Why Is Land in Lancaster, Pennsylvania, So Cheap?

Land values are influenced by economic, geographic, and demographic factors that shape supply and demand. Understanding these forces is essential when examining land affordability in locations like Lancaster, Pennsylvania. The local economy, physical land availability, and proximity to population centers all contribute to market pricing.

Economic Factors Affecting Affordability

Lancaster County’s diverse economy, encompassing agriculture, healthcare, education, professional services, and transportation, influences land prices. While agriculture is foundational, wage structures across these industries impact land and real estate affordability.

In 2023, Lancaster County’s median household income was $83,703, higher than state and national averages. However, salaries in some professional fields and for manufacturing workers (averaging $17 per hour) can be lower than broader averages. These wage differentials limit buyer capacity, influencing land demand and pricing.

Job growth rates also shape land values. From 2010 to 2022, total jobs in Lancaster County increased by 20%, below the national average but above Pennsylvania’s. More recently, 2022-2023 growth was 0.9%, lagging state and national rates. This subdued growth tempers demand for housing and development land, contributing to more stable land valuations.

The local economy is characterized by small and medium-sized businesses; in 2021, nearly half employed one to four people. This distribution, combined with wage structures, suggests a steady economic environment. Consequently, purchasing power for large land acquisitions may not be as robust as in areas with a higher concentration of high-wage industries, which helps keep land prices from escalating sharply.

Land Availability and Use

Lancaster County’s physical land supply and predominant use significantly shape its market value. A substantial portion is dedicated to agriculture, making it one of the most productive non-irrigated farming counties in the U.S. This agricultural dominance means much land is not available for immediate development, yet creates a perception of abundance.

Agricultural preservation programs maintain this land use pattern. The Pennsylvania Agricultural Conservation Easement Purchase Program, established in 1988, allows governments to purchase conservation easements from farmers. These easements permanently restrict non-agricultural development, ensuring continued farming. Lancaster County leads the nation in permanently preserved farmland, with over 115,238 acres across 1,539 farms preserved as of 2021, representing roughly 19% of the county’s total land area.

These preservation efforts limit land available for other development. Even with much land preserved, the volume of agricultural land creates a perception of ample undeveloped space. This influences prices for developable parcels, as the market is not as constrained by scarcity as in regions with less agricultural land or fewer preservation initiatives.

Development patterns within the county are more compact, particularly in designated urban and village growth areas. This approach accommodates population growth while protecting agricultural and natural areas. Concentrated development reduces sprawl, alleviating pressure on open lands. This strategy ensures much of the county’s acreage remains agricultural, influencing land supply dynamics and pricing.

Proximity to Major Urban Centers

Lancaster’s geographic relationship to larger metropolitan areas influences its land values. The county is within reasonable driving distance of major economic hubs like Philadelphia, Baltimore, Harrisburg, and New York City. Philadelphia is 65 to 79 miles away (1.5 to 1.65 hours driving), and Baltimore is 66 to 77 miles distant (1.5 to 1.67 hours driving).

Harrisburg is closer, at 39 to 40 miles (45-46 minutes driving). New York City is 153 to 163 miles away (2.75 to 3 hours driving). While commuting is feasible for some, the daily travel to these larger cities is a consideration for those seeking extensive employment and urban amenities.

Lancaster’s appeal often stems from its semi-rural character, open spaces, and slower pace of life, offering an alternative to metropolitan living. This preference for a tranquil setting can translate to lower land values compared to areas directly adjacent to major cities, where demand is higher due to immediate proximity to jobs, cultural attractions, and services.

While Lancaster benefits from connectivity to these centers, it does not experience the intense development pressure of suburban rings of megacities. The slight distance acts as a natural buffer, preventing land prices from escalating to levels seen in tightly integrated commuter towns. This balance helps maintain a market perceived as more affordable for land acquisition.