Vie for High Quality Farmland:
Average Values Up
An accelerated farmland sell-off at the end of 2012 has
led to continued low supplies of premium quality property, according to
Farmers National Company, the largest farmland and ranchland real estate
company in the country. Last year's rush, prompted by economic uncertainty
and tax law changes, continues to have an impact into 2013. High quality land
is still in demand, and buyers are competing for top acres that are currently
in short supply.
Competition for land has kept values strong, averaging 20
percent higher values over comparable land in 2012. Much of the continued
rise is due to auction activity driving sales prices as purchasers vie for
parcels of land. Mid- to high-quality properties are still seeing such rises
in value, while lower quality land values are staying steady.
"Values are still going up, but the pace has slowed
overall," said Derrick Volchoff, ALC, vice president of real estate
operations at Farmers National Company. "Many transactions for high quality
land are being sold via auction, which drives prices through competitive
Auctions today have turned very competitive with bidding
wars becoming the norm for high quality land sales. Areas of the country that
normally do not run auctions, such as the Delta region, are now seeing them
on a regular basis, according to Volchoff. "Despite an overall moderation in
the number of sales transactions since the end of last year, there has been
noticeable growth in the size of parcels being sold per purchase," said
Moving into the third quarter of 2013, Farmers National
Company expects the number of transactions being closed to increase, based on
activity seen in the past 60 days.
"During the first two quarters of 2013, there has been a
hiccup in activity based on the surge at 2012 year-end," said Volchoff.
"However, the trend seems to be shifting upward again and transaction numbers
for the balance of the year should remain relatively steady."
Investors are sticking with land as a safe, long-term
investment while farmers are putting cash from past yearly profits back into
operations. Built up cash reserves for farmers are prompting farm operators
to buy premium land when it becomes available to add to their inventory and
to accommodate the return of younger family members to farms. For both
groups, economic uncertainty is still driving purchase decisions. Farmers are
looking for premium land on which to expand, while investors may purchase
properties based on price and projected return on investments.
"Even with recent drops in crop size for farmers, profits
are still at a level higher than in 2010," said Volchoff. "Farm debt is still
low in relative historical terms."
to Volchoff, several issues in the U.S., such as healthcare and interest
rates are likely to impact economic trends and thus land inventory levels and
sales activity once they are resolved. The direction of market and political
issues will likely shape the rest of 2013. As the housing market improves,
developers will likely begin to buy land for development. This could trigger
more 1031 tax deferred exchanges pushing new money into the market.
reports of land values in your region and
read updates from our area sales managers.
RECENT LAND AUCTION RESULTS
• Lancaster County, Nebraska
• Pocahontas County, Iowa
• Hamilton County, Iowa
• Shelby County, Iowa
• Saunders County, Nebraska
For more details on our upcoming auctions, please click here to see our auction calendar.
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For real estate information about your
specific area, please contact:
Roger Hayworth, Area Sales Manager
for Ohio, Indiana, Illinois, Michigan, eastern Kentucky, and eastern Missouri
at 1-888-673-4919 or RHayworth@FarmersNational.com;
Sam Kain, ALC, GRI, ABRM,
Area Sales Manager for Iowa, Minnesota, Missouri, North Dakota, South Dakota
at 1-800-798-4509 or SKain@FarmersNational.com;
Terry Longtin, AFM, Area Sales Manager for
North Dakota and Northwest Minnesota at (701) 780-2828 or TLongtin@FarmersNational.com
J D Maxson, Area Sales Manager
for western Nebraska, portions of northwest Kansas, eastern Colorado, eastern
Wyoming, and southwest South Dakota at (308) 660-2100 or JMaxson@FarmersNational.com;
Keith Morris, ALC, GRI, Area
Sales Manager for the Mid-South states at (901) 494-5263 or KMorris@FarmersNational.com.
Monty Meusch, AFM. ALC. CAI. CES, Sales Manager for
Kansas, Missouri, Oklahoma, and Texas at (817) 600-9485 or MMeusch@FarmersNational.com.
Flo Sayre, ALC, Real Estate Broker for the Columbia Basin and Eastern
Washington state at (509) 544-8944 or FSayre@FarmersNational.com
Special Report: America's Top 30 Auction Houses
National Company was Rated the #1 Land Auction Company in 2012 and 2011 by
The Land Report -- The Magazine of the American Landowner
The Land Report
also rated Farmers National Company as a "Best Brokerage Company"
in 2012 and 2013
690.68± Acres • Miner County, South Dakota
Thursday, June 20, at 10:00 AM, at the Miner County 4-H
Exhibit Building in Howard.
farm offers a unique opportunity to purchase a combination of high quality
cropland, permanent native pasture/grass land, and CRP acres with contracts
expiring in 2014, 2015 and 2016. The tracts also feature recreational hunting
value. Tracts 2, 3 and 4 are adjoining but will sell as individual tracts. Tract
1 from Canova, South Dakota: go west three miles on 242 Street, then south on
432 Avenue one mile, then west on 243 Avenue one mile, to the northeast
corner of the farm on the south side of the road.
Tracts 2, 3 or 4 from Canova, South Dakota: go west on 242 Avenue eight miles
to SD Highway 25, then north on Highway 25 three miles to the southeast
corner of Tract 3. Tracts 2 and 4 are adjoining. Jeff Obrecht, Auctioneer.
additional information, please contact Thomas Jass, at (605) 582-2798 or click here.
393.93± Acres • Dallas County, Iowa.
Monday, June 24, at 10:00 AM at the Elks Lodge in
High CSR row crop farm located in
central Iowa along a major highway. Farm is located one mile south and 3/4
mile east on Highway 141. Property is on north side of paved road from
For additional information, please
contact Rod Good, Agent, at (515) 981-0193 or click here.
If you are
considering selling, let this market work for you. This is not a time to sell
real estate quietly to the neighbor or a relative unless you just want to
leave money on the table. To get a handle on what your land might be worth,
or if you are interested in buying land to add to your portfolio, give Derrick Volchoff a call at
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