What is land worth? What is Land Selling for? Is Covid affecting Farmland prices? What are land interest rates? These are all questions we were covered with over the month of June 2020. The quick answer is the market is very stable and slow to respond… it’s land.
The reality to each question is a longer conversation that is a little different for each market we do business in Iowa, Wisconsin and Minnesota as well as the different categories of tillable land, hunting land, buildable land, etc; however we will give you a nice update from above as we had our biggest 2nd quarter ever selling nearly 40 tracts.
What is Land Worth? What is land worth and what is it selling (below) for are a couple different questions. For the most part land with a rate of return in our service area is selling for 1.5-5% annual net ROI. Land has many different values to many different people. A simple example of this is a family that bought a farm this quarter to hunt and fish with their families and build great memories, compared to another who was an out of state investor that did not ever view the farm and commented our videos and photos were so high quality why would he waste the weekend traveling. This is a simple but very real difference in the land market and what land is worth to different types of buyers. This is big reason why our marketing efforts are so diverse on properties to appeal to many different types of buyers to achieve a properties High Point value.
What is land Selling for? Land in our service area is selling at these ranges CREP or wetland $800-$1500/ac, Timber ground $3250-$6000 and Tillable land $4000-$12,000. The ranges are all based on quality, neighborhood, exposure, marketing, water, buildable, access, etc. That is why it is so important to talk to a professional in our organization. To help this nail down a little more, I will use a CPI or CSR2 ratio. Land in Minnesota is in the $75-$85/CPI point and in Iowa $95-$115/CSR2 point. If you would like an exact number, we would be happy to have a conversation with one of our agents directly.
Is Covid affecting Farmland prices? We would respond a big YES. If anything they have affected them positivity. Government money pouring into the hands of buyers, people on unemployment wanting to spend more time outdoors, people wanting to be outside of the city, and people not liking the volatility of that stock market have our buyer lists longer than ever.
What are land interest rates? Interest rates are not only the lowest we have ever seen them but the banks motivation to lend and the rate lock terms and amortization schedules are “unprecedented” From an interest rate perspective for those who require a loan to purchase land there has never been a better time. We are seeing rates in the 3.25-4.25% range on land purchases on a regular basis across many lenders.
We hope this land market finds you well. Keep us in mind is you hear of anyone looking to buyer or sell or needing a land appraisal.
We are here to help.
What is Land Selling for This Month
