For the first time in 80 years, fewer than half of American adults say they belong to a church, synagogue or mosque, according to a recent Gallup Poll. Combine that with the pandemic’s strain on church finances, and a slew of church properties are coming up for sale.

Tom Casazza, a real estate agent in the pricey Bay Area suburb of Walnut Creek, says showing a church to prospective buyers isn’t all that different from showing other properties in Walnut Creek.

He starts with the basics, like the square footage of the knave, the pastor’s office, the restrooms. In the case of this particular church, he also highlights special features, like the backlighting on the cross above the pulpit and the quiet room where parents can take noisy children and still hear the service.

“This church, it sells itself, it speaks for itself,” said Casazza, who has been involved in four church sales in the last couple years, after a career spent mostly in residential and commercial real estate.

The $1 million listing hasn’t sold itself quite yet. It’s been on the market for about a month, and zoning restrictions on what can replace the church complicate things.

Valuable land parcels

But Casazza expects it to move pretty quickly. In many parts of the country, the market for neighborhood churches is heating up. Valuable parcels of land in affluent suburbs don’t become available very often, and when they do, private developers line up.

And while some churches have lost too many members and need to sell, at the same time many nondenominational churches are growing rapidly, often in immigrant communities, and are looking for bigger digs.

“I would say [the church real estate market] is sizzling hot,” said Patrick Duggan, a reverend and director of the United Church of Christ’s Building & Loan Fund, which provides mortgages and other financing options for would-be church buyers.

There’s no church Zillow to provide comprehensive statistics on religious real estate trends. But the church properties have a lot in common with the housing and commercial real estate markets —including the need for curb appeal.

A church that looks like a church — and not part of an office park — is a big draw for congregations looking to expand.

Casazza’s listing in Walnut Creek, for instance, is a classic little white church, the type of place you might expect to see Laura Ingalls Wilder on a Sunday morning, only with central air conditioning. You can spot the steeple from the street.

“Visibility is an important factor for a church because you get members by people knowing you’re there,” said Barry Willbanks, a Northern California real estate agent who runs Churches4Sale.com. “If you’re tucked away in a quiet neighborhood someplace, a lot of people would never know you’re there.”

Nonprofit mortgage lenders

Churches looking to buy a new property typically take out a mortgage, just like homebuyers. But financing sources are somewhat limited. Smaller congregations looking to expand often rely on nonprofit Christian lenders like the United Church of Christ’s Building & Loan Fund, which does not restrict lending to any particular denomination. As a condition of accepting the loan, the church can’t sell the property to a secular buyer.

“It would be similar to what banks would call a character loan, except we’re looking at the character of the church, the personality and capacity of an institution,” Duggan said.

Mortgage interest rates, which right now are between 4% and 5%, generally track the commercial lending market. The final rate will also depend on the creditworthiness of the congregation, which can be a tricky thing to judge.

Duggan said he looks at three years of a church’s membership and donation trends, as well as the income and financial savvy of its lay leadership. Lenders want to see a diverse revenue stream, like municipal grants for homeless services or rental income from a day care center.

The person behind the pulpit is also important.

Signs of stability

“We look at how long has your pastor been there, that’s an important factor,” Duggan said. “The longer they’ve been there, that tends to be a sign of stability.”

As for the sellers, they often try to rent out their facilities to other churches before they turn to the market. That’s what Kimberly McBride, treasurer for the Fairfield Presbyterian Church, tried at first. She grew up going to Sunday school at the church and remembers when the 6-acre campus in this smallish Northern California city used to host thousands of churchgoers. Now it’s down to about 20 members.

“It’s hard for me to see how small we’ve gotten, and to get to this point where we couldn’t make the payments anymore, we couldn’t manage the property anymore, we couldn’t do the maintenance anymore,” McBride said.

She eventually found a buyer in BayNorth Church of Christ, a growing congregation with a more diverse membership. They’re in escrow now, in a kind of lease-to-own arrangement.

As a condition of the deal — and to set it apart — Rev. Sam Morris, BayNorth’s pastor, insisted that the remaining members of McBride’s Presbyterian congregation be able to worship on the property. 

“I laid that deal out in front of them, and they told me, ‘We never heard anybody tell us that they won’t buy it if we don’t stay,'” said Morris.

When the sale is completed, the proceeds will go to the regional chapter of the national church, which will decide how to use them.