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Regional Similarities and Differences in the Land Market
You are here:   Blog  »  Agricultural Real Estate  »  Regional Similarities and Differences in the Land Market

October 14, 2019 

When discussing the land market, it is easy to only think of what is transpiring in one region and automatically extrapolate that into other areas. Depending on the land use mix, crop mix, and make up of buyers and sellers, this may work adequately for some land market trends, but not all regions. 

  

There are several basic factors affecting the land market in a similar manner throughout most regions. For instance, low commodity grain prices and farm incomes are factors negatively influencing land values in regions with crop production. Conversely, low interest rates are supporting land prices in all regions of the country. The lower supply of land for sale in most regions lends support to values. 

  

On the other hand, there are regional differences in land markets that become evident upon further analysis. One important difference is the makeup of land buyers. In the Delta region, Columbia River Basin, and in areas with permanent plantings, there are more institutional and investor buyers of agricultural land. These investors increase the buyer pool and at times will bid up for larger tracts of land. Conversely, farmers and ranchers are the predominant buyers of ag land in the grain belt.    

  

The source of investment capital for the land buyer makes a difference in land values for non-agricultural land in different regions. For instance, prices for cropland, pasture, and recreational land in Texas are much more similar than in the grain belt because there is a larger pool of individuals with the funds to make a real estate investment in land for reasons other than current income.     

  

For those buying or selling land, it is important to understand the differences between regions. As a brokerage firm, Farmers National Company's reach from coast to coast in 29+ states gives it both the local knowledge of a land market and the understanding of regional variances that it takes to provide good advice to land owners. 

  

Land sold by Farmers National Company was up 25% year over year! 

Randy Dickhut  

Senior Vice President - Real Estate Operations 

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