsylvania that include mineral rights may be selling for more at auction. Broome County grossed about $916,000 on about 80 foreclosed properties seized for back taxes and auctioned off on Saturday,
About 181 people showed up to look for good buys at the auction. One thing appears clear: Properties up to 5 acres include gas and mineral rights, and they may be selling for more money if they lie along the Pennsylvania line.
A 3-acre parcel with mineral rights in the Town of Binghamton on Saturday sold for $23,000, or just under $8,000 an acre. The price per acre is definitely up in locations that speculators are seeking gas leasing rights to.
Compare that to the $2,000 an acre on a 7-acre piece of property in the Town of Colesville, which didn’t include mineral rights.
The difference in price based on location is a trend that erupted with the Great Natural Gas Boom.
The Marcellus Shale is thickest — and potentially more lucrative — along the New York border with Pennsylvania. The shale formation is the largest natural gas deposit in the nation. It’s being tapped in Pennsylvania and West Virginia. However, drilling in the shale in New York is on hold while regulations are drawn up to govern hydraulic fracturing in horizontal drilling.
The size of the property also plays a role in its value.
Mineral rights on foreclosed properties that are more than 5 acres stay with Broome County. That’s a policy set by the Broome County legislature last year to retain mineral rights — and potential royalties — on larger parcels of property for county coffers, when and if drilling begins in New York.
Land that doesn’t appear to be worth much now may generate cash from energy companies in the future. Some of Saturday’s buyers were hoping that will be the case.
Others were just looking for a bargain.
Kellie M. Place “The Land Expert”
“Upstate New York’s Real Estate Development Expert”
Century 21 Chesser Realty