What is Land Selling for This Month

While many are exclaiming that the country and economy are “returning to normal”, I fall into the camp that is settling into a “new normal”. This thought carries over into the state of the current land market. Strong commodity prices, and land owners seeing the effects of government payments last year, are driving the land market forward. Land prices across Iowa, Minnesota, and Wisconsin continue to be stable and trending upwards. Many counties are experiencing 5 year highs in land prices, up almost 15% from last year. The majority of these sales are resulting from estates and retiring farmers. 
My recommendation for those looking to sell in the current market would be to sell via auction in early fall. The reason being, the “new normal” is being established as we speak by market participants, the market is being set by competitive bidding between expanding operations, investors and first-time market entries. In order to achieve the highest price for your farm in the “new normal”, you must have your farm marketed to each of these groups and have competitive bidding occur on auction day. Selling privately at 2020 prices is not doing your farm justice. Other topics to pay attention to which will have a role as to where the market is headed include; weather affecting commodity supply, potential tax changes which will have a drastic effect on land owners, and the effect of the economy reopening and how it affects commodity prices.
In the last month, High Point has made the expansion to Colorado. Colorado Land Specialist, Kyle Lopez, had his input on the current state of the land market in CO. “It wasn’t that long ago that in Colorado, owning a ranch meant solely on owning it for the agricultural value it produced, meaning that the value it produced was tied to the the crops and/or the the cattle that the range could sustain.” Maintaining the theme with the “New Normal”, Lopez continued, “Today in the current market it doesn’t take long to realize that the agricultural value and what used to be know as the agriculture price tag has now shifted to what we call the recreational value. Ranches are now purchased with the intention of making a profit on the resale of that ranch. More importantly, purchasers of ranches have shifted from truly ‘farming’ to enjoying the recreational and aesthetic attributes of the property.”

The major themes seem to be repeated across all markets whether you are in Iowa, Minnesota, Wisconsin, or Colorado. Inventory is low. When properties do come to market and are marketed correctly, land is selling quickly and at strong prices. With a rapidly changing market, it is important to have a market professional at your side. Whether you are looking to buy and lock in a low interest rate, or take advantage of rising prices to capitalize on your farm’s appreciation, our 20 Land Specialists know how to navigate the market and keep you abreast of changes. Another important note, keep in mind potential tax obligations that may come with purchasing or selling land. Whether your transaction involves an estate, partnership, or 1031 exchange, our Appraisal Team also stands ready to assist. 

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