For the last several years we have written about the vibrant and upward land market with strong commodity and livestock prices, limited land for sale, and low interest rates. Our concern has been what time would the land market level off or soften? Although the agricultural economy remains a bright spot in the current economy, there are cracks and concerns. Interest rates both for operating and long term loans have almost doubled, commodity prices have softened but livestock prices remain high, operating costs remain high, CD rates of over 5% have taken some of the investors out of the land market, and weather has been a factor in areas of drought, too much moisture, and/or hail, plus the uncertainty of the global affairs. Overall, the land market remains strong but has cooled. You will continue to see strong prices but may also see some lower prices. This will be due to the location of the property and who is around it. Values depend on property location, buyer cash flow, need to expand current operation, land as an investment, available cash or equity, and the availability of land for sale.
Who is selling? The majority of sellers we work with are a result of the 6 – D’s. Death, Debt, Divorce, Dissolution, Dysfunction, and Done. These situations may be emotional, difficult, and unfortunately legacies come to an end. Our niche is navigating through situations where all parties can trust and rely on our experience and expertise to solve your situation, receive the highest value, and make the process as painless as possible. When provided with the opportunity to work with a seller, we analyze and research the property, develop a marketing plan, and provide you with a choice of how to sell your property either by private treaty or by auction. We use two methods of auction – online only timed auction and live auction with simulcast broadcast and internet bidding.
Who is buying? Over 73% of the buyers come from within a 30 – 40-mile radius of the property. This makes sense as surrounding landowners will typically pay more as they want to add to current operation, they have made a commitment to be in the area and know what the property will produce. The remaining 27% are looking to buy land as an investment. Our complete (customized) marketing plan including not only print ads, but property brochures mailed to to surrounding landowners generated from a landowner database of over 31,000, internet marketing via Google ads, social media, buyer database, and a vibrant website generating over 18,000 visits per month.
In summary, the land market remains strong but with more volatility than we have seen in years past. If you are considering selling, now is the time.