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Veteran Advisor

Land Markets

Anyone know of a good tracking service for land prices in the midwest?

 

Seems like we are at the point we were in 1980 where a few months separated the $4000 per acre sales from the $1000 sales and maybe this time it is going to take a few years for the retracement, but I would bet it is coming.

 

Heard that a decent southern MN property no saled at $3800 per acre recently, and am watching a couple of WI online auctions of HEL land with some hours left to go, and the bid is at $550 per acre.

 

When the market is heading south, you have to be patient and wait, but eventually there comes a time to jump in, too. Probably a few years away from that point, though.

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36 Replies
Senior Contributor

Re: Land Markets

Two different mortgage providers told me just recently that land prices have declined by 15 % from the highs.We are awaiting an appraisal on my decease parents land. So we shall see.

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Honored Advisor

Re: Land Markets

There are alot of sources, the Farm Bureau, ProFarmers Landowner, Wallaces Farmer and Progressive Farmer have land sales sections, realtors send out newsletters of their past sales and what`s currently on the market.  And I`m always interested in the Iowa State land survey

 

http://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html

 

 

Probably the best source land prices is the "coffee shop" especially if there`s a banker or auctioneer in the klatch.  Smiley Happy  Because that`s instant information of what a farm brought and who bought it.   Not always accurate, but you get what you pay for.

 

I think interest rates are the thing to watch, I don`t know how they can go up, but in this topsy-turvy world that doesn`t mean that they won`t go up.  Right now in most places there are still more buyers than people that have to sell.  If things get bad enough that people start having to sell for cashflow purposes...lookout below!

 

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Senior Contributor

Re: Land Markets, just refer to Farmers National

and the USDA ( Both are pretty reliable on current and past land costs/prices ). i don't tend to buy your "fear theory" of supposedly real cheap or free land now. ( keep in mind if it gets cheap or free...Nobody wants, nor can afford it ...including perhaps yourself ). Southern land ( ie S and SW HighPlains land is higher this year say 5 to 15%....pretty decent moisture is a reason ) Midwest...Good Dirt is off maybe 7% this year...cheaper corn. ( depends on location...there's Midwest dirt that is fully steady with the past 2 years 2 ) SW thru CA to the Pacific and we're talkin pretty dry in spots....say up a touch. the outlying economy is pretty decent ( even "flat" or the current 2.5% gdp Up is decent ). folks just buying land. you provide the financing 2 and they might like that.
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Advisor

Re: Land Markets

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Senior Contributor

Re: Land Markets

No decrease in land prices " here ".  North Cent. Wi. BTO dairies are the driving force.

 

John

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Veteran Contributor

Re: Land Markets

Land here in central Iowa is still bringing pretty good money. 9-12 K for decent high quality land. Rents are still high too-a friend of mine talked to an investor that just bought a decent piece not a great piece of ground for 9200. My friend asked him what it would take to rent it thinking 265.00 - 300.00 should get it and the investor told him he was already offered 350.00. BA is right when interest rates rise we could see some pretty good pressure on land.

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Veteran Advisor

Re: Land Markets

Update on that $550 120 acre Wisconsin Farm....the bidding escalated to $1850 per acre on it, so no "steal" there at the close.

 

Yes, until interest rates get to go back to being subject to free market forces and not government fiat, there is going to be high priced land. That is why I take a long view and figure two to three years at the earliest and maybe five years even.

 

And as for wanting to "steal" something, that would occur with a sweetheart deal...say where you pressure the heirs of a farm not to put it on the open market, etc. Every farm I have ever purchased has either been at public auction, or private  bidding through a real estate agent or banker. Never have bought directly from an heir. So my bids are always greater than what anyone else would have paid.

 

Guys like me provide liquidity when the market is soft....some people talk smart but lack the ability to buy and don't provide any type of market bid when times get tough. When the market is high, I don't buy. That is just common sense.

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Veteran Advisor

Re: Land Markets

The lifting of interest rates will contain lots of remarks by members of the  ''' FED ''' policy board containing wisper remarks liken to a yo-yo although setting an substantial increase is straw talk coming out of the thresher blower tube ---  

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Veteran Advisor

Re: Land Markets

Good points, and one reason that I like to personally go to area land auctions is to see first hand what happened....so many times the rumours are just plain wrong.

 

The Iowa State article says that we are at a new price plateau ...with corn stabilizing in the high $3 range and soybeans in the low $10 range....bet a lot of farmers, myself included, would like to lock that "new price plateau" in right now.

 

$10,000 land locks you into needing $5-6 corn to make it a "smart" purchase....may be a few decades until the buyers talks smart about their high buck land.

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